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I would like some feedback here. My wife and I have all but about 5k in revolvong debt paid off. This will be completely gone within the next 6 months.
We have never really budgeted and would like to start. The only loans we have will be our auto loan(16k) and a home loan. We bought our first house 2 years ago. We run on my income alone and have a few children. I do well enough where she doesnt have to work and we can spend money pretty free, but I am tired of wasting it! I WANT TO RETIRE YOUNG!
My question is, should we get rid of the auto loan and save the $360 month and buy a family suv/van with cash? Or will I pay the same on average with buying an older vehicle, with more miles?
My wife loves her car and says " we can afford it, we have very little debt", my response is always " we cant afford it if we borrowed money to get it" .
should we get rid of the auto loan and save the $360 month...
and buy a family suv/van with cash?
With what cash?
Do you anticipate a big pile of excess from the selling price minus the loan balance?
You need the actual and specific numbers for this evaluation.
And don't forget the "opportunity cost" for the cash you'll be using to buy that reliable used car/SUV
that your wife will be driving around with your kids inside of.
Quote:
Or will I pay the same on average with buying an older vehicle, with more miles?
Few Questions:
How much do you have in your Emergency Fund?
What is the intrest rate on auto loan?
Do you 'need' the suv now? or can you wait a while till the car is payed off and you get some payed off use from it. and bank the $360/mo towards the SUV in 5 years?
I would like some feedback here. My wife and I have all but about 5k in revolvong debt paid off. This will be completely gone within the next 6 months.
We have never really budgeted and would like to start. The only loans we have will be our auto loan(16k) and a home loan. We bought our first house 2 years ago. We run on my income alone and have a few children. I do well enough where she doesnt have to work and we can spend money pretty free, but I am tired of wasting it! I WANT TO RETIRE YOUNG!
My question is, should we get rid of the auto loan and save the $360 month and buy a family suv/van with cash? Or will I pay the same on average with buying an older vehicle, with more miles?
My wife loves her car and says " we can afford it, we have very little debt", my response is always " we cant afford it if we borrowed money to get it" .
Thanks,
It sounds like you have two vehicles but you don't come out and say so.
It also sounds like you have a lease not a loan, which is it?
In general, you should be saving no less than 5-10% of your *gross* for every $50,000 you make. If you make $100,000 then you should be saving 10-20% of gross; $150,000 would be 15-30%, etc.
This will help your wife better understand what is affordable and what is needed for early retirement.
Last edited by James1202; 10-11-2011 at 12:47 PM..
Reason: spelling
Didn't you just buy an Escalade? Is that the one you owe the $16K on? Or did you pay cash for that and have another vehicle that you owe money on?
Regardless, you expect an $8-10K windfall shortly due to a great sales month in September. Why not just throw the extra at your car note and pay it off over the next 2-3 months? That gets you out from under the loan quickly and allows your wife to keep the car that she likes; seems like the best of all worlds unless I'm missing something.
No lease. We have a loan for 3 more years with Toyota financial at 5.9% totaling$15,978.
We only have her car in our name, I have a free comp car.
emergency fund : terrible for our income level. $6,000
We do not have to get rid of the van, but would like to "cut the fat" And get serious about our future.
Look at an amortization table and see how much interest you are paying every month on an auto loan, and it will make you sick. Pay off the loan ASAP and never do something so foolish again....
We could certainly pay extra on her car, but is it wise to keep it or buy something with cash, get rid of the loan and save?
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