Relationship with money
Discussion
I’m 35, I enjoy my cars and I've owned many over my time so far. The difficulty I have is using money to buy a car or the thought of having car debt and it's preventing me from enjoying or buying another car.
I grew up with parents who argued about money, a lot. We never had much and it was always a sore point in the household. My parents are still terrible with money to this day, they were always in debt and had payments for everything. in my early teens, I learned this was ok too, and so had car finance, credits cards, bank loans etc and not enough salary to cover it all. About 5 years ago, I decided this wasn't a life I wanted and got out of debt other than my mortgage (and still am). Now I have a good paying job (my wife too), never worry about money and have a lot of savings in the bank (around £65k between my wife and I) which is about the same as my outstanding mortgage, so we're now in good shape.
But I had my name down on a car (GR86 and have the option to buy one) but I really dont want to buy cash as the savings are a safety net for me, I like the feeling having that money gives me. I also don't like the idea of debt as it reminds me of my parents etc but we're in good shape and can comfortably afford the payments. Even if the worst was to happen (job loss etc) I could sell the car and make a little loss. But I still can't bring myself to let any money go, even though i really enjoy my cars.
Maybe I am growing out of the sports car thrill as I get older? lol I mean, it would be a car I would plan to keep for as long as possible but the reality is, I would drive it weekends only, so i dont NEED the car, but it enriches my life a little (but countered by the thought of having car debt).
Such a first world problem ... but it does get to me and a little stuck, any advice for me to consider or even thoughts that I can mull over?
thanks,
I grew up with parents who argued about money, a lot. We never had much and it was always a sore point in the household. My parents are still terrible with money to this day, they were always in debt and had payments for everything. in my early teens, I learned this was ok too, and so had car finance, credits cards, bank loans etc and not enough salary to cover it all. About 5 years ago, I decided this wasn't a life I wanted and got out of debt other than my mortgage (and still am). Now I have a good paying job (my wife too), never worry about money and have a lot of savings in the bank (around £65k between my wife and I) which is about the same as my outstanding mortgage, so we're now in good shape.
But I had my name down on a car (GR86 and have the option to buy one) but I really dont want to buy cash as the savings are a safety net for me, I like the feeling having that money gives me. I also don't like the idea of debt as it reminds me of my parents etc but we're in good shape and can comfortably afford the payments. Even if the worst was to happen (job loss etc) I could sell the car and make a little loss. But I still can't bring myself to let any money go, even though i really enjoy my cars.
Maybe I am growing out of the sports car thrill as I get older? lol I mean, it would be a car I would plan to keep for as long as possible but the reality is, I would drive it weekends only, so i dont NEED the car, but it enriches my life a little (but countered by the thought of having car debt).
Such a first world problem ... but it does get to me and a little stuck, any advice for me to consider or even thoughts that I can mull over?
thanks,
Edited by JB33 on Saturday 29th July 15:30
I've found as I've either aged or just changed over time my priorities have changed and the "stuff" I feel happy spending money on has changed too.
Cars is one of them where I look back and feel slightly sick at how much I've spent over the years.
It's probably a slightly odd thing to say given this is a site for car enthusiasts but it's that difference between appreciating and liking something v cold hard reality that not spending X on something equates to being able to stop working Y months or years earlier.
Cars is one of them where I look back and feel slightly sick at how much I've spent over the years.
It's probably a slightly odd thing to say given this is a site for car enthusiasts but it's that difference between appreciating and liking something v cold hard reality that not spending X on something equates to being able to stop working Y months or years earlier.
shtu said:
There's nothing wrong with well-planned, well-financed, affordable debt.
This.You have the money in the bank, but would be choosing to finance it to retain your cash safety net.
You’ll pay for this privilege in the form of interest, but if that’s a sensible rate then it gives you a peace of mind.
Some people can’t stand debt - Can’t handle owing money.
There’ll be someone along in a minute to say that if you don’t buy it from cash in the bank then you can’t afford it, or that you shouldn’t finance a depreciating asset.
Do what makes you feel comfortable.
This is how I look at what your about to do.
Your going to borrow say 30k. You have 30k plus in the bank and don't want to tie it up in a car. The car can be sold later. Or kept.
If you sell it after a year the car will be worth say 23k. You will have paid out payments on it and will be probably slightly upside down meaning a small amount of cash would need to be put in to sell it, but the longer you keep it the more it should balance in your favour. You can afford this as you have the savings.
You will pay out some interest, but your paying for a service which is to keep your savings intact.
