If you’re debating whether or not to buy a new or used car, consider this: beware of death by entitlement.
Many Millionaires Still Drive Used Cars
Just the other day I was talking with someone about Dr. Stanley’s book “The Millionaire Next Door”. I was making a point of the fact that used cars are really the only cars that middle class people should be purchasing, and that plenty of millionaires still drive used, even though they could afford one, two, three, maybe even four new automobiles per year. It seemed like a solid principle to me: Middle-class people should drive used cars.
Wait, So The Rest of Us Have to Drive Used?
The response from my friend was surprising: “Oh, that’s real fair. So only the millionaires get new cars, and all the rest of us have to drive used?”
Re-read that statement.
What Can You Afford?
Of course only the millionaires should drive new cars – they’re the only people who can afford them. Here’s a money managing tip: It doesn’t matter what’s fair or not fair. Would you go out and buy a multi-million dollar home? Of course not. You can’t afford it. So why, why, why then do you go out and buy cars you can’t afford? Why do you shoot yourself in your financial foot? There you are, on your way to some stability and then you go out and buy way, way too much car.
I’ve thought a lot about the meaning behind that comment and our “Jones” mentality and it seems like a clear case of entitlement. Why should we drive used cars? It isn’t fair that only the rich get to drive new cars. It’s not fair, it’s not fair, blah blah blah blah.
Hold on to Common Sense with Managing Money
Alright, based on the amount of bankruptcies in this country (We’re in Utah – No. 1 state for personal bankruptcies), it’s obvious that this sense of entitlement has over-ridden our sense of…well, just that I guess – our common sense in managing money.
Have the Guts to Say “I Don’t Deserve This”
When will we be able to sit back and honestly say to ourselves: “I don’t deserve this.” That takes some guts. That takes some courage. I’ll take a phrase that Dave Ramsey seems to have coined: “Live like no one else, so later you can live like no one else.” Well said. A slight variation of that also applies: “I’ll live the way you won’t for ten years, so that I can live the way you can’t for the rest of my life.” If we could just grow up a little bit and realize that we don’t need everything now, now, now. Sit back. Relax. Ask around. Get advice. And above all, have the guts to say to yourself that you don’t deserve something right now.
Avoid Feeling Entitled to Things
It’s ironic that those who have the means, so to say, don’t have this problem of entitlement. That’s why they’re wealthy! That’s where they got their “means”. They don’t feel like they deserve things they can’t afford. So there you have it. The #1 money managing tip I could give you is to not feel entitled to things.
Just Because You Can’t Afford it Now Doesn’t Mean You Can’t Afford it Later
Don’t get me wrong. I love stuff. I love new things. But that does not mean that I deserve all of these things right now. The wise (soon to be wealthy) man will supress his desire for instant gratification for a greater cause. With a longer perspective, we’ll be able to see that although we don’t deserve something at the moment, it doesn’t mean we won’t be able to afford it in the future. Put off what you think you “deserve” now and wait to fight another day. Your finances will thank you.
Heed this warning: Those who feel entitled to things they can’t afford will never get their head above the water. Their money managing capabilities will fall victim to “Death by Entitlement.”
Here more about my common sense approach to money in my short weekly podcast that’s also on YouTube. Try this episode: “Your Car is a Wealth Sucking Parasite.”