Pay down current car and trade in or use cash as down payment?

You must make an @$$ ton of money.

 

I'm trying g to work into my head how you could work that much to afford the the truck AND two degrees with no debt.

Just seems unrealistic to me. Also I'm sure working that much at 14 years old is illegal.

 

I had a 08 dclb 4x4 sport with 135 on the od. I got 13k for it from the dealer on a trade in

 

No I don’t.
I just don’t have payments so all the money I make is mine to do what I want with.

Average car payment in the US is right around $500/mo. Average creditcard payment is about $200/mo.

$700 extra bucks a month on average I don’t have to spend and it’s mine to invest or save for car replacement or just spend.

That’s a really nice chunk of change. That goes a long way for the average person.

Scholarships and working for the University. Goes a long way to making the tuition cost affordable.

I didn’t say I worked 60-80 hours a week at 14. I only did that for the Taco in grad school.
I have been working since I was 14 and saving.

Having roommates goes a long way in reducing living costs.
I’ve been married my whole adult life so the double income helps.
Live on a strict and frugal budget and you’d be shocked at how much money you make but don’t get to enjoy.

I don’t have cable.
My thermostat is set to 60 in the winter, 76 in the summer.
My husband had to twist my arm to put internet in (I have the cheapest version lol)
I have an older phone with no unlimited plan.
I recycle my own stuff so I don’t have to pay for it.
I go out to eat twice a month maybe.
Pack my lunch everyday.
I do all my own home improvement.
I don’t buy new cars.

Small things make big things.


It’s all doable. Debt is what cripples you and makes it seem like you can’t get ahead.

Figure your budget with zero debt payments except for mortgate or rent.
I promise you’ll be impressed. If you had all that money its like you got a raise but don’t make any more.

 

For some odd reason, I want to be mad at you...but I can't because all that is 100% true, and I envy you! I wish I would of done a better job at not getting any debt, but I'm not too bad off. If I were to cut costs and pay attention to what I do with my money, the debt would go down faster lol but I also have a lot of special needs animals that get a little costly

 

You would be shocked what you can accomplish with serious focus and dedication.
At first its hard... but then its easy when you see the reward.
Like even if I had a fully paid off house and I maxed out my retirement savings... I doubt I’ll ever have it in me to pay for a brand new car. Lol Being a cheap ass is part of who I am now.

Do some people get themselves in holes its hard to get out of? Yes.
Is it ever impossible? No.

You can do it and still keep your animals.

 

Yea doing all of that would be pretty difficult for me. Good on ya.

 

For the record i was never whining about the man getting me down. All of my decisions, good and bad, are on me. Sounds like we just live our lives differently...and thats ok.

OP im sorry to derail your post.

 

The number one mistake I see people making is not tracking where their money goes and my prevailing theory is that they know they spend too much and prefer to lie to themselves and hide it. Because if you actually look at what you are spending on crap, you will hate yourself and vomit. Its like facing reality, a hard truth.

I made a command decision to incorporate Quicken into my life. I loaded my data up and the previous month I had spent more than I made. Obviously thats not going to work.

I made myself face reality. I started not buying crap because it would show up in my spending and ruin my budget. Do I need that $20 thing? Nope. I remember my brother saying I should get Google Fiber gigabit internet for $70. They also have 100MB for $50. What do you think I did? I doubt I could tell the difference in speed, but in a year I have $240 more.

Quicken also makes it easy to rack up credit card rewards. If you load your credit card into it, purchases count as a negative balance so your total cash goes down for the purchase. Simple. When I pay my bill nothing changes so I don't even feel it. Pay it in full and no interest ever. Cash balance stays the same. Credit card companies pay for my Christmas gifts for my family each year. Thanks guys.

3 years later after starting this, I'm guying a house. 2 years after that and I have enough cash to buy my truck outright. Instead I chose 1.9% and sit on my cash also earning 1.9%. Compound on it vs. simple on car loan and I win. Not to mention other cash in investments. Rainy day fund needs to be risk free and liquid in my opinion. Seems that a likely time to need a rainy day fund might be during a recession when your investments are worth less.

I think the number one mistake that needs to be mitigated is the whole "as long as my account stays over $x,xxx, I'm ok." Well you might be, but how is it ever going to grow with that plan? It won't.

I'm successfully a cheap ass.

 

Words of truth.

If you want a raise, do a dollar to dollar budget. You’ll realize what bullshit you waste money on, you’ll stop and TA DA a nice raise.

Eating out is probably most peoples number one drain. Hundreds of dollars a month if you do it regularly.

People at the office make fun of me for bringing my lunch in daily. Uh... I can’t afford not to.

Anyways OP. Keep the Camryor get a used 2nd Gen. 2nd Gens are better anyways

 

There is no correlation between what you owe on a loan and what the vehicle is worth in the trade in market. Based just on this, you shouldn't be taking on more debt until you educate yourself a little bit. Maybe one of those personal finances for dummy's books (I've read some, they are very helpful).

Pay down this car, keep socking away money into a savings account, and if you really need to scratch some itch, go buy an inexpensive mountain bike (~$1k?) to take the edge off wanting a truck or something.

 

I think it is all about perspective. I have am a millionaire, but not because someone gave it to me or I won the lottery. When I was 20 I had my one and only check bounce because I didn't have enough money to cover my books. After buying my first car an 89 Jeep wrangler when I was 22 I realized that I needed to be smarter. I had no credit and little for a down payment, but badly wanted that Jeep. I paid way too much and got an interest rate somewhere around 9%. After taking a hard look at where my money was going, I realized that I was really throwing money away. Got rid of the Wrangler for a CRX and focused on paying down the debt.

I focused on minimizing my debt and paying cash for what I could. It wasn't easy and totally understand the 20 year old mind of wanting everything, but this is a marathon and not a sprint. It is a cruel game that the temptation of debt drags you in and it is hard to get out, but when you do, the exact opposite happens. You find that because you don't want money, everyone is willing to practically give it to you. When I bought my Tacoma I planned on paying cash. Because of my credit score they offered 0% financing. Now I could have just ignored it, but why not take free money? So that money that was to be used for the expense is now working for me in other investments. That $30K will now be paying me the interest.

It is funny now when I see that guy that bought the brand new Camaro that made fun of me for my CRX with 200k miles and he lives in a small house with some beat up cars out front. Roles have been reversed and that pain I suffered in my 20s which sucked beyond belief then is probably nothing compared to being saddled with debt and father time knocking on your door. It is hard to understand in your 20s that the stress of live is exponentially increased as you get older.

My personal suggestion for anyone in the OPs situation is to pay your credit card off every month. That alone will provide more benefit your financial future. Finance only necessities. You shouldn't finance a dinner at Olive Garden.

 

Line one is redundant ;-)

 

I support this post 100%

 

What? If you traded in a vehicle with equity then why would you waste money on GAP insurance?

 

If you're purchasing gap insurance, that's a pretty good indicator you're buying a vehicle that's more expensive than what you can afford.

 

This mentality, and the fed interest policy that enables it, are the primary reasons why cars ,and any other products usually purchased with financing, are so f’ning expensive.

life is not short. we live longer than most animals on earth. Bad financial decisions permanently impact your life.

If a 40k car is more than half of ones annual income, then one can’t afford it period.

 

Describe to me how making a $500 dollar payment is different than saving $500 dollars. Your budget is impacted by $500 either way.

If it's within your budget, it's affordable.

I could have bought my truck twice over with cash, but I financed with a super low rate and used the cash as a down payment when I bought a home.

 

My point is that cash savings can be a lot more useful than a paid off vehicle if you had to choose between them.