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05-16-2011, 02:47 PM
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New used car question
Right now I have just over $1,000 in extra cash each month that I put to reduce my debt. In three years I want to trade in my jeep grand cherokee for a gas saver should I save the 1k for a down payment on a car or continue to payoff my debt which is 10k?
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05-16-2011, 03:01 PM
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continue paying off debt and stop planning for taking new debt.
__________________
http://themoney101.blogspot.com/
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05-16-2011, 03:04 PM
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Do both. You have 10K in debt and have 1K/month to apply to it. That means in 10 months, the debt will be gone. You want to buy the car in 36 months. That still leaves you 26 months to save for the car which is way more than you'll need at 1K/month.
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Steve * Despite the high cost of living, it remains very popular. * Why should I pay for my daughter's education when she already knows everything? * There are no shortcuts to anywhere worth going.
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05-16-2011, 03:05 PM
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You don't have to put all 1000 into debt each month. Maybe 50/50 just a rough example, etc if you've already got an EF. Depends on how much debt/timeframe, and interest rate.
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05-16-2011, 04:28 PM
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I should have mentioned that right now I live with my parents so I have no real expenses besides gas insurance and the 10k debt but in September 2012 I will be getting married so I will be moving out so my exspenses will be going up so I won't have 1k a month to save or pay debt down but the 10k should be gone by then anyway.
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05-16-2011, 05:07 PM
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I would suggest putting together a longer term plan for figuring out what the best solution is. You mentioned your savings will decrease, but what about the effect of adding your spouse's income on your ability to pay off debt or save? Regardless, only by seeing where you are heading financially can you make the best decision today. Best of luck and congrats on getting married!
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05-16-2011, 05:09 PM
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Quote:
The debt will be gone in 10 months, so March 2012. Then you've got 5 months to set aside $5,000 toward the next car plus whatever you can save from September 2012 until May 2014. That should be plenty to buy a good used car.
__________________
Steve * Despite the high cost of living, it remains very popular. * Why should I pay for my daughter's education when she already knows everything? * There are no shortcuts to anywhere worth going.
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05-17-2011, 07:51 AM
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Get a car that would not jeopardize your normal spending and normal life. It should act as an incentive for living the lifestyle you have but should not be the cause of piling debts.
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