Vitamin M - What percent of your annual income do you spend on your car?

d3mon · 15th February 2009, 14:55

Hi guys..

Thought I would ask you a question.
How much percent of your annual income do you spend on a car ?

I will be finishing my education and will be employed soon. I need to know !!

Comments, thoughts and rants in the replies please.

@mods
Can you please create a poll with the options
1. <15 %
2. 15-30 %
3. 30-50%
4. 50-75%
5. ARE YOU KIDDING ME ? ALL OF IT !

I hope I posted it in the right section.

Cheers !

d3mon · 15th February 2009, 23:56

If it helps, it is an anonymous poll !!!

Please respond.

GTO · 16th February 2009, 00:10

NOTE : The poll is NOT public, only to protect those who wish to maintain their privacy.

I FIRMLY believe that your car /s should NOT take anymore than 10 - 12% of your monthly $$$ (the lesser the better). I know for a fact that there's a lot of BHPians way over this comfortable zone, but most of them are younger / students (pocket money) or are in the initial stages of their career. I hope better sense prevails once they grow a little older and have a higher set of responsibilities on their shoulders. We need to understand that a cars costing is not made up of the EMI alone - a popular way of thinking today- they need to visit our cost of ownership article to clearly understand the financial outflow associated with ownership.

I'd rather drive around in a car thats less expensive, personalize it a li't bit, have money in the bank / savings / investments and sleep with that peace-of-the-mind than drive a more expensive car & worry about the next EMI / other large payments. An example : I know of a certain 36 year old who spends about 1/2 of her income on her flashy new German car. When I bump into her at a social gathering, I see her as more of an outright fool than someone of a certain "status" (which she'd hoped).

Related comment : SAVE atleast 40% of what you make. Life will show you more than a single rainy day. Plus, this way, by the time you are in your mid-forties, you'll have a lot of money working for you (interest, dividends etc.).

Related comment II : If you really want that better car, work harder / smarter!! Trust me, it works.

WanderNomad · 16th February 2009, 00:15

veey well said, couldnt agree more!

vishalpipraiya · 16th February 2009, 00:29

I been working for the last 4 years since i graduated. Got a used esteem last year so I can safely say <15%

white_vdi · 16th February 2009, 00:32

d3mon i am in the same phase of life as you. looking for my first job. will stayed tuned to this thread for sure!

d3mon · 16th February 2009, 01:15

Thanks for your inputs, GTO, wandernomad, vishalpipraiya and white_vdi.

I think I didn't frame the question correctly. What I meant was how much of a percentage of your annual income should be the price of your car.

But as it turns out, i guess, monthly expenses are what really matter and they should be kept at a minimum.

I am a don't believe in the whole idea of taking huge loans to furnish the money to buy big 'status enhancers'. I guess I belong to the old school. Earn money the hard way and spend it right.

And that bit about the rainy days, I am sure many of our friends are finding out the price they pay for not saving enough the hard way. I just hope this economic crisis rides out soon and that everybody emerges in good health and even better spirits !

Cheers

aaggoswami · 16th February 2009, 08:41

I will post a few facts. I am still in graduation days. The pocket money I get is reasonable ( just about ), but out of that, approximately 50% goes for my automotive needs. Usually its bike, but also I have added a few things in M800 like steering wheel cover, seat covers and if budget permits, I will be installing HU and speakers also.

My take is if automobiles are your dream, they deserve special treatment from your side. As soon as I am financially more independent, a higher percentage of my income would go here. I think rather than trusting anyone else in life, its better to trust machine and treat it well, fulfill your dreams.

OT :

Quote:

Originally Posted by GTO

Related comment II : If you really want that better car, work harder / smarter!! Trust me, it works.

I disagree. It doesn't. No proper definitions available.

cvvikram · 16th February 2009, 09:00

To be in safer, one has to keep a total budget of approx below 15% of your total income for the vehicle related expenditures.

There are many things in life to make best use of it in the rest of money.

DieselFan · 16th February 2009, 09:05

The question each of us need to ask is what is your dream? Is it to lead a happy life without worrying of tomorrow. Yes that should be your dream. As someone said he spends more than 50% of his income on his car. What else does he do then. Car in itself is not all. You have rent to pay, you have to bring bread on to the table, you need a good vacation once in a while, you need to save for your retirement. The last one is very important.

My two paise here is that saving potential of a person prior to 40 years of age is the highest as he has very limited liabilities. One has to create his retirement fund before the age of 40 and ensure that is invested properly to earn a decent return by the time he/she retires.

Cars should not take more than 10% of your earnings, 40% or more should go towards saving for your retirement.

NetfreakBombay · 16th February 2009, 09:30

Quote:

Originally Posted by aaggoswami

As soon as I am financially more independent, a higher percentage of my income would go here.

