How much should you spend on the habit (cars)?
Discussion
Being a car nut, I have always saved a disproportionate amount of my income in order to spend a disproportionate amount of my capital on cars. I've never really gone down the leasing/PCP route, though have considered it a few times, and ultimately it comes back to the same question: how much of your monthly income are you prepared to put towards a car?
When I was 17, this meant saving up my pennies earned at Sainsbury's and spending the lot (all £1200 of it) on my first car.
I held back a little in my late 20's/early 30's to buy my first house, but as soon as that was secured, I started saving again and 6 months later spent my entire capital (plus loaded up a 0% credit card) on a £20k Jaguar XK.
But fast forward to what I begrudgingly accept are now my late 30's and I find, married with a child, our household income is far stronger than it's ever been and I have enough cash sloshing around to buy outright a very tasty Jaguar F Type V6 S Manual (I have a weird thing for F Type manuals...) or a Morgan Plus 8, yet it no longer feels acceptable to blow everything on a toy.
I once heard that you should never pay more than 33% of your income on a place to live, but when saving hard, I am putting over 40% of my personal income into savings, which I would previously have used almost entirely on cars. This does feel excessive.
So what do you think is the magic number? What would % are you happy spending on cars (assuming you're not young free and single and happy to spend the lot on a set of wheels)?
When I was 17, this meant saving up my pennies earned at Sainsbury's and spending the lot (all £1200 of it) on my first car.
I held back a little in my late 20's/early 30's to buy my first house, but as soon as that was secured, I started saving again and 6 months later spent my entire capital (plus loaded up a 0% credit card) on a £20k Jaguar XK.
But fast forward to what I begrudgingly accept are now my late 30's and I find, married with a child, our household income is far stronger than it's ever been and I have enough cash sloshing around to buy outright a very tasty Jaguar F Type V6 S Manual (I have a weird thing for F Type manuals...) or a Morgan Plus 8, yet it no longer feels acceptable to blow everything on a toy.
I once heard that you should never pay more than 33% of your income on a place to live, but when saving hard, I am putting over 40% of my personal income into savings, which I would previously have used almost entirely on cars. This does feel excessive.
So what do you think is the magic number? What would % are you happy spending on cars (assuming you're not young free and single and happy to spend the lot on a set of wheels)?
This comes up a lot on here and the boring answer is that there is no magic number because there are too many variables relating to people's circumstances. You are going through the exact same process that probably most of us have in that you have others that you're now responsible for and you have probably learned many lessons along the way about the value of living well within your means and how that allows you to enjoy things more. I definitely spent far more in relative terms on car outgoing in my 20's than I do now. I don't especially regret it but I would never stretch myself in the same way now.
Sounds to me like you have other priorities, i.e. kid(s). For me, I'm becoming less and less interested in cars the older I get (mid thirties now), I love my RS265 but realistically I don't have time to do what I want with it. In this instance drive it places! My life is so taken up with work, kids, the house that any time I have I'm usually too exhausted to do anything meaningful.
I'm hoping that as the kids get a little older (2 kids under 3 years old), that fire I had will come back. For now, my RS265 serves me fine as a commuter car, but nothing else.
I do however like the idea of shedding... £2-3k on a car, work on it myself and save thousands in the process. Hmmmm...
I'm hoping that as the kids get a little older (2 kids under 3 years old), that fire I had will come back. For now, my RS265 serves me fine as a commuter car, but nothing else.
I do however like the idea of shedding... £2-3k on a car, work on it myself and save thousands in the process. Hmmmm...
You can’t put a percentage on it to cover everyone when people’s circumstances are massively different.
5% might be to much for a man with a massive mortgage, 5 kids who all also have expensive hobbies, and he also have several other hobbies himself.
Or me with zero kids, girlfriend that also earns a decent wage so all bills are split. I pay my bills, put some away and the rest il spend on whatever I want. Could be 50% on my car hobbies.
5% might be to much for a man with a massive mortgage, 5 kids who all also have expensive hobbies, and he also have several other hobbies himself.
Or me with zero kids, girlfriend that also earns a decent wage so all bills are split. I pay my bills, put some away and the rest il spend on whatever I want. Could be 50% on my car hobbies.
