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Um, because aside from the take home pay and his rent, everything is made up.
(btw, if he deducted $1500 pretax for 401k, he's have less taxes and mo' money)
If you would enjoy a new car, then get one, enjoy the fruits of your labor. You make decent money and it sounds like you spend prudently, is your credit good? Do you sock money away in savings or investment? If credit is good, you can get a low (~2%) car loan, if you invest, your probably good for 5% or better return, so you'll still net investment growth. So keep doing what you're doing and enjoy a new ride.
If you would enjoy a new car, then get one, enjoy the fruits of your labor. You make decent money and it sounds like you spend prudently, is your credit good? Do you sock money away in savings or investment? If credit is good, you can get a low (~2%) car loan, if you invest, your probably good for 5% or better return, so you'll still net investment growth. So keep doing what you're doing and enjoy a new ride.
credit is tier 1, excellent. i try to save as much as i can but i don't budget all that well. i have about $20k saved up, a $8k car (paid off) to sell and put towards the new one, no student debt or loans of any kind.
i automatically contribute 8% to my 401k and 8% to my ROTH IRA. so a total of 16%.
You're renting? A home may be a better idea. It will go up in value and you always need a place to live
Quote:
Originally Posted by thefastlife
what's the best way to determine? i have little fixed expenses ($825 rent being the biggest) and no debt. i make around $75k year and have a $7k car to trade in. but i am EXTREMELY nervous about buying a new $27k car that i want/need.
is this a normal feeling? how will i/should i know i can actually afford it?
Save your money! Drive that 7K car as long as you can. Do some world travel now and then. Memories won't depreciate in value.
since i am considering a subaru forester, they keep their value incredibly well. depending on mileage/condition, i could probably sell it in 5 years for a decent amount.
Why would you get rid of the car when it's paid off?
Keep it 2-3 years longer and bank all the payment money you are now saving.
First off, I DO understand you desire for the all wheel/4 wheel drive "need". Otherwise, I'd admonish you and encourage you to keep the paid for Honda.
1} Those who mentioned "save for your future/emergency first, then buy" are on the right track.
2] he {or she} who mentioned saving the payment up for a few months is on the right track also, so you'd know after 6 months IF you can truly afford it.
3} If not, as mentioned, keep saving a "car payment" each month until you DO have the 20% cash down-in addition to your trade.
4} True, that the used Subarus-especially the Forester{I'm also looking at one{s}}- do retain value so unless you want a 4 year old model, you might as well spring the $24k or so for a brandy-spankin' new one
5} waiting the 6 months puts you into December, not really yet a bad snow month {I live NE}, so getting oe then will: a} be a good time to get one, b] get you a newer model than buying right now
6} on the other hand, dealers -only IF they have a herd of Foresters-will deal on the '15 models this time of year, you might score a deal!
7} lastly, AFTER YOU PUT AWAY FOR THE FUTURE, you say you make $75k a year...why not wait a year, save the $24K and pay cash outright? You'd have a then-worth trade of about $5, knocking it down to just $19k left to pay. Lets say you also waited the 6 months,and had put $350/m away, that's another $2100 towards a down payment. That means financing about $17k, roughly a $330/ month payment for 5 years {60 months} or about $400/m for 4 years {48 months}. If you can comfortably put away the $350 for the 6 months trial, and have checked to see what the SHOULD be able to afford the car. {{>Oh, and DON'T FORGET the taxes, tags, and dealer prep fees! Pay cash for them too...so put in about $4k cash down, not just the $2100 the $350/6/m will give you.<}}
8} AFTER you put away savings for retirement, and for 6-8 months GROSS salary for emergencies....WHY NOT just 'SAVE like mad' to PAY CASH for the car? I have only financed 2 vehicles ever in my life, both paid off early, the rest all I paid cash for. Nothing Like NOT having a payment! AND you talk about trading the Subaru in in 5 years? WHY, if it turns out to be a good car and suits your needs well, why not keep it to 10 years old? or 12 years old?
9} when looking at the Foresters on the lot, REALLY look at the "cheapest model" they have,. Will it suit your 'needs'??? Why buy a $31,000 model if the $22k model works well?? INSTANT $9K SAVINGS! Today's 'standard models' usually come with quite a few 'standard equipment' that in my early days of vehicle buying were EXPENSIVE options!
just some food for thought...
I wish you the best of luck however you decide to do it...
credit is tier 1, excellent. i try to save as much as i can but i don't budget all that well. i have about $20k saved up, a $8k car (paid off) to sell and put towards the new one, no student debt or loans of any kind.
i automatically contribute 8% to my 401k and 8% to my ROTH IRA. so a total of 16%.
Well, it's as good a time to start as any.
8% of your pre-tax 401k $75k is $6k -- the max allowed is $18k a year, take advantage of that if you can.
8% of your after-tax earnings for the ROTH is probably less than the $5500 a year limit.
Pay yourself first before paying a car dealer or a bank.
8% of your pre-tax 401k $75k is $6k -- the max allowed is $18k a year, take advantage of that if you can.
8% of your after-tax earnings for the ROTH is probably less than the $5500 a year limit.
Pay yourself first before paying a car dealer or a bank.
I agree with this I would be putting more into the 401k....possibly hitting the 18000 IRS limit if you can. Especially if you are unable to itemize on your taxes. While after tax contributions are great for beating the tax man in retirement it is important to ask yourself - Will I be in a higher tax bracket when I retire than I am now? If the answer is no then you might want to try and save on taxes now instead of later.
Last edited by wankel7; 07-10-2015 at 10:56 AM..
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You're renting? A home may be a better idea. It will go up in value and you always need a place to live
