Building Wealth And Being Happy

A Practical Guide To Financial Independence

It’s Not Just New Cars That Are Killing Our Wallets, Health, and Happiness

North Americans buy a lot of new cars. Robb Engen over at Boomer & Echo recently posted about Canadians setting a fourth consecutive record year in new car purchases, snapping up almost 2 million new vehicles in 2016. Wow. For a country of only 36 million people including children and the elderly, that’s an incredible statistic. U.S. buyers also set a record, buying 17.5 million new cars.

Robb went on to slam these new car buyers, writing:

A used beater isn’t for everyone. But for crying out loud don’t finance it [a new vehicle] over 84 months. And don’t decide halfway through that you need something newer, shinier, or more powerful. Drive the damn thing for a decade or more and enjoy some payment-free years.

It’s time we break the new car payment trap and quit upgrading our vehicles every chance we get. Our wealth depends on it.

Robb is right. The value of a new car plummets when you drive off the lot. New vehicles also have high insurance and interest costs. But even used cars have their downsides. Here are three reasons you should try to ditch your car entirely.

Your Health

A sedentary lifestyle can contribute to an increase in many preventable causes of death. After sitting down in front of a computer for 8 or 10 hours a day, getting into your car for an hour long commute is not doing your body any favours. Walking or biking to work has the opposite effect. People who are physically active for about 7 hours a week have a 40 percent lower risk of dying early than those who are active for less than 30 minutes a week.

Not only are alternative means of transportation better for your health, but they’re also better for the people around you and the environment. Traffic pollution causes a few hundred premature deaths in Toronto every year. Public transit is one possible solution. The City of Windsor claims that one busload of passengers is responsible for 40 fewer vehicles on the road during rush hours, saves 70,000 litres of fuel, and avoids 175 tonnes of emissions a year.

Your Wallet

The average North American works 27 hours per month to keep their car on the road. That’s just gas, insurance, and maintenance! Let that sink in for a minute. Working 27 hours per month just to pay for the privilege of going to work.

Enough said: car ownership is expensive. Ditching your car or going to 1 car per family is a sure way to accelerate your time to financial independence.

Your Happiness

It’s okay to enjoy driving. But commuting is different than driving and U.S. commuters spend about 42 hours per year stuck in traffic jams. Traffic is decidedly not fun and long commutes are linked to things like high blood pressure and lower life satisfaction. One study found that:

The longer people spend commuting in cars, the worse their psychological wellbeing. And correspondingly, people feel better when they have a longer walk to work. The psychological benefits of an active commute appear so significant that driving should be a last resort.

It’s clear that we should work towards shorter commutes for the benefit of our national mental health. Even better if we can make those short commutes somewhat active.

But I Can’t!

North America wasn’t built for cyclists, pedestrians, or public transit.  Car conglomerates and oil giants have lobbied in favour of urban sprawl for a long time. It’s not going to be easy to change your transportation habits. Your lifestyle may not be set up in a way that even makes it feasible. But if you can change your household’s lifestyle to allow for less than 1 car per 2 people, it’ll be worth it.

There are a million of excuses you could come up with for keeping your car. Maybe you have kids and want to have 3 tons of steel protecting them as you barrel down the road on your cell phone. That’s a fine choice to make -as long as you realize it’s a choice and not a necessity: thousands of people raise kids every year without owning a car.  Or maybe you want a car for those great summer road trips. Don’t forget that renting is a thing and is getting easier with apps like Turo.

Of course, if you’re stubborn and want to keep driving, you can retire in your 60’s like most people. But if you want to achieve financial independence sooner rather than later, it’s worth experimenting with major changes to your lifestyle. You can always go back to car ownership if you decide walking or biking isn’t for you. Or you just might find that your wallet, health, and happiness will thank you for the change.

 

Categories: Canada, millennials, personal finance, savings priorities, Uncategorized, USA

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2 replies

  1. Ditching my gas guzzler was the best move I ever made! Here’s to a greener, healthier future!

  2. totally agree… so many reasons/excuses i can think of to not get rid of my truck. But i’ll try.

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