Somewhere along the lines I mixed our numbers up as our outgoings on the finance of the car are more like 20%. The flipside our mortgage is around 10% as we already own 85% of our house and have little desire to move to something even bigger (and I have little desire to overpay on the mortgage front if I am entirely honest, enjoying the funds instead on my passion (and to a degree my wife) fufilling something we never thought we would see until in our 50's.
We don't spend extravagently to excess anywhere else in life, so it is make it possible to be really enjoying something and treasure every moment.
Final bit - we don't have children, only a dog (which in fairness is not cheap either!)
We don't spend extravagently to excess anywhere else in life, so it is make it possible to be really enjoying something and treasure every moment.
Final bit - we don't have children, only a dog (which in fairness is not cheap either!)
As much as you want, subject to not jeopardising any of your other financial goals.
As such, it will depend based on what your goals are. Want to retire at 50? Probably don’t buy that Ferrari and whack money into an ISA instead. Not arsed about retiring early, have no kids or dependents? Spend like a drunken sailor.
As such, it will depend based on what your goals are. Want to retire at 50? Probably don’t buy that Ferrari and whack money into an ISA instead. Not arsed about retiring early, have no kids or dependents? Spend like a drunken sailor.
This really is a 'how long is a piece of string' question but one thing I would say is that if you are in a position to save circa 40% of your income while you're still relatively young then I'd be banging a decent amount (at least 20%) into a pension and then be perfectly happy about spending the rest on cars. The best financial decision I ever made was to start saving big (relatively speaking) into a pension when the opportunity presented itself in my early 30s. Yes it may sound a bit boring, and having a decent employer contribution certainly helped make the decision, but it's a hell of a lot more difficult to play catch-up later on. Now I'm approaching my mid 40s my retirement is pretty much sorted even if I only make modest contributions from here on in, and this means that I can spend a high % of my income (which is considerably higher than it was in my 30s anyway) on cars for the rest of my days if I want to and still be 'sensible'.
As soon as the tail starts wagging the dog, you have to ask yourself what are you doing.
If you are skimping on other parts of your life to serve your hobby in terms of time or money, then you’ve overdone it a bit.
I used to live for my car interest as a young man. I’ve largely got a handle on things nowadays but there’s still a time of year when services, MOTs and insurance all seem to coincide that I ask myself.
If you are skimping on other parts of your life to serve your hobby in terms of time or money, then you’ve overdone it a bit.
I used to live for my car interest as a young man. I’ve largely got a handle on things nowadays but there’s still a time of year when services, MOTs and insurance all seem to coincide that I ask myself.
I used to save 10% but I can't afford that any more.
My situation starts off similar to yours, late 30s, I have 3 kids though... missus works part time and we have much, much less money than we did 10 years ago, hell even 5 years ago.
I've always extensively modified my cars, but genuinely worry about the next one, as the wife will say I'm wasting it rather than spending on the house/kids/holidays, which to be honest is absolutely fair enough.
I do have savings, which never get touched, as that's my extension/moving fund when the time arises, but to be honest modifying the car might be the only reason I'd sneak a bit out. Don't tell her indoors
My situation starts off similar to yours, late 30s, I have 3 kids though... missus works part time and we have much, much less money than we did 10 years ago, hell even 5 years ago.
I've always extensively modified my cars, but genuinely worry about the next one, as the wife will say I'm wasting it rather than spending on the house/kids/holidays, which to be honest is absolutely fair enough.
I do have savings, which never get touched, as that's my extension/moving fund when the time arises, but to be honest modifying the car might be the only reason I'd sneak a bit out. Don't tell her indoors
It sounds like OP you were buying sensibly, considering it is hobby, back when you had less responsibilities i.e. you saved and bought for cash/no finance.
Fast forward to today you've got yourself life responsibilities so blowing the lot on a car would no longer be sensible. And if this wedge of cash is "all" you have then definitley not with young kids and who knows what else around the corner. I'd say keep 75% of it stashed away and release 25% for a car/hobby as you still need to live.
Depending on your attidute to finance you could borrow a bit to get a better car and keep savings intact, but then that will be double edge sword as you won't be able to save as much going forward until the loan is paid off.
Fast forward to today you've got yourself life responsibilities so blowing the lot on a car would no longer be sensible. And if this wedge of cash is "all" you have then definitley not with young kids and who knows what else around the corner. I'd say keep 75% of it stashed away and release 25% for a car/hobby as you still need to live.
