The "But Everyone Has A" Mentality

A few days ago a stranger stopped me outside The Home Depot and asked how old my van was.  Apparently, it reminded him of a work van his father drove. “1990,” I replied. “Wow, 19 years?” he said with a surprised look on his face. “Does it still run good?” I could see him checking out my homemade Rustoleum paint job on the top, and the faded paint on all sides.  I said, “She runs good, minus a few flaws here and there.  I don’t drive it for the sex appeal though; I drive it because the payment is right!”

Now he looked insulted. “Yeah, but everyone has a car payment, man.” We parted ways with him glancing back at my old van with an eye of jealousy, which I found amusing since he was driving a fully loaded, late model Toyota Tundra pickup.  What could he possibly be jealous of?  Maybe the fact that I was paying $500 less per month to get from point A to point B?  I could understand that.

“But Everyone Has A…”

Think about how many times we hear that statement used in the world of personal finance.  Everyone has a credit card.  Everyone has debt.  Everyone has a mortgage.  Everyone has student loans.  And from my personal example, everyone has a car payment.

I used to believe these statements, too, but one day I realized that it was possible to live a frugal lifestyle contrary to these long-held assumptions.  No, everyone does not have a car payment.  Some managed to pay off their car debts and continue driving debt free for many years. Others chose to pay cash for more inexpensive cars rather than borrowing money to finance the operation.

Believe it or not there are some people out there who have paid cash for a house, and almost more shocking these days, graduated college without debt.  It can be done, and it is being done.  The problem is that those whose livelihood depends on your buying into the idea borrowing money is the only way are out to perpetuate the myth.  And in a way, that even extends to the upper-most reaches of government.

Throughout this economic downturn we (consumers) have been reminded at every turn that borrowing is what fuels this economy. It is sad, in a way, but true. We’ve seen what happens in industries like automobiles and houses when people stop borrowing money to buy things, but I can’t help but wonder if this would merely be a short-term pain, assuming we were really in it for the long-term gain.  Unfortunately, I don’t really believe we are.

Soon enough credit will be flowing again, and I guess if that leads to the return of job growth, that’s a good thing.  However, in our own personal economies let’s make a fundamental shift in the way we acquire things.  Let’s get back to basics. If we don’t have the money for something, we save for it. If we must resort to financing, let’s buy cheaper so we can put that debt on shorter terms, and agree to a lower monthly obligation.  Ultimately, we’ll all still be in the market for that new car, or that cruise, but not until we have the cash. After all, everyone has a dream of being financially independent.  At least I do.


  1. Economics is a dismal science because anything you do has an economic effect. Unfortunately, even economists forget this sometimes. If most people stopped buying new cars, the price of used cars, car parts, and car repairs would go up…if MOST people did, which is highly unlikely…

  2. Frugal Dad I’m quite pleased with our decision. I have just completed a 4 year lease on mu Ford Falcon Wagon (Australia) 2002 model and intend to sell it before I have lost all ists value, hoping to get about $8.500. I am replacing it with a 1991 Corolla Seca Ultima which cost me $3500. The insurance is only a fraction of the cost (3rd party only) and my fuel saving is about $1200 a year compared to my 4 litre Ford. I did but a bran new Mazda 2 last year fior the kids (which we own) last year, which we did for all the safety features are on new vehicles, I have two children who have just got their licences. Yes I will by a newer vehicle in a couple of years, but with cash. I’ve finally reached the stage were I don’t feel I have to drive a new vehicle for the sake of it being new – although I do enjoy new vehicles, but is it always worth the opportunity cost.

  3. “But everyone invests passively!”

    I don’t mean to be a nag. But I love the story told at the top of this blog entry. That’s the real thing. People are both critical and jealous of those who save effectively. It’s a very emotionally mixed-up thing.

    It was by coming to see how mixed-up we are in our thinking on money management that I came to cast a skeptical eye on the conventional wisdom re investing. I found that the same general principle applied there. People are both critical and jealous of those who look at stock prices before deciding on their stock allocations too.

    The great truths often apply in many area of life endeavor. The reason why people are both critical and jealous of both effective savers and effective investors is that they want to be effective savers and investors themselves. The job is to help them over that emotional hurdle of accepting that they have been doing some things wrong. There are times when taking on a car payment makes sense. But taking on a car payment just because lots of other people have taken on a car payment is dumb.


  4. Strange to realise that this conspicuous consumption is (relatively) new. It isn’t that long ago when the idea of living the ‘high life’ on credit would have been considered shameful.

