This topic is close to my heart. Probably too close I suspect. I say this as I’m embarking on my 4th driving test that has spanned over a glorious *five* years. Yep, you read that all correctly! But do I plan on owning my own wheels anytime soon? Hell no.
The sole reason why I’m putting myself through 5 whole years of pure and utter torture with the weight of passing dragging over me like the heaviest backpack is because driving is one of life’s many skills that I gotta have in my back pocket. For that day when I actually *need* to drive, and by extension need to actually own a car.
Until then, I am not buying myself a tin can on 4 wheels nor am I paying what I’ve probably spent on lessons and tests on one year’s worth of insurance. No siree!
Is your car a have-to? A want? A luxury?
But for so many, they see buying a car as a necessity. Or something that you just gotta do when you can legally drive. I can count on one hand the number of kids in my class who didn’t drive a car in high school.
Sure, many of them were using a family member’s car so not sure if that counts and were bangers (the insurance though?!) but one or two had some swanky wheels. One drove an audi – don’t ask me the make or model – all I can tell you for a 17yo it was cool (and red).
Beyond my classmates, from people at work to people I meet, many are saying no to car ownership. And most of us who don’t have a car are gen zers. We’re a cool ‘n quirky bunch. We do our own thing. (Psst: read here this 1 financial goal we’re making a top priority leaving us $33k better off!)
Flexibility for us is the new fashion
And not wanting to own a car is our way of telling everyone (and ourselves) that we want flexibility over fancy stuff. Owning a car does not give you flexibility. Sure it technically gives you flexibility in the sense that you can go where you want when you want (I’m starting to appreciate how simply wonderful that sounds) but your money can’t go where it wants, when it wants!
So much of your disposable income (aka those precious crumbs left behind after everyone else has grabbed their fair share) goes towards paying off that damn car before it’s able to pay for your future. That’s before we get to petrol, road tax, insurance costs. It all adds up. My friend needs a car for her biz and another needs to drive since she’s a scientist in a lab 2+hrs away!
But most of us don’t need one at all. I work in the city which is only a tube ride (and 20min) walk away. In London, everything really is a bus/tube ride away. Plus, the habit of walking and the health benefits it’ll bring is infinite. But knowing all that cash is going towards something way better (ahem, financial freedom) is the best feeling.
Cars simply cost a bomb and break the bank. Case in point: my friend bought a car for £25k and I almost cried (for her, obvs). She’s paying it back + interest and it makes me think, imagine she’d have gone for a cheaper model and chucked all that EXTRA cash into the stock market. (Read here the dangerous money move to avoid to be richer than you ever thought!)
But – I will add this, personal finance is personal and we all gotta do what works for us. She just got out of a divorce and wanted to feel good. She said her car helps her get that independence back and give her a daily feel-good boost. Gd knows she needed it.
There are 2 sides to everything!
It wouldn’t be fair if I didn’t consider the other POV! There’s always 2 sides to everything and what works for most might not work for you at all. So you do you. If your car makes you feel like a million bucks and give you the mood-booster to go out and make those bucks, GO FOR IT! (Psst: read here how to add bling to your budgeting – it doesn’t have to be boring!)
But for most, we can get no car or a cheaper one. It’s also not rare for people to still be paying off their car loan 70 months later! This comes from spending above your means.
Buying some flashy thing that you know you can’t afford. And ~90% of people who buy cars buy it on loan which basically means they can’t afford it.
And the interest payments are where the auto companies make the big bucks! Right now, auto loans are ~9%. And the sad thing about it is that as soon as you drive out the showroom, your baby’s already lost 15-20% of its value.
Dare to do what no else is doing now
So if you’re daring enough, dare to ditch those flashy (or not) wheels of yours and chuck that cash into the stock market so all those once-wheels can start working for you. Read here why not enough of us are investing & why it’s a much bigger problem than you think.
Spending your money’s the easy bit. It’s keeping it (and growing it) that’s 100X harder. And most times when we spend we aren’t really considering the effects of it. We find it hard to think long-term, let alone for next month.
If you’re able to think about the opportunity cost of your spending moves now, and think 10yrs ahead (if not more!) then you’ll be able to have the life you want, and deserve.
But spending tons of money on a thing to get you from A to B seems like a massive waste of money.
So dare to do things differently. Have a bit of discomfort now to get to enjoy something infinitely better down the line.
Remember, it’s so much easier to cut back now and keep a tight(ish) lid on your spending than in 10 or even 20yrs.
Do what you can now to set yourself for success. And ditching your fancy car might just be the place to start!
Disclaimer: This blog is not investment or financial advice. It is my opinion only. This blog is not a personal recommendation to buy/sell any security, or to adopt any such investment strategy. Always do your own research before you commit to any investment