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One of the biggest financial questions I wrestle with is when to spend. Saving has never been an issue for me—my thrifty habits make that easy. What I struggle with is knowing when (if ever) to splurge.
For example, I love rock climbing with my kids. It’s a weekly ritual, and I have no hesitation spending money on those experiences because I know I’m investing in memories before they grow up and move on. That decision feels clear—it’s money well spent on something that truly brings me happiness.
But then there are purchases like a car. I’ve always driven reliable, practical vehicles—mostly Hondas and Subarus—that get me where I need to go without breaking the bank. Lately, though, I find myself looking at high-end cars like Corvettes, Teslas, and other luxury models. I could afford one, but I can’t shake the thought that it’s a huge expense for something that will inevitably depreciate.
So, I keep weighing my options: Do I spend $70K–$80K on a sports car, or stick with another $40K into a new Honda? That extra $30K–$40K, if invested wisely, could shave a year or two off my retirement timeline. It’s a tough call.
Has anyone else struggled with deciding when to spend big on a car, knowing it’s a depreciating asset? I’d love to hear your perspective.
Thanks in advance for sharing your thoughts!
We too have experienced this and other financial decisions. Here’s how we resolve them. If we have saved money for a specific item like a “luxury car” or today that could simply mean a higher end vehicle and we can pay CASH for it then we purchase it even though we know it will depreciate in value. In fact that very thing happened to us a few years ago. We had earmarked 50K for the purchase of a Lexus RX350 my wife wanted. The money appreciated several more thousand and when it was time to purchase the vehicle and take the money out our financial planner tried to get us to make a loan and to keep our money invested. I told him this money was specifically earmarked for a new vehicle and was not part of our retirement account. I could see he wasn’t happy with our decision but it wasn’t his money it was ours to steward as we saw fit. Needless to say he’s no longer our financial advisor and my wife is thoroughly enjoying her new car. We do the same thing when vacationing or flying first class or being generous to our children. If we can pay cash for it and want it then we do it. Of course my wife and I have to be in agreement. The thing is we have struggled and lived frugally all our lives, so now that we finally have a surplus (north of 1 million dollars), we can enjoy a few things we want or desire; or as the writer of this article put it SPLURGE!
Reading these comments is a good way to find out if I really want a new(er) car with all that comfort and safety I imagine. Apparently I don’t because I came away a bit less interested! Thanks for all the discussion. (Maybe I should fix the blind spot indicator on the 2012 Odyssey?! I’ve been putting it off because the repair seemed so expensive for something I’ve driven without for 42 years.)
I am in the same camp — no problem with saving but spending our hard earned money? For what?
First , we live comfortably well, for us who don’t need much and who know how to save on just about everything. So one thing we spent on was when it comes to cars, my husband was 75 at the time splurged on a brand new car with all the bells and whistles for SAFETY! He went to the dealership with a list of safety features: lane change indicator, auto-this and that, comfortable seats and so on. And he got a very good solid car with all he wanted and more.
We used to drive older used cars with horrendous used up seats. After 500 miles drive, we almost could not stand up to exit the car.
My present from him was a brand new truck for my part time job as a gardener, with power assist steering and power brakes and enough room to store my equipment.
So I’ll say as we get older, safety should be our most concerns in spending. Anything that prevent us from landing in the hospital prematurely is worth spending. Home improvement should be done with safety of daily living in mind. Grab bars in the shower, for example.
Now we are thinking of how to gift the profligate relatives who don’t seem to take care of themselves financially. We don’t have children.
As long as my car gets me from point a to b in comfort and meets any other needs I might have, I will continue to drive my 2017 Honda CRV. It will probably be my last car since I am 76 and most CRVs last well over 200,000 miles.