A running conversation is what should come first when you’re starting life – a car or house? Some would say a car because it’s easier to acquire and you need easier means to travel as well as safety reasons. There are also those who would advise getting your home earlier because it’s a better investment and you get better rates. This conversation may be a bit frustrating for you, but not to worry,  Financial Advisor Fredreesha Smith gives some advice that can help you decide. 

Smith shares:

I personally see a car as a liability and a house as an investment, especially if that house is a freehold title and comes with land. Land can appreciate over time and cars don’t. A house, and real estate, in general, has over time proven to be a solid investment. 

I think it’s public knowledge that the moment you drive a new car out of the car mart, it starts depreciating at a rapid rate. 

A car has ongoing maintenance costs that you need to factor in also. As a young adult probably fresh out of college or even still in college with little to no savings it just doesn’t make sense. Especially if you’re going to take out a loan to get a new car. Unless you’re using that vehicle to make your income. 

If you need a car to travel to work (if public transport is bad considering the pandemic and various situations), get a used car that’s cheap but in good working condition. 

It might not look as pretty, but as long as it reliably gets you where you need to be, it will suffice. Young people should make their decision based on whether or not it will be a financial asset, rather than solely on the challenges of public transportation. 

As young adults though, at this point your goals should be to create a solid financial platform on which you can build everything else.