    In the UK the peat time for buying a new car is February when the new registration mark (it tells you how old a car is) comes out. This year the sales of new cars was 59% down.

    I can’t get my head around the idea of keeping the economy going or kick starting it with debt. Over indebtedness is why we are in deep doo doo.

  5. Yeah, I think it’s sad when people just accept debt as the status quo. I am working my way out of it, and after some conversations with my father, I understand why I got in debt. It’s partially because my parents did not teach me good money habits, mostly because they don’t have any. Sigh. I am working hard to make sure my ds does not have debt. I will also make sure he has no college debt (without my shelling out the dough). I failed to graduate, but neither did I take any loans to go to college and did so for 3 years. I want to go back but have not had the funds for many years, and when I WAS eligible for the GI bill I, as a single mom, had to work to support us and could not deal with the extra workload on top of that.

    I currently have a car with no payment and I am working on having a business truck with no payment, but that will take the rest of the summer. Then I will work on taking some college classes without going further into debt. I have been working my way out of debt for about 3 years and have probably 3 more to go. Slow, but steady. Thanks for your posts, they are always good and informative.

  6. So what fueled the economy before consumer debt was an option??

    I occassionally fall into the “everyone else it” attitude, but it’s blogs like this one that help me stay focused or get back on track. I have noticed more of my spending habits now that I am conscience of my money. I notice I want to spend more when I’m stressed (ie: That new top will make me feel better). I’m learning to supress those feelings of want.

    While I would LOVE a pretty new TV, we just bought the one we have 3 years ago and it works just fine. Plus I don’t have the cash to buy one.

    As for cars, we have had a car payment for the last 9 years.
    When we met my husband had financed a used car that was costing more per month than a brand new one would cost, plus it was starting to need repair so we traded it in for an economical Sunfire. We loved that car but as our family grew (baby & 2 dogs) we wanted more space so we traded that one in for a Vibe. We really like the Vibe and intend to drive it to the ground. No more car payments for us. It just takes up too much disposable income. Less than 2 years left to pay.
    In the meantime, we are saving each pay towards buying out my FIL’s car lease. He has 3.5 more years on the lease so we should be able to pay cash for it. I’m really looking forward to putting those car payments to better use, like building our savings/emergency fund and finishing the work on our cottage.

    As for the cottage, we paid cash for the land and my DH & FIL have been building the structure themselves. It is a real sense of pride to have this get-away that we built ourselves and it’s not a financial burden – it’s a joy instead!

    While it’s lovely to have the instant gratification that credit can offer, it feels SO much better when you earned it and paid cash for it.

  7. I am an extremely pessimistic person by nature. This is not good in a lot of ways, but I think it is an advantage for personal finance decisions. I avoid debt like the plague. We live in a house that most would probably consider far below are means, but it is paid for. I just realized that my good pf decisions are not because of discipline, but because I always assume the worst will happen. I’ll probably lose my job. We will probably go into another Depression. Again, not necessarily a good way to live, but it does make for good financial decisions.

  8. I am in the car market to buy a used car with cash… It is amazing that all the sales people only want to talk about financing and “monthly” car payments. When I say cash only, there is a 2 second pause before it really hits them… This will be my first time buying with cash up front! I am excited and looking forward to reducing my “burn rate!”

  9. One of my oldest – and previously regarded as money-savvy – friends recently dished out that “Everyone has a car payment” nugget and I was floored.

    No, that’s simply not true. My first new vehicle was a ’90 Nissan pickup. I drove it for just under 14 years. I traded up to a Honda Element, which has served us very well for 6 and I have no intention to replace it anytime soon. Oh yeah, I did monthly installments on that old Nissan, but I paid it off a year early and have never made payments on a car since.

    In the nearly 13 years we’ve been married, my wife & I have bought 3 new cars and we’ve paid cash for each of them. Dede’s VW is 5 years old and we’re beginning to consider trading it off only because a 2-door car just isn’t very suitable now that we’re a family of 3. And as much as we love the New Beetle, the back seat is a bit too small even for a child (the car seat is the part that really chews up the space). But when we do make the move to trade in Dede’s VW, whatever we do buy will be bought outright – no payments!

  10. I used to be a part of the “But Everyone Has A” crowd but thankfully, I recognized I was hanging out with the wrong crowd!

    I paid off my car in May 2008 and it was the first time in over 12 years I did not have a car payment. I can’t even describe how good it feels. I now have the option of sending that payment to my savings account instead of the bank.

    My new motto is NO MORE CAR PAYMENTS!!!

