You would have thought that I learned my lesson after the first car I ever bought was the worst financial decision of my life.

I don’t think I’m a dumb person. I just think I was a dumb person about three years ago.

When I graduated from college and started my job, I was making some serious cashola. I wasn’t “rich”, but I was definitely rich compared to what I was making in college.

I thought I needed a new car when I started my corporate job because I thought it would be embarrassing for adult coworkers to know I still drove a crappy old Nissan Sentra. To me, the car screamed “broke college kid” and that wasn’t the impression I wanted to give.

I didn’t have a budget at the time, so I played with the idea of a big car payment in my head. “I pay about $475 for rent, another few hundred for student loans… Yep, plenty left over for a big car payment!” thought the stupid little man.

350Z

I was hypnotized by the awesomeness. Stupid car.

I looked at a few cars and decided I wanted a Nissan 350Z or an Infiniti G35. I test drove a used 2004 350Z convertible and I was sold. Price tag: $20,000. I got a little credit for trading in my Sentra and ended up with a five year loan and monthly payments of $377 a month. I decided to pay $500 a month and pay that sucker off early! This plan was foolproof.

I was so happy to drive off the lot with that car. I threw the top down and flew down the highway at about 90 mph.

This. Car. Was. AWESOME!

But then it wasn’t. My insurance went up. I was getting 10 mpg less than I got with my Sentra. The trunk was so small I couldn’t even fit my golf clubs in the back. “Oh well,” I thought. “I’m still driving a sweet sports car.”

Then it got worse. The speakers in the radio starting cutting in and out. Some jerk keyed my car while it was parked at my apartment complex. The window started acting funny and wouldn’t go all the way up. My low-profile (aka expensive) tires wore down and had to be replaced. The convertible top had never been replaced and holes started randomly appearing.

And here’s the worst part: nobody at the office gave a rat’s patootie what kind of car I drove. 95% of them didn’t know what I drove, and the other 5% didn’t care.

By the beginning of 2010, this car was causing me as much trouble as that stupid 1962 Chevy Impala. And this one was costing me $500 a month! I wanted to get a new car but with all those problems there was no way I could sell the car for what I owed on the loan. Then something tragic (for some people) but awesome (for me) happened.

Accelerators were getting stuck in Toyota’s and nobody trusted them anymore. Toyota had to slash prices to keep selling cars amidst all these reports. I knew if I played my cards right that I could use this situation to my advantage. One of the local dealers was so desperate to sell a car that he gave me a pretty good trade-in value on my 350Z even with all the problems, and after some haggling I leased a brand new 2010 Toyota Camry for $232 a month (including GAP insurance).

My Camry has a bumper-to-bumper warranty for all three years of my lease. It gets about 30 mpg. Nothing is broken! I’m not excited about this car, but I’m happy.

I learned two seriously important financial lessons from this ordeal.

First, I will always maintain a budget. If I had a budget when I started my job, I would have never decided to buy that car. It was undoubtedly the second worst financial decision of my life. I have religiously followed a budget for over two years and my budget allows me to be in control of my money and tells me when I can or can’t afford something. Plus it helps me pick up chicks.

Second, I will never make payments on a car without a bumper-to-bumper warranty again. I don’t mind making payments on a car as long as I’m sure I won’t have to pay for anything repairs. I also don’t mind paying for repairs on a car if I don’t have to make monthly payments. I CAN’T DO BOTH AT THE SAME TIME!

Please feel free to make fun of me for re-living my worst financial mistake a second time in the comments below.

350Z photo credit: Martinliao

*Note: All stories this week are about why I’m not qualified to give you professional financial advice while I am qualified to make you laugh while I give my financial perspective that’s generally pretty good.