When do we enjoy ourselves?

[Gabriel Benavidez]

Hi, it's been a while that I haven't posted, but I'm just curious if I am the only one that feels guilty when I try to spoil myself. So I'm currently driving a 2005 Durango with no AC and I'm wanting to get my dream truck also to have a nice weekend truck, but at the same I feel like I do not deserve to buy something. Both of my rental houses are doing well producing good cash flow, but back in my back of my head, I'm telling myself another rent house will be a smart decision, but that's hasn’t not happening till 6 more months and I know vehicles are bad investments but when do we start enjoying ourselves

[Jon Holdman]

Well, to start with you should not equate enjoying yourself with spending money.  Stuff is not a good source of happiness.  Wanting stuff can be a stronger source of happiness than actually getting stuff.  The good feelings you would have driving that "dream truck" off the lot will fade.  The cost of owning it will linger.  Whether you get a loan and make those payments or you pay cash and then wish you had that money back in your account.

That's not to say stuff is irrelevant.  If you're living under a bridge, moving into a house or apartment will dramatically improve your life.  But if you move from a basic, 1000 sq.ft. house to a 5000 mini-mansion, the improvement is much less.  Generally experiences, and not stuff, are what make you happy.

I would apply two rules to any purchasing decision.   One, and this is the absolute key to financial success, is spend less than you make.  Whether you make $20K a year and spend $25K or you make $200K and spend $225K you're digging a hole and crawling into it.  Turn those numbers around and you're on a path to financial stability.  Sounds like you may already be on this path.   Second is to buy the minimal thing that meets your needs.  The word "dream" always scares me when applied to objects.  I wrecked my 2000 Xterra two years ago.  Well, not much of a wreck (I still went skiing), but it doesn't take much to total a 16 year old vehicle.  I debated on what to buy for a replacement.  I ended up with a three year old F150 XLT super cab.  Would I have liked a F250 super cab Lariat with a long bed?  Yep.  Or a brand new Raptor?  Yep.  But the truck I bought meets my needs.  I can haul a load of lumber or mulch and pull my camper.  Ultimately, its just a truck.  And I was really sad to see that Xterra go.  Until my wife bought a new, but extensively hail damaged Subaru last year (to replace her hail damaged and totaled 10 year old Camry), that Xterra was the last new vehicle I bought.

So, my advice is that if your income supports replacing your truck and you can find the cheapest thing that meets your needs, go ahead.  If you have to take on debt you will struggle to repay, wait.  Income first, lifestyle second.  

I think Dave Ramsey has good advice for this.  He says "do what other people can't so you can do what other people can't".  If you're in debt up to your eyeballs and you add to that debt each month you have fewer choices in life than someone who has money in the bank and is cash flow positive each month.  You look young in your picture.  Consider that spending $30K right now (or even over the next five years for payments) vs. saving that $30K and letting it grow for the next 30 years.  Even at 5% growth, that $30K is worth $130K 30 years from now.  Do you really want to spend $130K for your dream truck?