Go for it.. when you start out and have NO liabilities and no dependents. At that point you can splurge all your salary. Probably the best part of life (from financial Point of View).

Just make sure you are not making any long term EMI commitment

DCEite · 16th February 2009, 09:39

Given the current recession, and no job security, i would say < 10%.

Edit: On a related note, came across an interesting article in HT business today:

Attitudes towards savings will change- Hindustan Times

Quote:

Crises change people's mindset and their behaviour. The deeper and longer the crisis, the deeper and more permanent are the changes.

Businessmen are now asking, "When will things get back to normal?" If by normal they mean the way things were back in early 2008, then the answer is, “Not for a long time.”

That sounds pessimistic but actually isn't. On New Years' Eve 2007, youngsters thronged restaurants and shopping centres. Jobs were easy, credit cards rampant, and mall builders optimistic. In numbers, those days may come back. The jobs, the sales, the salaries, even the credit will eventually climb back to that 'normal'. But what won't come back is that euphoric feeling.

In America, people say that the Great Depression changed the way a whole generation thought about money, about financial risk and about savings. In India, things will never get as bad as that.

Indians who joined the workforce before 1990 or so have a different way of thinking about money. They grew up in an atmosphere in which intelligent college students used to get easily depressed just thinking about the future. And they don't take opportunities for granted.

I think a good majority of the later generation has negative savings and a negative net worth. They have casually predicated years—even decades—of their future on being able to maintain a growing income flow. And that is exactly where the economic crisis has hit like a psychological tsunami.

I don’t know whether the crisis will get much worse. But if all it does, if it readjusts a whole generation’s attitude to savings, it would almost be worth it. The future is not a straight line upwards. Instead it is a cycle that will have its ups and downs.

This realisation alone could save India's vaunted household savings rate from being flushed down the drain of the new consumerism.

Lu€iFer · 16th February 2009, 09:42

Wow someone voted for "ARE YOU KIDDING ME ? ALL OF IT !"

How I wish this poll was not anonymous

nma83 · 16th February 2009, 09:58

I use my car almost daily to drive to work. And the occasional long drives. My spending on it has not exceeded 10% any time.

Atlblkz06 · 16th February 2009, 09:58

Very well said GTO. I gree with ya on that one.

Its something like this:

I could either put all my money together and buy a Dodge Viper today and slog it out, or invest my money correctly and own a Murcielago 5 years from now.

Its really the same thing as long as smart investments are made. It takes money to make money and squandering it away is the best way to remain poor.

Regarding "Foolish American banks gave home loan to idiots who could not repay, which eventually led to people losing jobs in India. :("

Idiots yes, but the banks are anything but foolish! Capitalism runs the show unrestrained and this is the price of unchecked deregulation.

View Poll Results: %?
<15%	322	56.00%
16 - 30%	163	28.35%
31 - 50%	40	6.96%
51 - 75%	23	4.00%
ARE YOU KIDDING ME ? ALL OF IT !	27	4.70%
Voters: 575. You may not vote on this poll

15th February 2009, 14:55	#1
d3mon BHPian Join Date: Nov 2008 Location: Bangalore Posts: 980 Thanked: 4,865 Times	Vitamin M - What percent of your annual income do you spend on your car? Hi guys.. Thought I would ask you a question. How much percent of your annual income do you spend on a car ? I will be finishing my education and will be employed soon. I need to know !! Comments, thoughts and rants in the replies please. @mods Can you please create a poll with the options 1. <15 % 2. 15-30 % 3. 30-50% 4. 50-75% 5. ARE YOU KIDDING ME ? ALL OF IT ! I hope I posted it in the right section. Cheers !
	() Thanks

15th February 2009, 23:56	#2
d3mon BHPian Join Date: Nov 2008 Location: Bangalore Posts: 980 Thanked: 4,865 Times	If it helps, it is an anonymous poll !!! Please respond.
	() Thanks

16th February 2009, 00:10	#3
GTO Team-BHP Support Join Date: Feb 2004 Location: Bombay Posts: 71,821 Thanked: 321,479 Times View My Garage	NOTE : The poll is NOT public, only to protect those who wish to maintain their privacy. I FIRMLY believe that your car /s should NOT take anymore than 10 - 12% of your monthly $$$ (the lesser the better). I know for a fact that there's a lot of BHPians way over this comfortable zone, but most of them are younger / students (pocket money) or are in the initial stages of their career. I hope better sense prevails once they grow a little older and have a higher set of responsibilities on their shoulders. We need to understand that a cars costing is not made up of the EMI alone - a popular way of thinking today- they need to visit our cost of ownership article to clearly understand the financial outflow associated with ownership. I'd rather drive around in a car thats less expensive, personalize it a li't bit, have money in the bank / savings / investments and sleep with that peace-of-the-mind than drive a more expensive car & worry about the next EMI / other large payments. An example : I know of a certain 36 year old who spends about 1/2 of her income on her flashy new German car. When I bump into her at a social gathering, I see her as more of an outright fool than someone of a certain "status" (which she'd hoped). Related comment : SAVE atleast 40% of what you make. Life will show you more than a single rainy day. Plus, this way, by the time you are in your mid-forties, you'll have a lot of money working for you (interest, dividends etc.). Related comment II : If you really want that better car, work harder / smarter!! Trust me, it works.
	(48) Thanks

