I'm a Financial Planner; Why I Still Drive a 17-Year-Old Car

My wife and I have always had a need for two cars. However, we’ve always made it a point to never have two car payments at the same time. When our last lease was up we decided to downgrade and get a smaller SUV than we had before, so we ended up lowering our car payment by $200 per month. One of our cars is a 2001 Lexus GS 300. We’ve had it for 5 years now and counting. Aside from regular maintenance, it’s never given us any major problems.

A part of me would love to have a newer car with all the bells and whistles, but the college kid in me who studied economics still remembers the concept of “opportunity cost” and cannot justify getting rid of it. With only 143,000 miles and no major mechanical issues (yes it does have a few dings and scratches, lol), it’s hard to convince myself that I need to upgrade.

If we had two car payments we can easily spend upwards of $1,000 per month between the note and the insurance. Instead, I can use the extra money for other things like increasing our savings/investments, funding part of our vacation fund, or putting some of it back in my business. I’d be giving up a lot to drive a nicer car.

We still have one brand new car and we only drive one car at a time on the weekends and when we take long trips. Therefore, having a second newer car does not make much financial sense.

I’m not saying that you should never treat yourself but consider what you’re giving up for that “treat”. How much is it really costing you?

Are you contributing to your 401K to take advantage of the full employer match? Are you contributing or maxing out your Roth IRA if you qualify?

In today’s world it is easy to get distracted by instant gratification. Social media posts are full of people staying at great resorts, eating at fancy restaurants, and driving nice cars. What you don’t see is the debt that some of these people are in and the things that they forgo to show their peers that they’re living a great life.

If having a nice car is one of your goals, you can certainly plan for that, just make sure that you’re not hurting your future by doing so. Compete only with yourself. Are you better off today than you were yesterday? Do you have a plan with action steps to be better off tomorrow than you are today?

If you’re doing your very best today, happiness should be the journey and not the destination. Learn how to celebrate small victories like paying off your lowest balance credit card or increasing your 401K contributions when you get a raise.

Have a Question?

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About Luis

Luis Rosa CFP® EA is the founder of Build a Better Financial Future, LLC. He has been in the financial services industry since he graduated college in 2001. Luis focuses on working with young up and coming professionals who are looking to better position themselves for a successful financial future. In addition to obtaining his securities registrations Series 6, 7, 63, and 66, Luis is also a CERTIFIED FINANCIAL PLANNER™ professional and is enrolled to practice before the IRS. This diverse industry knowledge allows him to best serve his clients by understanding how one financial decision affects the other, allowing him to better guide them toward achieving their goals. To meet and see how Luis may be able to help, contact Luis directly at Luis@buildabetterfinancialfuture.com.

Investment Advisor Representative of Retirement Wealth Advisors Inc. (RWA), 89 Ionia NW, Suite 600, Grand Rapids, MI 49503 (800) 903-2562. Investment Advisory Services are offered through RWA. Build a Better Financial Future and RWA are not affiliated.