Buying cars is related to picking up goodies from a grocery store. According to Kelley Blue Book, in the last days of 2021, an average new car cost about $47,000, and a used car with about $27,000.
However, anyone can get a car but more pressure is mounted on those who own a car because of maintenance. Therefore, since maintenance is part of buying and owning a car, how much should I spend on a car if I make 100000?
To ensure you spend little and do not exceed the needed boundary, experts have recommended a spending percentage of about 10% – 15% of your income on a car, which is about $10,000 to $15000, which includes car payments, insurance, and fueling fees.
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How Much Should I Spend on a Car if I Make 100000?
$100,000 is a lot of money. If you make this, it is required you spend a considerable amount on your car and maintenance without breaking the bank or getting overwhelmed.
Experts recommend 10 – 15% of your income aside from tax to balance your finance effectively.
If you earn $100,000, you will be required to spend about $10,000 or $15,000. If what you earn is $10,000, you can squeeze out $100 or $150 with insurance, fueling, insurance, etc.
Depending on what your expenses are, you need to budget less depending on the factors that surround your earnings, debts like credit card balance, medical bills, or student loans, if these experiences are out of the way, you can spend lesser than you budget for a car.
Reasons You Should Not Spend Too Much on a Car if you Make $100,000?
Spending excessively on your car is a quick way to lose more than you are worth. It is a quick way to a straight path to hell:
You Run Short of Savings
Maintenance is a money sucker. A new car is no longer a new car a minute after you bought it. The more you drive your car around the street of the earth, the more expensive it is to maintain the car.
You can control the wheels of your vehicle, control the brake, and when switch on the air conditioning, but you can’t control when a leak will happen or when there is a need for upgrading or a break in a part of the car.
Getting your vehicle back in shape after buying it will require spending more on replacement and repairs. Aside from the fact that you spend more on maintenance, you also pay for other things like gas, insurance, traffic tickets, etc.
You don’t want to leave your car broken and battered, a repair is needed to be done, gas is needed for transportation and with these things, your savings are at stake.
You May Live With the Guilt of Being Careless
Each time you spend a token extra aside from your budget, you get pained; you feel some rage when you notice your money, the one you kept for the pleasure and the needs of many other things is no more.
You feel the pain of how your money is reducing each time. Each time you see your money drop, you lose your patience; you lose your peace because you still have some other debts to pay off; you feel poorer and you feel your days are not well calculated.
Cars are noted to depreciate 10% immediately if it is taken away from their lots and each year you drive it, the lesser its value and the more money it will require for maintenance.
Consequences of Spending Too Much on a Car When Making $100,000
Spending more or less has its own advantage and disadvantage. There are consequences when you spend too much on a car if you make $100,000. A few of these consequences are:
1. You Put Bankruptcy on the Move
$100,000 might sound like something big or small but forgetting the figures, remember aside from spending on your car maintenance, it will be overwhelming if other debts are not attended to, student loans if you have one, medical loan, home maintenance, and others.
If these bills are piled together, before you know it, $100,000 is gone without savings or investment that brings in a return on income. It is easy to get into bankruptcy when expenses are more than what you make.
2. You Lose Your Peace but Still Have Your Car
Who is ever stable when they are running down the drain of bankruptcy? Your senses are heightened, and you are pressured to move as fast as you can to break free, but each time you spend more money on keeping your car intact, the faster you go down the drain. You can go bankrupt and have the car.
3. You are Nothing Close to Investment
Investment is important to ensure your finance is sustained. Even if you own cars equivalent to a list of your names, you’re still on the advantage but when you spend excessively on your car maintenance or on accessories to ensure your car is worth a second look, you get distracted from investment and lose the touch of getting a suitable financial life.
What if I Make $100,000 and Buy a $100,000 Car?
If you make $100,000 and buy a car for $100,000, it is a quick way to give up the ghost. There is no other way to survive. This is a naughty move to make except if you are earning about $1,000,000 in profit.
Survival becomes a thing of the past. You have a value proposition that increases, so it isn’t an asset; it is a liability and the more you spend on it, the more you lose your lifetime financial value.
Expert recommends maintaining 10% of your income to be spent on your car while you check your balance and other debts, and maintain steady savings and investments.