How Your Car Can Blow Your Budget
A car is a necessity... until it becomes an indulgence.
Many of us hold ourselves to a budget that separates our necessities from our discretionary spending. It's a good exercise to ensure we have enough money to go around and don't spend ourselves into ruin.
For most folks, a car falls into the "necessities" side. It's our way of getting everywhere we need to go. They're how we get to work... do our grocery shopping... and visit family.
If you think of discretionary spending, you're probably thinking of something like date nights... new golf clubs... or tropical vacations... not commuting in your Honda.
And this mindset makes it easy for you to throw away hundreds, perhaps thousands of dollars – rather than using your wealth where it's most valuable to you.
This week in Health & Wealth Bulletin, Doc Eifrig and his team will be sharing bad habits for your health and wealth.
As the auto expert on Doc's team, I'm going to explain how buying a car with the wrong mindset can be a financial mistake – and the better way to approach the process.
Here's what I mean...
We established that, for many of us, a car is a necessity. But how much "car" do you need to meet that necessity? Four wheels and a seat? Enough room for a family of five? What else is an absolute must?
That minimum is your necessity... The rest is an indulgence.
I certainly won't begrudge anyone an indulgence that they can afford and appreciate. What's the point of wealth if you can't enjoy it?
But when you choose your next car, you may find there's a better use for your money.
Maybe you'd love a swanky, powerful $64,000 Toyota Sequoia full-size SUV... But you'd rather have a four-cylinder $41,000 Toyota Grand Highlander plus a $23,000 bathroom renovation.
Maybe you're interested in a $29,000 Kia Sportage compact crossover... But you'd be happier buying a subcompact $24,000 Kia Seltos and spending the extra $5,000 on that European vacation you've always dreamed of.
Maybe you'd value a $44,000 Ford Ranger Lariat pickup with leather seats, a 10-speaker premium stereo, and automatic climate control... Or maybe you'd be more comfortable in a $35,000 Ranger XLT so you could set aside the remaining $9,000 for your retirement.
Or maybe you'd like a sunroof on your Nissan Sentra, but for $650, you could instead splurge on that fancy brand of yogurt for the next seven years.
That's not something I can answer for you. It's up to you where in your life you'd like to spend freely and where it's more natural to pinch pennies.
The thing is, cars are so expensive that even a seemingly small price difference between two models – or even a single optional feature – can be a big deal for your overall household budget...
It's time to quash this bad habit. Don't spend carefully on small things all year, then throw away your progress by being careless on a big purchase.
When you choose your next car, carefully consider your wants versus your needs – and be sure you're spending your hard-earned money on the right indulgence for you.
We'll continue our series on bad habits tomorrow...
And next week, Doc and his team will share good habits that you can try to form for the new year.
What We're Reading...
- Did you miss it? Our 'Car of the Year' was too good to last.
- Something different: Jeep's 'ugly sweater' trail armor.
Here's to our health, wealth, and a great retirement,
Brady Holt with Dr. David Eifrig
December 22, 2025