Alternatively dump the savings in, set up a DD for the finance amount in to your savings and pay it back that way, this is the cheapest way to do it as there is no interest and in theory should you sell the car after a year or 2 your pot will be bigger this way than it would have been from the finance route.
In your case finance isn't the big bad wolf in the room, it's depreciation which is a given on a new car. Although that specific new car you could probably flip for a profit after sale as long as you don't leave it too long.
Your going to borrow say 30k. You have 30k plus in the bank and don't want to tie it up in a car. The car can be sold later. Or kept.
If you sell it after a year the car will be worth say 23k. You will have paid out payments on it and will be probably slightly upside down meaning a small amount of cash would need to be put in to sell it, but the longer you keep it the more it should balance in your favour. You can afford this as you have the savings.
You will pay out some interest, but your paying for a service which is to keep your savings intact.
Alternatively dump the savings in, set up a DD for the finance amount in to your savings and pay it back that way, this is the cheapest way to do it as there is no interest and in theory should you sell the car after a year or 2 your pot will be bigger this way than it would have been from the finance route.
In your case finance isn't the big bad wolf in the room, it's depreciation which is a given on a new car. Although that specific new car you could probably flip for a profit after sale as long as you don't leave it too long.
OP, I grew up in similar circumstances to you so completely get where you're coming from; thanks to an utterly useless father our family were constantly struggling for money and cycling debt. Unfortunately we were never taught financial prudence/competence and as a result I just thought that was the way things were and made enormous financial f
k-ups in my late teens and 20s as soon as lenders started throwing money at me. It took me quite a while to work myself out of that hole but I did it and now own my home (mortgaged, roughly 50/50 LTV at the moment) and have a chunk of savings behind me for a rainy day.
I think that if you've ever been in serious debt and struggled financially you have a different approach to money and spending once you've recovered.
That said, I recently did what you mentioned; after enjoying a ridiculously cheap 8-series lease deal for a couple of years, I decided when the 8 went back in October that I didn't want to commit to any long-term monthly financial outgoings as the economy went a little wonky (thanks, Truss!); I pulled £20k out of savings and into an approved used 17-plate BMW 530i - it had the peace of mind of being under warranty etc so relatively safe as a purchase. Fast-forward to June and with that £20k and more back in the savings pot, the BMW wasn't really that interesting and I was bored so I decided to chop it in and picked up an 18-plate Audi S5 coupé a couple of weeks ago for £32k (again, purchased outright). It's also an AUC car (this one with 2yr warranty so again, a fairly 'safe' purchase).
If the worst happens and I need to fall back on savings I still have the option of selling the car and pulling most of the money back out of it. I think I've found a balance I'm happy with in terms of having sufficient in the savings pot; my goal is to always have enough money to see me through at least a year without any income if necessary but also enjoying the things I like while I can - I don't want to sacrifice too much of the 'now' for a possible 'future' when I may be too old, ill or dead to enjoy.
Ultimately if there's a little 'thing' at the back of your brain making you doubt it then don't do it but only you know where that balancing point is for you.
k-ups in my late teens and 20s as soon as lenders started throwing money at me. It took me quite a while to work myself out of that hole but I did it and now own my home (mortgaged, roughly 50/50 LTV at the moment) and have a chunk of savings behind me for a rainy day.I think that if you've ever been in serious debt and struggled financially you have a different approach to money and spending once you've recovered.
That said, I recently did what you mentioned; after enjoying a ridiculously cheap 8-series lease deal for a couple of years, I decided when the 8 went back in October that I didn't want to commit to any long-term monthly financial outgoings as the economy went a little wonky (thanks, Truss!); I pulled £20k out of savings and into an approved used 17-plate BMW 530i - it had the peace of mind of being under warranty etc so relatively safe as a purchase. Fast-forward to June and with that £20k and more back in the savings pot, the BMW wasn't really that interesting and I was bored so I decided to chop it in and picked up an 18-plate Audi S5 coupé a couple of weeks ago for £32k (again, purchased outright). It's also an AUC car (this one with 2yr warranty so again, a fairly 'safe' purchase).
If the worst happens and I need to fall back on savings I still have the option of selling the car and pulling most of the money back out of it. I think I've found a balance I'm happy with in terms of having sufficient in the savings pot; my goal is to always have enough money to see me through at least a year without any income if necessary but also enjoying the things I like while I can - I don't want to sacrifice too much of the 'now' for a possible 'future' when I may be too old, ill or dead to enjoy.
Ultimately if there's a little 'thing' at the back of your brain making you doubt it then don't do it but only you know where that balancing point is for you.
Edited by Funk on Friday 28th July 11:25
I have a simple approach to this.
