A great way to achieve your financial freedom goals are to dangle some carrots for yourself. What are your carrots for achieving your financial freedom goals?

Save up, pay cash for a cheap car, and pay yourself the car payment. I have no car payments, so I’m already saving up for my next car. If you want to find out more, you can read my article about what cars really cost, and use the car costs calculator to see for yourself.

Let’s further estimate that for every two years of driving an old Fiat UNO, instead of the new BMW, it means you can achieve financial freedom one year earlier (if you think this is a ridiculous estimate, why don’t you calculate the true costs of driving a new BMW).

The estimated yearly ownership costs of the cars used in my example are: 2008 BMW320d 2005 VWPolo TDi 1999 VolvoS40 T4 1999 FiatUNO Mia Depreciation R 66,000 R 18,000 R 6,000 R 2,500 Finance Cost R 45,750 R 11,250 R 5,250 R 0 Opportunity Cost R 3,000 R 3,000 R 3,000 R 3,000 Insurance R 12,000 R 8,400 R 6,000 R 3,600 Miscellaneous R 200 R 200 R 200 R 150 Total YearlyOwnership Cost R 126,950 R 43,850 R 20,450 R 9,250 You should notice from the table above that depreciation is the biggest ownership cost for all the examples, except the very cheapest car.