By Dan Miller, WCI Contributor
One of the most important things that you can do to set yourself up for success is to build a strong financial base. This includes things like living within your means, eliminating your debt, and saving for the future. But if you already are doing or have done these things, your finances, in some ways, can become even MORE complicated. While it's good to save for retirement, at some point along your financial journey you may want to also consider intentionally spending some of your money, even if that means buying a non-essential weekend car just for the heck of it.
After all, why live an austere life and build up a retirement war chest that's more than you can ever possibly use?
What Is a Weekend Car?
One possible way to spend intentionally is on what is called a “weekend car” or a “fun car.” This might be buying and fixing up a classic car, purchasing an old muscle car, or procuring a high-end Ferrari. A weekend car is something you don't really need to go from A to B but something you want and would enjoy. The name comes from the fact that a car like this is often enjoyed on the weekends.
How to Buy a Car
There are many different philosophies for how to buy a car and how much money you should spend on the purchase of a car. Certainly, the conventional wisdom among many financial planners is that you should determine how much car you can afford and then buy a reliable used vehicle. Then, drive that used car until it starts breaking down and repeat the process. Following advice like this is one way to get rich by driving a $5,000 car.
While that is sound financial advice for most cases, it's not always the best way to maximize your life. Following this car-buying advice is why some people choose to keep driving their rusty car, even when they could afford a newer, fancier, or more expensive mode of transportation. But what happens if you've already put yourself in a very good financial situation? Is it ever a good idea to spend a lot of money on an extravagant car?
More information here:
Quit Buying Cars On Credit – 15 Reasons to Pay Cash
Taking Advantage of Happiness Economics
As with most financial advice, the answer is “it depends.” While you, of course, shouldn't buy stuff that you can't afford, if you CAN afford it, it may be the right thing to do. While always buying (and paying cash for) a series of solid, reliable used cars over the course of your entire life might be the right decision if your end goal is to maximize the amount of money you accumulate, that is generally NOT most people's overall life goal.
Instead, you can consider what some people call “happiness economics.” Most people would not consider it their overall life goal to completely maximize the amount of money they accumulate. Instead, they want to make sure that they have “enough” money to live on in their retirement while also maximizing their overall happiness throughout the entirety of their life. If you've reached a point in life where most of your main financial goals are taken care of (or well on their way), it's not unreasonable to splurge a bit on things, events, and experiences that make you happy.
More information here:
Should I Buy a Tesla? Here's Why I Did
Should I Buy a Weekend Car?
So, should you buy a weekend car? Only you can really answer that question. And while you probably should consult with trusted friends, family, and advisors rather than getting permission from a random article on the internet, here are a few things to think about as you decide:
- Can you afford it?
- Are you meeting all of your other financial goals? Emergency fund, retirement, insurance, etc.?
- Can you pay cash for the car? It probably does not make sense to take out a loan for a luxury item.
- Is this something that would truly make you happy? Or are you wanting to keep up with the Joneses?
Think over your answers to the above questions. If you can truly answer “yes” to all of them and if a weekend car would make you happy, then go for it.
The Bottom Line
A weekend car is a luxury car that you use primarily for fun rather than actual transportation. While conventional wisdom might say that you should be more conservative with buying a solid, reliable used car rather than splurging on something you don't need, that doesn't apply to all situations. If you are already taking care of the basics of a solid financial plan—like getting out of debt, living below your income, and saving for the future—it can make sense to splurge on non-necessities.
After all, most people do not have the overall life goal to maximize the accumulation of wealth against all other priorities. Instead, many people prefer to have the goal to maximize the overall happiness of their entire life. As you advance further in your life and as you take care of most of the basics of a solid financial plan, it could leave money available for other pursuits, including a weekend or “fun” car. If you can afford to pay cash for your car and if it would bring you joy, talk it over with your trusted friends, family, and advisors and see if you can fit it into your overall financial plan.
Need to get your own financial plan in place? Check out the Fire Your Financial Advisor course! It's a step-by-step guide to creating your own path to financial freedom. Try it risk-free today!
The White Coat Investor is filled with posts like this, whether it’s increasing your financial literacy, showing you the best strategies on your path to financial success, or discussing the topic of mental wellness. To discover just how much The White Coat Investor can help you in your financial journey, start here to read some of our most popular posts and to see everything else WCI has to offer. And make sure to sign up for our newsletters to keep up with our newest content.