Some folks lease cars, by paying an amount each month. If that work for you, great.
I do things the other way. I pay a good chunk into investments each month. Typically I pay directly into a regular savings account, then when it hits a certain threshold it gets moved to investments with a better rate of return. This gives me a nice 'pot' to draw on when required.
When I feel like changing my car, I look at what's in the pot and decide how much of it I might want to use. Based on that figure, I'll take a decision as to whether I change my car, or wait a while and get something nicer further down the road.
The beauty of this approach in my eyes is that I'm earning money from my investments, rather than paying it out in interest on car finance. Obviously, over the last few years interest rates have been c**p, but money moved into other investments has done ok.
Some folks lease cars, by paying an amount each month. If that work for you, great.
I do things the other way. I pay a good chunk into investments each month. Typically I pay directly into a regular savings account, then when it hits a certain threshold it gets moved to investments with a better rate of return. This gives me a nice 'pot' to draw on when required.
When I feel like changing my car, I look at what's in the pot and decide how much of it I might want to use. Based on that figure, I'll take a decision as to whether I change my car, or wait a while and get something nicer further down the road.
The beauty of this approach in my eyes is that I'm earning money from my investments, rather than paying it out in interest on car finance. Obviously, over the last few years interest rates have been c**p, but money moved into other investments has done ok.
Having had a great selection of Maseratis, 911 turbos, range rovers, M6, RS7 etc by my late 20’s I found the novelty completely wore off.
I now run an electric vehicle (Audi e tron) through my business, and have gone from changing cars every 5 minutes to every 3 years.
We change as we get older. If having the money at this stage of life brings you more joy than having the car, then that’s fine. It might change again in future, or it might not.
Based on your post I think if you bought it you’d enjoy the novelty for a few weeks and then just see it as an expensive ornament that spends most its time on your drive.
I now run an electric vehicle (Audi e tron) through my business, and have gone from changing cars every 5 minutes to every 3 years.
We change as we get older. If having the money at this stage of life brings you more joy than having the car, then that’s fine. It might change again in future, or it might not.
Based on your post I think if you bought it you’d enjoy the novelty for a few weeks and then just see it as an expensive ornament that spends most its time on your drive.
JB33 said:
it's preventing me from enjoying or buying another car.
About 5 years ago, I decided this wasn't a life I wanted and got out of debt other than my mortgage (and still am). Now I have a good paying job (my wife too), never worry about money and have a lot of savings in the bank (around £65k between my wife and I) which is about the same as my outstanding mortgage, so we're now in good shape.
Even if the worst was to happen (job loss etc) I could sell the car and make a little loss. But I still can't bring myself to let any money go, even though i really enjoy my cars.
Maybe I am growing out of the sports car thrill as I get older? lol I mean, it would be a car I would plan to keep for as long as possible but the reality is, I would drive it weekends only, so i dont NEED the car, but it enriches my life a little (but countered by the thought of having car debt).
Such a first world problem ... but it does get to me and a little stuck, any advice for me to consider or even thoughts that I can mull over?
Ok thoughts......you are in a great position financially, effectively mortgage free and x2 people employed and well paid, so relax as you really cannot make (especially with your mindset) a bad decision from here. It might not be an optimal decision but it won't be a catastrophic one.About 5 years ago, I decided this wasn't a life I wanted and got out of debt other than my mortgage (and still am). Now I have a good paying job (my wife too), never worry about money and have a lot of savings in the bank (around £65k between my wife and I) which is about the same as my outstanding mortgage, so we're now in good shape.
Even if the worst was to happen (job loss etc) I could sell the car and make a little loss. But I still can't bring myself to let any money go, even though i really enjoy my cars.
Maybe I am growing out of the sports car thrill as I get older? lol I mean, it would be a car I would plan to keep for as long as possible but the reality is, I would drive it weekends only, so i dont NEED the car, but it enriches my life a little (but countered by the thought of having car debt).
Such a first world problem ... but it does get to me and a little stuck, any advice for me to consider or even thoughts that I can mull over?
What was the GR going to give you? what appealed about it specifically? Would a cheaper substitute make you happy overall? Pleasure from ownership vs guilt form spending/borrowing is the personal conundrum?
I do get your feelings and I deal with it by having older/cheaper but interesting cars, but there are downsides to that obviously but cost balance wise it works better than new cars particularly if you want to chop and change. If you genuinely are buying a long term keeper then the new car makes more sense (as much as any new car does!)
I have a new car adversion purely because whatever it's costing I can almost always see a better use of the money in a used something else, especially for a weekend/second car that you don't 100% rely on. Saying that the GR looks in these times as as good a value for money new car as any.
