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You can't spend the money both on entertainment and on a car. Each dollar can only be spent once. If your budget has them spend it on entertainment, then they won't have it later on. If they get a car loan after following your budget for a few years because they blew their disposable money on entertainment, they have essentially gone into debt to pay for the entertainment. And they have no investment to show for it. It's irrelevant what return an investment can earn if you don't have any investment to begin with!
You might want to take a second look, they are making another 8k, BEYOND the 400/month or $4800 a year they have earmarked for entertainment. So no dollar is being spent twice.
Seriously, we get you don't like debt but stop with the generalizations.
Taking out a loan you can afford is not a bad thing. People with such an adverse view towards debt are just as bad as the ones who overextend themselves.
I teach my junior guys to be responsible which means buying a normal, well priced, reliable car with a fair interest rate as well as saving for retirement and separation (if they're getting out). Blowing a good portion of your savings on a car because you don't want a loan is irresponsible.
By assuming a cash buyer would spend too much of their savings, you are assuming they would be left with an insufficient emergency fund. Perhaps I generalize, but so do you.
You might want to take a second look, they are making another 8k, BEYOND the 400/month or $4800 a year they have earmarked for entertainment. So no dollar is being spent twice.
By assuming a cash buyer would spend too much of their savings, you are assuming they would be left with an insufficient emergency fund. Perhaps I generalize, but so do you.
How much do you think junior enlisted make? After a year, they would probably be able to save about 10k. The ones who live in base housing make at most around 1k a pay check.
What do you suggest? They walk around for a year until they can buy a car?
An enlisted family will need a car. It's not possible to live without one. Implying that they are irresponsible if they take on a small payment is just plain ignorant.
Seriously, we get you don't like debt but stop with the generalizations.
Taking out a loan you can afford is not a bad thing. People with such an adverse view towards debt are just as bad as the ones who overextend themselves.
I teach my junior guys to be responsible which means buying a normal, well priced, reliable car with a fair interest rate as well as saving for retirement and separation (if they're getting out). Blowing a good portion of your savings on a car because you don't want a loan is irresponsible.
Exactly, if you blow all your cash on a $20k, and then run into an issue where you need $5/10/15/20k, you are SOL. Few reputable places will loan that kind of cash out, and the few that do will charge well in excess of 0.9%apr (my first/last signature loan was 8.9%).
A paid off 20k car with no assets in the bank is dangerous. Even Dave Ramsey recommends having access to liquid-able asset reserves before getting aggressive with debt elimination.
Exactly, if you blow all your cash on a $20k, and then run into an issue where you need $5/10/15/20k, you are SOL. Few reputable places will loan that kind of cash out, and the few that do will charge well in excess of 0.9%apr (my first/last signature loan was 8.9%).
A paid off 20k car with no assets in the bank is dangerous. Even Dave Ramsey recommends having access to liquid-able asset reserves before getting aggressive with debt elimination.
I spent 26 years in the military, I've been retired another 15 years, and I've yet to spend more than 12K on a car...and I went from a high of $9k to $12k only last year.
The advice that young troop needs is, "Don't spend $20K on a car."
I spent 26 years in the military, I've been retired another 15 years, and I've yet to spend more than 12K on a car...and I went from a high of $9k to $12k only last year.
The advice that young troop needs is, "Don't spend $20K on a car."
I mentioned it in another thread you are on, borrowing for a car is not a bad idea. I can buy a minivan from just about every manufacture out there for 0.9% for 60 months, and I can get 1.49% from USAA, ...
It is nice that USAA finally decided to cater to US Servicemembers. During my career I went to them twice and was turned away both times. Back then they only dealt with officers.
California only charges income taxes when you stationed inside California. So long as you stay away, they do not charge you taxes.
How did you not pay federal income taxes?
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