- #1 - You might want both, but what do you need more?
- #2 - Be realistic: can you really afford?
- #3 - Consider your current lifestyle
There is a huge surge in the job market at the beginning of every year when thousands of young people start their career. No one can ever describe the feeling of your first salary slip, crisp beneath your fingers, and safe in your account.
For many people, it is the most they have ever earned in their entire life and for others, it is the first time they have ever earned anything in their entire life.
The only question left is: “What do I buy with my first salary?”
The most common options are a car or an apartment. However, answering that question may not be as simple as you think. On the one hand, having your own car means freedom as it will definitely make it easier for you to get to work and back, and you don’t have to rely on carpooling or public transport any more.
On the other hand, a car is a depreciating asset which means its value decreases over the years. If you buy the right property in an area where public transport or your work is easily accessible, however, you can work towards paying off a lifelong investment.
So, where to now?
#1 – You might want both, but what do you need more?
If you are still living with family or renting a cheap place, a car might seem like the logical option, especially if you have to rely on other people for lifts.
But you should sit down and carefully work out what your current rental option is and whether it is cost-effective.
Do you want to continue with it for the next few years whilst paying off a car? It will definitely take you longer to move out and move into a place that you can call your own.
If you did not have to pay a car off for the next 5 years, including its maintenance and insurance, you might be able to afford living closer to work even if you have to pay more rent. You might end up being in a position where you can save enough to buy a car cash or put down a hefty deposit for your first apartment.
If you work really smart with your money, you might even be able to afford both in due time!
#2 – Be realistic: can you really afford?
People often forget that there is a huge difference between what we want and what we can afford.
If you decide that you would rather want an apartment, you will need to make sure that you can comfortably afford the bond instalments every month, insurance, the deposit and the transaction fees that go with it. You also need to ensure that you can live comfortably and that you can pay the rates and taxes.
If your finances can’t make this type of stretch, then you need to reevaluate what you spend your money on and adjust your lifestyle so that you can reach your main goal.
#3 – Consider your current lifestyle
Many people don’t mind renting a place, but they really hate taking public transport, for example, so they would always choose a car instead of an apartment. Other people would rather want a place that they can call their own and live stress-free without worrying about annual rent increases.
Naturally, they would opt for an apartment and worry about saving up for a car much later. The point is that no one can make these decisions for you or on your behalf. You and you alone need to be completely honest with yourself and make your choice according to your goals and priorities.