  11. @Mr. ToughMoneyLove: No, but I have one of those Dave Ramsey window decals on the back that reads, “Debt is normal. Be weird.” I figured that spoke for itself!

    @Kris: Would love to hear more about your car bought with cash when you complete the transaction. Way to be frugal!

  12. I sincerely hope that if there is good to come out of our current financial issues that would be that more of us learn and impliment the desire to save and a frugal lifestyle.

  13. I have no doubt at consumer debt helps fuel the economy, but it is really business debt that is referred to when commentators say “credit crisis” or “debt-based economy.”

    It’s not unusual for companies to depend on a float from the bank to purchase inventory or a line of credit to make payroll as a big sale is closing. In many cases, these aren’t long-term loans, but liquidity issues for which a few days (or even hours) makes all the difference.

    Now banks are getting much tighter with their lending requirements. For business that have successfully operated this way for years, changing oars midstream is pretty much impossible — especially if they have long-term debt on their books.

    When the liquidity stream dries up, many businesses can’t function. A number of local shops and regional chains around here have gone out of business because of this.

    This of course means X more people are now not earning income, and thus making fewer purchases, which results in less money being pumped into the economy.

  14. So how do we spread the word that Not everyone has…. ? debt, mortgage, carpayment, student loans ?

    I have none of those. Paid cash for the house, a fixer upper, and have been painting and sheetrocking (cash as I go) ever since. This morning I am painting the mudroom – waiting for the paint to dry as I type for the 2nd coat) and then I am putting up two discount cabinets.

    I paid cash for the 2004 truck I just bought and am selling my 1974 truck now – yep 35 years old 🙂 It’s just rusting apart at this point, (Oregon coast) but runs great! The dealer ran my credit and said I could buy anything on the lot, so obviously financing was not a problem 🙂
    My Forester is also paid for and is 9 years old and I intend to have it at least 20 years, if all goes well.

    While I believe there is a time for a mortgage, it should be early in life. Older folks should have things paid down enough that the house is paid for or the next house can be cash or close to it.

  15. Hello! In the past 13 years, I have only had 1 car payment (my husband had to have a new car-the car was for him not me.) Anyway I have never paid more than $1,000 for a used car and some lasted almost 2 years. The cars for the most part have been reliable and did not look horrible (actually I had a Ford Explorer that looked amazing even though it was 13 years old.) I have spent about $5,000 on cars in the past 13 years.
    In addition I have only spent about $5,000 on repairs (not including gas and basic maintance like oil changes.)
    So in 13 years my total for cars was $10,000. That is less than $80 a month. Not too bad.
    I have two kids and work outside the home part time (I need a car to drive to work.) So it is doable.
    Thanks for all your tips and stories. -Becky

  16. I forget to mention in the past 13 years I have been without a car. Once for almost a year, and once for about 5 months, and once for another 5 months. And I have had three cars just given to me by people who were upgrading and did not want that car anymore. God is so amazing!!!

  17. “We live in a house that most would probably consider far below are means, but it is paid for. ”

    I think that is the kicker. Cars and houses are the two most expensive things in life that people buy – and so they want to buy the most they can get.

    Me, I’ll buy for far less than we can get. Yes, we’re getting a mortgage for our new house, but: my mom is paying 1/2 of the cost down with the sale of her house, and moving in with us. We’re eligible, apparently, for up to a $450,000 house, which I think is insane. We’re borrowing about $120,000, which we can pay off in 15 years, without much trouble. No, it’s not huge, but it’s $67/sqft, which is cheap, and it’s finished, and it’s perfectly adequate. I’m soooo looking forward to it. My husband is dear to me, but Norm Abrams he is not. 😉 OTOH, he makes a ridiculous amount of money, so I’m banking it and buying a cheap finished house.

  18. Good story. And I think there will be a fundamental change to the way that people consume (ie acquire things). Also in how they value things. Like you said – it’s about getting from point a to b.

  19. I think it’s this very mentality that put me into student loan debt. “Everyone else has one – might as well get one, too.” It was dumb because there were other things I could have done to pay for school and living expenses during the time I was in my grad program. But since everyone else was doing it, it didn’t seem like a big deal.

  20. It’s been 26 years since we took out a car loan. We got a brochure for the new version of our car. It gets 3 MPG less than the old one. We’ll pass until they notice the energy crisis. The mortgage was paid it off early. Credit cards are paid in full each month. The 19 year old TV is fine.

