I'm 22 years old and I need help.

[GraysonH]

I need ideas!

I make a little under $60,000 a year (pretax) and my car is paid off. But I would like to upgrade my vehicle in the next 2 to 3 years since it is the same vehicle I've had since high school. I currently have around $15,000 in investments and $5,000 in savings. I'm stuck at this current moment and need suggestions on what I should be doing with my income that will help me prosper. PLEASE HELP!

Thank you

[bjl584]

The standard advice you are going to get here is:

1) Buy s used car not a new one.
2) Pash cash for your car.
3) If you must finance, take out no more than a 3 yr loan with a payment not more than 10% of your monthly take home pay

[artwest]

You do not state how much debt you have.

The best way to prosper is to be debt free. Pay off your debt, build a 3-6 month emergency fund and then invest for retirement.

As far as upgrading your car, I would suggest putting a "car payment" in your budget. This is not a real car payment, it is a payment to yourself. For example, have $50 per week from your check to go into a savings account for a car. At that rate, you will be accumulating $2,600 per year for another car. Every 4 years you will have $10,400 plus the trade in value of your current car to get another used car. Always buy used cars (unless you are a millionaire) and pay cash for them.

[BMEPhDinCO]

Welcome.

Can you list out your expenses and your budget? Where do you live (general, ie, CA is much more expensive usually than ND) and what other plans do you have (ie grad school, marriage, house)?

With $5k in your savings, that's a good amount for an emergency fund - try directing your savings towards other goals, including the car. If you want a car in 3 years, for example, and you can trade in your current one for $3k, then a good, 1-2 year old car, would cost around $15-17k and thus you'd need $12-$14k saved for the car.

In 36 months, you'd have to save $333 - $388 per month. I'd round that up to $400, even newer cars have additional expenses.

So yeah, if the advice above doesn't help enough, list your budget and we can help you more!

[mrpaseo]

Read this page, watch the video...

Drive Free, Retire Rich - daveramsey.com

Ray

[Nobulladvisor]

Is there something wrong with you car now?

What car are you planning on getting? Model Make Year.

and why do you want a new car?

Is there your first job?

how long do you plan on staying in this job?

Do you have any debt?

How did you save the $20,000 you have now?

[snafu]

Kudos to you for seeking advice and being aware of the need to plan. At 22 it helps to have a long term plan with some do-able goals that are measurable. Besides buying another car, what life goals do you anticipate like marriage, children, home ownership etc? What income do you anticipate by 2016? What do you expect your portfolio to be valued in 5 years?

Can you breakdown your income into 20% savings/investment, 50% spent on 'needs,' no more than 30% spent on 'wants?' Notice you are paying yourself 1st with savings which includes retirement taking advantage of any employer matching sums [free money].

[SeW50]

Seeing as you are only 22 years old and already have over $20,000 in capital, you are doing pretty well.

One option I would suggest (and what I would personally do) as you'll be upgrading your car in 2-3 years, that means that you have plenty of time to start saving money (in a separate "car budget") so that when the time comes, you'll have enough money to buy a lower-end model in cash (perhaps a Hyundai, seems like they offer the best reliability for the least amount of money).

And in a bad case scenario, you are still going to have over 50-80% of the price of the vehicle saved, so even if you get a small-sized loan, you'll be able to pay it up easily.

The other recommendation is to start earning more money with a side job or something similar, there are numerous possibilities both offline and online (freelancing, doing creative work, etc.) available.

[Kooshiball]

If you want to prosper, then buying the new car is not the way. If you must buy a car, then you should buy used car (If you don't have to, then I suggest you do not...). If you think about long term picture or goal, I would like to ask "where you want to be financially in short term (1 year), medium term (5 years) and long term (10 years). If you think about these financial goals, do you really need to own the new car? In my thinking, you can buy very expensive car or toys after you become prosper. So, I would suggest to invest in your financial education to learn how to invest. Then, investing your money to grow more money (Money making money). Once enough money coming into your pocket without working, then you can buy anything you want to. That's the path I suggest if you really want to prosper. Most people are struggling because they are taking huge debt buying fancy cars or other liabilities that they don't really needs for a moment. You seem to be debt free and with sizable portion of investment and saving for 22 year old (That's great!). So, don't make mistake that most people make! Good luck!

[jadet]

Originally Posted by GraysonH

I need ideas!

I make a little under $60,000 a year (pretax) and my car is paid off. But I would like to upgrade my vehicle in the next 2 to 3 years since it is the same vehicle I've had since high school. I currently have around $15,000 in investments and $5,000 in savings. I'm stuck at this current moment and need suggestions on what I should be doing with my income that will help me prosper. PLEASE HELP!

Thank you

I would suggest buying a used car. If you're looking to be flashy buying a used luxury vehicle will save you a bundle.

If you're set on getting a new car get something that is efficient, reliable, cheap on insurance and retains its value. IE: Honda Fit

[bjl584]

Originally Posted by jadet

I would suggest buying a used car. If you're looking to be flashy buying a used luxury vehicle will save you a bundle.

If you're set on getting a new car get something that is efficient, reliable, cheap on insurance and retains its value. IE: Honda Fit

Careful with luxury vehicles. Cost of ownership is typically higher on these. Brakes, tires, and other routine services can be a lot more than other cars. Insurance is usually higher too.

[wowitsawonderfullife]

Do some research on when to buy a car during the calendar year. There are certain times (end of the month, end of the year, when the newer models come in) that can save you a lot of money. In my case I was able to buy a new car for the same price as a used one due to timing.