This week I read an article from MarketWatch discussing Americans’ love of pickup trucks. The pickup truck is seen as a status symbol in many parts of our country but it may very well be taking away the ability for millions of Americans to build wealth and save for retirement.
Are you truck (or car) poor? How much is your monthly car payment(s)?
The average purchase price of a new pickup truck in 2019 was nearly $50,000. Assuming you finance it at 3% for 60 months, you’ll pay $898 per month. That doesn’t include insurance, gas, and all the maintenance you’ll have to cover as well.
While you might need a truck for work, buying a brand new one isn’t a need. Car and truck payments are one of the biggest killers of wealth in America. Every dollar that goes towards them is a dollar that can’t be invested or saved for emergencies and car payments keep many dependent on their jobs.
It’s normal to spend more on vehicles than we save for retirement. I know it’s hard for many to save and afford basic necessities, especially during this pandemic, but if you’re truck or car poor it’s time to consider making a change.
What if you bought a used truck that’s only a few years old for around $25,000? Assuming you finance it at 3% for 60 months, your truck payment is then only $449 per month. This not only helps you avoid depreciation on a new truck, but it gives you $449 a month to save and invest and do whatever you want with.
The savings from buying a used truck is almost enough to max out an IRA “Individual Retirement Account” each year. You could also increase your monthly contribution if you have access to an employer-sponsored retirement plan like a 401K. If you’re able to invest $449 per month for 30 years, your money could grow to over $636,000 assuming an 8% annual return.
It’s your choice. Would you rather have a fancy truck or financial freedom? Only you know the answer.
Making smart money decisions matters. By not doing the normal average thing, you can set yourself up to build wealth and create the life of your dreams.
It can be hard to know where to start or what to do first. As a financial coach, I have helped hundreds of people get out of debt, save more, and transform their relationship with money.
I will help you create a system that builds the right money habits to enable you to achieve your financial goals. Everyone’s situation is unique so you’ll get personalized coaching tailored to your specific needs. I guarantee that you’ll leave feeling confident about your financial future and in control of your money!
If you’re interested, please schedule a free consult on my website and we can see if we are a good fit for each other. You can also email me with any questions at firstname.lastname@example.org.