    I’ve found that when I buy a new thing, I spend a lot of time researching and soon after buying, my interest in that type of thing remains strong and I am more inclined to upgrade. However, the longer I resist, the interest fades and I realize that a newer/better sample of that thing isn’t going to change my life. So I probably find it easier to resist replacing my 19 year old TV than the person with the 3 year old TV does.

    By the way only a tenth of investment dollars go into passive funds and the average holding period for mutual funds is only about two and a half years, so whoever said “But everyone invests passively!” is way out there.

  21. I remember the first time I heard my dad explain how he bought cars– the money you would spend on a car payment goes in the bank. Earning interest. Then when the current car dies, you have the money to go buy a new one.

    At 12 years old, I was floored. I lived with my mom–who always had a car payment, then leases (!) for years and years. I heard that saying “You always have a car payment” more times than I could count.

    My husband and I have done it both ways, and it only took two car loans to push us into my dad’s method.

    And guess what? Our cars are 11, 13, and 15 years old. My son is replacing his car in a couple of months– with saved up cash.

  22. I drive a 1998 Jeep Cherokee and I love not having a car payment. Knowing the vehicle is mine outright is sweet.
    Somtimes Betsy (my jeep) and I are rolling down the highway and we see my “dream” car; a Ford Thunderbird! We glance at the dream car and then I tell Betsy how PRETTY she is and how GREAT she is and how much I appreciate her.
    I think she reciprocates….

  23. Oh, boy . . . I live in another world entirely from ALL you guys! Haven’t had a car to drive in pretty close to 40 years. But then, I haven’t had to have a job to GO to in all that time, either. Believe it or not, getting rid of the one was my ticket to getting rid of the other.

    It all began when I figured out that two and a half months of my wage-earning life was devoted to supporting an automobile. I wrote about it in issue #3 of the Mother Earth News, though I could only see (at the time) as far as working for half the year and taking off the other half to do as I pleased. But such a discovery has wings, believe me!

    Today, I live on a somewhat limiting Social Security income of about 8K per year . . . but I’ve learned to do quite well with it and get along just fine. My life has been fully my own since I was 44. Wake up, folks, and learn how to LIVE!

  24. One of my previous jobs involved test-driving brand-new cars and reviewing them in our local paper. If anything, I learned that I’m not impressed by an $80K Audi, and am far happier with owning a model that’s “below my means.” My car is a generic 4-door sedan and the fanciest amenities in it are power windows/locks and a 1-CD player. It’s paid off (at 0% financing) and I plan to keep it as long as possible!

  25. Excellent post. We are working our way to being out of debt and I personally have no idea why anyone would want to keep up with the Jonses. I just want to live a cash life, buy what we need, and save for retirement and tuition. I honestly don’t care ‘what everyone else has.’

  26. I bought my first new car in 2005, straight off the lot, and financed for six years, eep. I fell into the I’m-suddenly-making-good-money-so-I-can-spend-more trap.

    The car has been paid off for a while, and I don’t really regret it now, but I’ve made a deal with myself that I won’t get a new car until I can afford to pay cash for it. It’s a lot harder to part with cash than to finance something, so I imagine I’ll be driving this one long after I can afford a new one. 😉

  27. Essentially, the mentality of ohh everyone has it is the basis of our economy.
    I look at it as a herd of sheep, and that is how people are. They follow what others do and don’t question, don’t step out of the herd because they are scared of what will happen next and what others will think of them.

  28. Actually I seen my parents pull this on me too, I told them to stop spending money on home improvements, money they don’t have and they reacted to me by saying who pounded this mentality into your head.

    And I am thinking to myself, wow people are delusional and are doing it just to look good or just to fill a void in their life.

  29. My husband and I both graduated from college without any debt. We both worked hard during school to manage it (we didn’t know each other then), and we only know a couple other people who ever managed to do the same. We have always paid cash for cars up front. Currently we own 2 1996 Hondas that run great, even though they are getting a little shabby looking. We have never had credit card debt. Our credit cards “pay us” in dividends to use them (about $200 free dollars a year for us) The only debt either of us has ever incurred is our mortgage, which we are working on paying down as soon as possible (at about 40% paid so far). We are going to have our first child by the end of this year, and I’m one of the only one of my girlfriends I know who can choose to stay home to raise my child and live on one income, because we don’t have debt looming over us and I know how to live frugally. Most friends that are close to us at one point or another have asked us “how we do it”. They are amazed that we have the cash to go out and buy a new car right now if we wanted to, but still drive the old used ones. (But they don’t get that part of the reason we could save that much money was because we weren’t wasting it on a car payment in the first place.) I have heard a lot of people talk about refinancing their mortgages lately to get their monthly payments down and then in the next breath talk about turning around and spending that “saved” money on the monthly payment for a new car. Hello?! When will people ever learn that they don’t HAVE to be in debt all their lives?