I'd probably buy a supercharged GT86 for half the price and hope to lose less in the few years I had it?
Or a Mk3 MR2 with a 2zz conversion for less than a quarter of the price, but I'll always miss out on 'newness' and be taking bork/running cost risk and have no peer kudos!
There's a middle ground between "richest bloke in the graveyard" and drowning in debt. I think it's important to find a balance you're happy with.
I understand the dislike people have for the word "debt" but it doesn't need to be a negative word. I'm much more comfortable using a form of finance to run my car than I am throwing a huge chunk of savings at it. Having money in the bank always leaves you with options and security.
I lease my car. I don't have any other non-mortgage lending (I don't even have a phone contract or sky tv), I overpay my mortgage, pay into monthly investments/pension etc. It's a very affordable monthly amount and I've got the added benefit of not worrying about depreciation / trade-in value.
I understand the dislike people have for the word "debt" but it doesn't need to be a negative word. I'm much more comfortable using a form of finance to run my car than I am throwing a huge chunk of savings at it. Having money in the bank always leaves you with options and security.
I lease my car. I don't have any other non-mortgage lending (I don't even have a phone contract or sky tv), I overpay my mortgage, pay into monthly investments/pension etc. It's a very affordable monthly amount and I've got the added benefit of not worrying about depreciation / trade-in value.
Edited by JackJarvis on Friday 28th July 13:01
I am simular that now i want a meanest and could afford it but like having the money in thr bank.
To solve it before I had 15k or so and needed a new car so got a loan at stupidly low 2.9% for 15k and kept the money aside.
I don't regret some of the cars I had ehn i was younger a mr2 turbo at 19 and a noble m12 at 24 but the money invested would have made me pretty wealthy now.but I also have those ace memories of those cars track days and European road trips.
To solve it before I had 15k or so and needed a new car so got a loan at stupidly low 2.9% for 15k and kept the money aside.
I don't regret some of the cars I had ehn i was younger a mr2 turbo at 19 and a noble m12 at 24 but the money invested would have made me pretty wealthy now.but I also have those ace memories of those cars track days and European road trips.
pork911 said:
OP will be too tight to buy that 
JackJarvis said:
There's a middle ground between "richest bloke in the graveyard" and drowning in debt. I think it's important to find a balance you're happy with.
Exactly.On a practical note, £65k in "savings" is by most standards a LOT* of money to have lying around. Consider upping your pension contributions for some sweet sweet tax relief, and a better income later in life.
*and of course, some here consider £65k barely enough for a decent pair of shoes.
TwigtheWonderkid said:
I've always stuck by the mantra of never borrowing money to buy a depreciating asset, unless the asset is required to
make you money (borrowing money to by a taxi, or the like).
As I've never needed to buy a car for money making purposes, I have never borrowed money to buy one.
Checks garage, doesn't exist!make you money (borrowing money to by a taxi, or the like).
As I've never needed to buy a car for money making purposes, I have never borrowed money to buy one.
TX.
I have financed most of my cars over the years: varying deposits, HP and PCP and paid off to own a couple albeit typically traded in the more expensive ones before paying them off to start the ‘rental’ cycle again.
I had a deposit to buy a more exotic car earlier this year but decided stuff it, the thrill wears off quickly and it would just be a weekend toy - and even then, not every weekend.
So I spent the deposit on a low-mileage fully optioned Z4 M40i and very happy with that decision. Paid for, still more than I’ll ever need, fun, can keep it until it falls apart.
I had a deposit to buy a more exotic car earlier this year but decided stuff it, the thrill wears off quickly and it would just be a weekend toy - and even then, not every weekend.
So I spent the deposit on a low-mileage fully optioned Z4 M40i and very happy with that decision. Paid for, still more than I’ll ever need, fun, can keep it until it falls apart.
This thread is an interesting example of how a lot of people treat money as something "specialist".
You've asked a question about something that impacts every single person on this forum but someone has seen the word "money" so it's been tucked away in a sub forum where only people who are interested in money will see it and read it because that's how we seem to treat personal finance in this country.
That isn't intended to be a criticism of the moderators but you can see how so many people wake up aged 65 or whatever and suddenly realise they've not even thought about how they're going to fund their retirement.
You've asked a question about something that impacts every single person on this forum but someone has seen the word "money" so it's been tucked away in a sub forum where only people who are interested in money will see it and read it because that's how we seem to treat personal finance in this country.
That isn't intended to be a criticism of the moderators but you can see how so many people wake up aged 65 or whatever and suddenly realise they've not even thought about how they're going to fund their retirement.
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