Depending on your attidute to finance you could borrow a bit to get a better car and keep savings intact, but then that will be double edge sword as you won't be able to save as much going forward until the loan is paid off.
I often wonder how people's financial approach works.
Not being a willy-waver, but I have a good job and earn money which one would classify as 'good'
I have a house, a wife and no kids. I save quite a bit and contribute to a pension, but I still don't feel like I could blow tens of thousands on a second car, like a lot of people do on here, or even blow a lot on something like a Range Rover or similar.
My priorities are house and pension. Once those are paid off/sorted, then I'll look closer at toys. Don't get me wrong, I will drive something nice, we have nice holidays and do nice things, but we are not.......frivolous.
This is a super-safe strategy......but is it too safe? Each to their own I guess.
Not being a willy-waver, but I have a good job and earn money which one would classify as 'good'
I have a house, a wife and no kids. I save quite a bit and contribute to a pension, but I still don't feel like I could blow tens of thousands on a second car, like a lot of people do on here, or even blow a lot on something like a Range Rover or similar.
My priorities are house and pension. Once those are paid off/sorted, then I'll look closer at toys. Don't get me wrong, I will drive something nice, we have nice holidays and do nice things, but we are not.......frivolous.
This is a super-safe strategy......but is it too safe? Each to their own I guess.
So many variables it's hard to put a percentage on really.
If you're in your 20s, saving for your own place and can have a nice car without being skint, then why not. Priorities do tend to change as you get older though. I own my cars outright now, if I had more disposable income I might buy something else but I'd likely borrow against the car and pay it back. I'm not a fan of PCP personally or those kinds of leases.
Prioritise buying a home for sure and sounds like you save plenty OP, then once that's sorted buy something you can afford easily and enjoy.
If you're in your 20s, saving for your own place and can have a nice car without being skint, then why not. Priorities do tend to change as you get older though. I own my cars outright now, if I had more disposable income I might buy something else but I'd likely borrow against the car and pay it back. I'm not a fan of PCP personally or those kinds of leases.
Prioritise buying a home for sure and sounds like you save plenty OP, then once that's sorted buy something you can afford easily and enjoy.
Muzzer79 said:
I often wonder how people's financial approach works.
Not being a willy-waver, but I have a good job and earn money which one would classify as 'good'
I have a house, a wife and no kids. I save quite a bit and contribute to a pension, but I still don't feel like I could blow tens of thousands on a second car, like a lot of people do on here, or even blow a lot on something like a Range Rover or similar.
My priorities are house and pension. Once those are paid off/sorted, then I'll look closer at toys. Don't get me wrong, I will drive something nice, we have nice holidays and do nice things, but we are not.......frivolous.
This is a super-safe strategy......but is it too safe? Each to their own I guess.
You are just prudent. A word you don’t hear much any more.Not being a willy-waver, but I have a good job and earn money which one would classify as 'good'
I have a house, a wife and no kids. I save quite a bit and contribute to a pension, but I still don't feel like I could blow tens of thousands on a second car, like a lot of people do on here, or even blow a lot on something like a Range Rover or similar.
My priorities are house and pension. Once those are paid off/sorted, then I'll look closer at toys. Don't get me wrong, I will drive something nice, we have nice holidays and do nice things, but we are not.......frivolous.
This is a super-safe strategy......but is it too safe? Each to their own I guess.
I know what you mean. It's all about being comfortable really. I certainly wish I was more responsible with money when I was younger as I am literally paying for it now (plus the joys of financial responsibility for two young kids).
I should have the finances wrapped up next year and do wonder about dropping £20k into a 991 Turbo and 5-10 years ago that would have been a no brainer but now? I'll probably just keep what I have and enjoy the extra time with the little ones.
I should have the finances wrapped up next year and do wonder about dropping £20k into a 991 Turbo and 5-10 years ago that would have been a no brainer but now? I'll probably just keep what I have and enjoy the extra time with the little ones.
Muzzer79 said:
I often wonder how people's financial approach works.
Not being a willy-waver, but I have a good job and earn money which one would classify as 'good'
I have a house, a wife and no kids. I save quite a bit and contribute to a pension, but I still don't feel like I could blow tens of thousands on a second car, like a lot of people do on here, or even blow a lot on something like a Range Rover or similar.