  30. Great topic that’s relevant in my life. I just blogged recently about paying off my wife’s car. It is such a freeing feeling. My car, a 2000 Nissan Maxima, is nearing 185k miles on it, but now I’m priding myself on how long it will keep running, rather than how nice of a car I could finance to replace it. We hope to never have a car payment again.

    Now instead of trading up because “everyone has a car payment”, we can add that $311.65/month to our snowball. It’s picking up a lot of steam – it’s gonna need it to knock out the mountain range of student loans ahead, but we’re excited to see the plan working!

  31. A friend of mine was shocked when she found out that we do not have car payments. She ask me what do I do with all my money then since I do not buy toys the way she does. I used the student loans excuse. Our student loans are not a burden to us. As a matter of fact, the only reason why we kept it as long as we did was because of the tax deduction. Since we will no longer get the deduction starting this year, we will probably try to pay it off asap. But I just find it interesting that I feel the need to justify not having excess debt to one of my friends. I am just not as interested in “living it up” as I am of having financial security.

  32. Aha! It looks to me like all of you . . . ALL of you, are just happy where you’re stuck: with the world of lifelong wage-slavery in order to keep up on WHATEVER it is you are ‘keeping up’ on!

    I draw that from your inability or unwillingness to respond to the single response in this long list of them that advocates doing without the automobile entirely!

    Well, to each his own, I guess. Freedom doesn’t need company, but indebtedness sure does.

  33. For those of us living in very rural america, going without a vehicle is not a real option, as there is no public transportation here, keeping a horse is more trouble and money than I care to spend, and my elderly knees cannot handle a bike, nor would I want to in the 200 days a year that we have rain here, along with all the coastal winds.
    Freedom is having my paid for old rig available to me at all times.

  34. I fear I’ve heard the “but everyone” phrase come out of my own mouth a few times.

    “But everyone has a side job.”
    “But doesn’t everyone do their own ironing?”
    “But everyone likes fresh garden vegetables.”
    “Doesn’t everyone know how that if you put a rubber spatula on a hot frying pan, it’ll melt?”
    “Can’t everyone at least sew up a seam or put a button back on?”
    “Doesn’t everyone know how to change the oil in their cars?”

    It turns out that what I think is obvious often isn’t. I think the odds are that I’m clueless about a bunch of things that are really obvious to other people.

    In my particular case I think the “but everyone” argument comes from a desire to validate my point of view by projecting it in a larger social context. Either that or I’d like to believe I’m normal.

  35. I have already made one comment and have enjoyed reading the various perspectives. Frugal Dad’s perspective is correct, if you only go into debt to buy a new car so that you look the part bad move. But if your circumstances require a newer vehicle because of a large amount of travel, safety of children, need of reliability, then all those points have to be taken into account, not just how much you are spending. Due to our changing needs I have down graded to a vehicle 3 times older than my last vehicle. Eventually I’ll buy another new vehicle, but with cash.

  36. I drive a 1991 Honda Accord, 5 speed, with 240,000 miles on it.Paid cash for it, used. Still gets 35 mpg in town, runs great and is rarely seen by my mechanic, and then mostly for oil changes and scheduled maintenance. Recently the young man selling me new wiper blades at the local auto parts store asked me if I wanted to sell it. I thought he was joking, told him how many miles were on it, and he said he was thinking of replacing his wife’s 1984 Accord–still running with 350,000 miles on it! I honestly dread the day we will have to replace this car, but am pretty sure it will be a cash purchase, used Honda.

  37. Great post. While I agree that upkeep on an older car isn’t as nice as a new car that’s under warranty, if you do regular maintenance and fix minor problems before they become major most recent cars can last up to 200k miles.

    3 years ago I bought a ’92 Volvo 240. I sank some cash into it when I could to bring it up to speed on maintenance and now I’ve got a nice, reliable brick approaching 150k.

    I find it best to not treat it like a beater. Regular waxing, vacuuming, painting in scratches keeps it from looking like a rusted heap. It’s fun having an older vehicle that doesn’t look as old as it is.

    NY Times had a ridiculous article on a woman who was saving money by keeping her car after the warranty expired. Poor woman had to make do with a 2004 BMW X3. The horror!