Your car costs half as much as your annual income
Cars. They can be a huge financial drain. I know. I literally wasted so much money in my 20’s on car problems. I personally decided to buy a brand new Toyota Camry 6 years ago and I honestly am so happy with my decision. I got 0% interest due to a promotion and also got a few additional discounts as well which made it worth it financially for me. 6 years later and the only major repairs I’ve done were the breaks (which my friend did for me!) & new tires.
I have wasted thousands of dollars on repairing vehicles in the past because I kept getting crappy cars in my 20’s. I know a lot of financial gurus recommend a cheap car while paying off debt, but I honestly don’t think it is worth it. However, if your car is a huge financial drain then you might want to consider selling it, getting a beater for a year or two so you can get out debt and then buying a more reasonably priced vehicle.
Solution: What I do believe is worth it is to get a car that is really affordable to repair in case something goes wrong with it, one that has low mileage and also is an affordable price. If you have to get a car loan be sure to get a loan that you can pay off in 3 years max (yes I paid my car off 3.5 years).
Also do everything you can to get the lowest price and the lowest interest payment. If you have to, fix your credit score while paying off the car and refinance for a lower interest rate. Under no circumstances should you finance a loan that will take you 5-6 years to pay off, and that costs half of what you make a year!
The car will only end up being a financial drain over time so be very wise (and not impulsive) when purchasing a vehicle. If anything, get a slightly used vehicle with a trusted brand. Do a lot of research ahead of time and know what your limits are before you talk to a car salesman.
And please do not buy a car every few years! Your goal should be to buy a car, pay it off as soon as possible, and keep it for at least 10 years!
Such great tips! So many people struggle with this and creating a budget. This post is so helpful.
Hi Kyrie,
So glad that you found it to be helpful 🙂
Kylie
Yesss such a good reminder to be aware! Budgeting makes me feel restricted, but you’re right, it’s vital!
Hi Danae,
Yes it can feel restricted, but at the same time you can budget in your fun so that you can still enjoy life 🙂
Kylie
Great post: some of these we all know but it’s good to hear reminders. Also, it’s inspiring to hear you paid off $110,000! Wow!
Paige Bainbridge, http://www.paigebainbridge.com
Paige,
Thank you! Yes it is always nice to have reminders 🙂
Kylie
This is really great information to help persons get rid of debt
Anthea,
Thank you so much!
Kylie
Thank you for writing this. It’s such a sad reality of America that debt is a part of our lives. I struggle with budgeting and I sometimes do live beyond my means. I’m trying to actively track my expenses, cut back where I can and lessen my debt to income ratio.
Hi Yoli,
I totally agree that most Americans have debt as a part of their daily life. I think that is great that you are trying to work on your budget! One day at a time 🙂
Kylie
YES YES YES to every single one of these!!!!! We have been on our debt-free journey since November and this is exactly how we follow everything.
Mellisa,
That is great! Keep up the good work 🙂
Glad you enjoyed the post!
Kylie
Thanks for your posting. I would like to say this that the very first thing you will need to conduct is determine if you really need credit score improvement. To do that you must get your hands on a replica of your credit file. That should not be difficult, considering that the government mandates that you are allowed to acquire one absolutely free copy of your credit report every year. You just have to request the right people today. You can either find out from the website for your Federal Trade Commission as well as contact one of the leading credit agencies specifically.