Money lessons I learned after buying our family’s first mini...err crossover

Toddler with Big Eyes

The last bit of my former, pre-parenthood life will be driving away today. With a second child on the way my husband and I are taking the plunge into minivan territory. Ugh! We’ve both cringed at the thought of a minivan ever since we were able to drive, vowing never to be “those” parents.

Unfortunately, the little sporty hatchback, good enough for one child, won’t fit the bill for two. Hubby’s a bit too tall too with the car seats taking up the bulk of the room in the back. (Incidentally, last week was child passenger safety week in North America so make sure you’ve got yours installed properly.) But I digress. Back to the minivan, err, I mean cross-over, which is what we’ve elected to replace my way-too-expensive, luxury single girl car (which we will still be financing).

And here’s where the financial planning lesson begins. Beware parents or even single gals; if you’re thinking of having a child in the future ,or have one and plan to have another, think through very carefully how much you want to spend on your vehicle. In just three short years you could go from no kids to two children, a loving spouse, plus a dog.

Here are the lessons I learned:

  1. Think through big purchases like a car. First of all, cars depreciate in value, a lot, which means the minute you drive it off the lot it loses value. The car I spent over $37,000 on just three years ago is now only worth $13,000. Consider buying a used vehicle that’s in good shape. You may need to do more homework but the financial payoff could be worth it in the end for you and your soon-to-be larger family. In the end we decided to get a vehicle that had enough space to fit our growing family as opposed to the high end SUV that may have looked terrific but would have created undue financial stress on us in the future.
  2. Every little bit counts. It’s easy to get lured into getting a bunch of fancy features in a new vehicle. But remember that every little bit counts. What you save on resisting that sun roof could pay off later when you’re opening up an RESP like the CST RESP for your child. I’m big on making sure all the lights are off in the house, or having a timer on my thermostat to keep electricity and heating costs down; the same principles should apply when purchasing a vehicle.
  3. Spend only what you have. I got my first credit card when I went to university, back when I could still hear my mom saying “credit card money isn’t money that you have.” She always stressed the importance of paying off your credit card balance each and every month. Admittedly, it was hard for me to do in my 20s when I was a student and even in the days of my first jobs when I was happy to be making $20,000 a year. After all, I was young and wanted to travel the world and go out to the latest and greatest restaurant that just opened up in town with my friends. The lesson finally kicked in when I got married and had a child and realized that my debt was no longer my own. Since then we’ve decided to put the credit cards away and concentrate on paying the money owed, including the debt leftover from the fancy hatchback with all the bells and whistles. I still kick myself for all the spending I did back then and now have a new mantra: if we can’t afford it with the money we have right now, then we don’t get it.
  4. Save! I opened my first personal savings account when I was still in grade school. My school had a drawing contest sponsored by the local credit union; the winner would receive $50 to put into a bank account. I didn’t pull any money out of that account until I was 17! Since then I’ve always put money aside, even if it’s a little bit at a time. You never know when you or your family could hit hard times.
  5. Talk about money with your spouse, out loud and in front of your kids. Money shouldn’t be a taboo subject around the house. You’d be amazed at how much your child will learn from it. My husband and I openly discuss our finances; because of that we rarely argue about money and even our toddler knows to buy things you need (like a bigger car or a new toy) you have to have money in your piggy bank.