I (25F) recently bought my first car and dropped 50k as a down payment for a brand new Lexus. (a really dumb decision, I know.) I feel super regretful because I let myself succumb to the pressure from my mom and friends to finally buy a car since I landed a higher paying job. I hope to have a family and buy a house one day but I cannot help but feel like I put myself in a poor financial position where I will probably never achieve that. Am I still doing okay financially?
- 32k invested into Roth IRA
- 30k invested into 401K
- 62k in high yield savings account
- 24k in CD account
- 30k in debt (car loan)
- 110k salary
- Rent 1,200, Phone 100, Groceries 200
Dear Regretful Car Buyer,
An $80k car? Yes, that was a very dumb move. But hey, at least you bought a Lexus, so you can ride it out for 15-20+ years. That’s the only smart thing about this purchase.
Now, let’s talk about your financial situation. You have $32k in a Roth IRA, $30k in a 401k, $62k in a high-yield savings account, and $24k in a CD account. That’s a total of $148k in savings and investments. That’s fantastic for someone your age!
On the other hand, you have $30k in debt from your car loan. While that’s not ideal, it’s not the end of the world. You have a solid income of $110k, and your expenses are relatively low. You’re paying $1,200 for rent, $100 for your phone, and $200 for groceries. That leaves you with a lot of room to pay down your debt and continue saving for your future.
Here’s my advice: focus on paying off that car loan as quickly as possible. Make it a priority to throw extra money at that debt each month. Once you’ve paid off the loan, redirect that money into your savings and investments.
Remember that we all make mistakes. It’s part of being young. You have time on your side, and you can afford the payments on a $30k loan while still saving aggressively. Don’t beat yourself up too much over this.
You’ve obviously reflected that peer pressure influenced you to make a poor decision. That’s a valuable lesson to learn at your age.
Yes, buying an $80k car on a $110k salary was a dumb move. But you’ve got a lot of things going for you: a high income, fantastic savings, and time on your side. Learn from this mistake, get back on track with your savings and investments, and don’t let peer pressure influence your financial decisions again. You’ve got this!