16th February 2009, 00:15	#4
WanderNomad BHPian Join Date: Dec 2008 Location: Delhi Posts: 271 Thanked: 11 Times	veey well said, couldnt agree more!
	() Thanks

16th February 2009, 00:29	#5
vishalpipraiya BHPian Join Date: Oct 2007 Location: Pune Posts: 44 Thanked: Once	I been working for the last 4 years since i graduated. Got a used esteem last year so I can safely say <15%
	(1) Thanks

16th February 2009, 00:32	#6
white_vdi BHPian Join Date: Sep 2008 Location: new delhi Posts: 856 Thanked: 38 Times View My Garage	d3mon i am in the same phase of life as you. looking for my first job. will stayed tuned to this thread for sure! Last edited by white_vdi : 16th February 2009 at 00:36.
	() Thanks

16th February 2009, 01:15	#7
d3mon BHPian Join Date: Nov 2008 Location: Bangalore Posts: 980 Thanked: 4,865 Times	Thanks for your inputs, GTO, wandernomad, vishalpipraiya and white_vdi. I think I didn't frame the question correctly. What I meant was how much of a percentage of your annual income should be the price of your car. But as it turns out, i guess, monthly expenses are what really matter and they should be kept at a minimum. I am a don't believe in the whole idea of taking huge loans to furnish the money to buy big 'status enhancers'. I guess I belong to the old school. Earn money the hard way and spend it right. And that bit about the rainy days, I am sure many of our friends are finding out the price they pay for not saving enough the hard way. I just hope this economic crisis rides out soon and that everybody emerges in good health and even better spirits ! Cheers
	(1) Thanks

16th February 2009, 09:00	#9
cvvikram BHPian Join Date: Sep 2008 Location: India Posts: 144 Thanked: Once	To be in safer, one has to keep a total budget of approx below 15% of your total income for the vehicle related expenditures. There are many things in life to make best use of it in the rest of money.
	() Thanks

16th February 2009, 09:05	#10
DieselFan Senior - BHPian Join Date: Mar 2007 Location: Bangalore Posts: 1,584 Thanked: 260 Times	The question each of us need to ask is what is your dream? Is it to lead a happy life without worrying of tomorrow. Yes that should be your dream. As someone said he spends more than 50% of his income on his car. What else does he do then. Car in itself is not all. You have rent to pay, you have to bring bread on to the table, you need a good vacation once in a while, you need to save for your retirement. The last one is very important. My two paise here is that saving potential of a person prior to 40 years of age is the highest as he has very limited liabilities. One has to create his retirement fund before the age of 40 and ensure that is invested properly to earn a decent return by the time he/she retires. Cars should not take more than 10% of your earnings, 40% or more should go towards saving for your retirement.
	() Thanks

16th February 2009, 09:42	#13
Lu€iFer BHPian Join Date: Jan 2009 Location: Ottawa Posts: 33 Thanked: 2 Times	Wow someone voted for "ARE YOU KIDDING ME ? ALL OF IT !" How I wish this poll was not anonymous
	() Thanks

16th February 2009, 09:58	#14
nma83 BHPian Join Date: May 2007 Location: Bangalore Posts: 374 Thanked: 291 Times View My Garage	I use my car almost daily to drive to work. And the occasional long drives. My spending on it has not exceeded 10% any time.
	() Thanks

16th February 2009, 09:58	#15
Atlblkz06 BHPian Join Date: Jan 2009 Location: Atlanta Posts: 164 Thanked: 25 Times	Very well said GTO. I gree with ya on that one. Its something like this: I could either put all my money together and buy a Dodge Viper today and slog it out, or invest my money correctly and own a Murcielago 5 years from now. Its really the same thing as long as smart investments are made. It takes money to make money and squandering it away is the best way to remain poor. Regarding "Foolish American banks gave home loan to idiots who could not repay, which eventually led to people losing jobs in India. :(" Idiots yes, but the banks are anything but foolish! Capitalism runs the show unrestrained and this is the price of unchecked deregulation.
	(1) Thanks