My priorities are house and pension. Once those are paid off/sorted, then I'll look closer at toys. Don't get me wrong, I will drive something nice, we have nice holidays and do nice things, but we are not.......frivolous.
This is a super-safe strategy......but is it too safe? Each to their own I guess.
Same, pretty much. Although you probably earn more than me, but... me and the Mrs have a fairly small mortgage (£600/pm) in the North East, have no kids or pets or really any other expenses and we bring in more than the average household for the area, and I consider myself fairly fortunate to be in that situation...Not being a willy-waver, but I have a good job and earn money which one would classify as 'good'
I have a house, a wife and no kids. I save quite a bit and contribute to a pension, but I still don't feel like I could blow tens of thousands on a second car, like a lot of people do on here, or even blow a lot on something like a Range Rover or similar.
My priorities are house and pension. Once those are paid off/sorted, then I'll look closer at toys. Don't get me wrong, I will drive something nice, we have nice holidays and do nice things, but we are not.......frivolous.
This is a super-safe strategy......but is it too safe? Each to their own I guess.
That said though, I also wonder how people can afford / justify spending what some do on even a primary car, never mind a second (toy) car.
I've recently just bought myself a car for £12k which is the most I've ever spent on a car, and even this I saw as quite an extravagant treat, a kind of 'YOLO' type purchase, even though to most on here it wouldn't be anything special.
That said we like not being skint, so there is something to be said on getting something you like but doesn't cost much in the grand scheme. I probably mainly did it because, for once, I fancied driving around in something that isn't ~ 20 years old.
I've also wondered if I was just too risk averse / safe.
TameRacingDriver said:
Muzzer79 said:
I often wonder how people's financial approach works.
Not being a willy-waver, but I have a good job and earn money which one would classify as 'good'
I have a house, a wife and no kids. I save quite a bit and contribute to a pension, but I still don't feel like I could blow tens of thousands on a second car, like a lot of people do on here, or even blow a lot on something like a Range Rover or similar.
My priorities are house and pension. Once those are paid off/sorted, then I'll look closer at toys. Don't get me wrong, I will drive something nice, we have nice holidays and do nice things, but we are not.......frivolous.
This is a super-safe strategy......but is it too safe? Each to their own I guess.
Same, pretty much. Although you probably earn more than me, but... me and the Mrs have a fairly small mortgage (£600/pm) in the North East, have no kids or pets or really any other expenses and we bring in more than the average household for the area, and I consider myself fairly fortunate to be in that situation...Not being a willy-waver, but I have a good job and earn money which one would classify as 'good'
I have a house, a wife and no kids. I save quite a bit and contribute to a pension, but I still don't feel like I could blow tens of thousands on a second car, like a lot of people do on here, or even blow a lot on something like a Range Rover or similar.
My priorities are house and pension. Once those are paid off/sorted, then I'll look closer at toys. Don't get me wrong, I will drive something nice, we have nice holidays and do nice things, but we are not.......frivolous.
This is a super-safe strategy......but is it too safe? Each to their own I guess.
That said though, I also wonder how people can afford / justify spending what some do on even a primary car, never mind a second (toy) car.
I've recently just bought myself a car for £12k which is the most I've ever spent on a car, and even this I saw as quite an extravagant treat, a kind of 'YOLO' type purchase, even though to most on here it wouldn't be anything special.
That said we like not being skint, so there is something to be said on getting something you like but doesn't cost much in the grand scheme. I probably mainly did it because, for once, I fancied driving around in something that isn't ~ 20 years old.
I've also wondered if I was just too risk averse / safe.
I often wonder
“Who is buying these M3’s/Range Rovers/etc?”
Cos I earn good money and have very little in terms of dependents, but I don’t feel like I’m in a position to be able to.
I save enough to be able to cover payments on something really nice, but don’t want to drop it all on a car.
Perhaps I’m tight. Perhaps some people are more YOLO than I am.
I don’t believe in living completely to your means.
Perhaps it comes from being a little burned when I was younger. I put a lot into a car when I was in my early 20s and ended up regretting it - once the novelty wears off, you’re just left with something sitting on a drive whilst you’re thinking about what better things you could have done with the money. At least, I do.
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