Financial advice for a 22 year old recent graduate, time to pull the trigger on my dream truck?

You seem to be doing ok. I give you permission to buy the new truck.

 

Lots of discriminators involved when buying a car, and having that factor into a life decision - I offer this:

Don't immediately fall into the 'College Graduate rebate' TRAP which most manufactures offer. Budget in your future home mortgage, property taxes, and home insurance before buying anything then decide. I'd say buy a 2015 Tacoma which has a good frame, and save the money that would be wasted on depreciation when buying new. Even consider buying a 2011 model, provided the frame is good. If the used Tacoma is only like $2000 off the sticker price for new, then buying new might make sense.

Definitely on the right path with saving away $18500 per year for your 401k . At 22, make sure you learn how many trades your permitted per month, and consider seeking financial advisor service which advises which funds to allocate those proceeds into, and when to perform trades. Go aggressive with your investing, but stay informed of the market and funds your in. Trade--based off data, not emotion--to keep most of your gains. One goal is to avoid 'needing' to put that extra $5k catch-up contribution into your 401k at age 50...if you 'need' to do it, its probably too late. You only get one life in the lifetime money saving game.

 

The theory sounds great but owning a home is a HIGE financial investment and 22 is very young to have that burden. If rent is $500/mo then he’s living pretty solid with expendable money. You also have to consider credit. If you have no debt, you have either no credit cards or no loans so possibly no credit history. That’s a huge issue when trying to buy a house.

 

True...500 a month would be un heard of here. Around here the rent is as much as a mortgage for a small apartment lol.

 

Couldn’t have said it better. I get your logic, I’m with you but it’s also nice to not have to worry about replacing a water heater, etc if things go wrong.

 

Beware of the used truck market. Sometimes new is best.

Would you buy this vehicle unknowing of its history?

 

id wait also or go for a 2nd gen since you want to drop so much on a down payment. instead of giving money to the bank each month you could do a mod every month! in no time youd have a 2nd gen that most 3rd gen owners would envy

 

Pure genius.....really.

 

Without a doubt, everyone’s road to independence in life and what comes with it is different. Surroundings will dictate the pace. They’re all opinions. If anything, “don’t sit in the waiting room.”

 

I would follow the rule of 3, in this case, the car you buy should be about 30% of your gross salary. In your case I wouldn't spend over $20k on a car. When I made about what you are now, I owned a Focus

 

This is incorrect thinking. History of debt (credit score) doesn’t determine net worth.

You can have zero credit score, no credit card history, and still buy a house. Manual underwriting is the method to do it.

Debt history doesn’t pay mortgages, money does. If you have the means, you have the means. Credit history or not. If you have no debt and $100k, you’re a hell of a lot less risk than someone with debt and $30k.

 

This is true, about the only difference will be your interest rate.

 

Even then, that could be a negligible difference.

 

Do it. I was in a similar situation. Had 3 internships before graduating and bought mine before graduation. You'll have no issues. Plus where do you even live that rent is only $500??

 

I'm 26 and I agree with others--buy a house. I waited on a brand new truck until a couple months ago, and although affording it isn't an issue, I still consider it to be my one irresponsible financial decision. It's nice having my new truck, but it's way more satisfying to finish working on something on the house or in the yard, look around, and think "this is mine". If I had the choice between keeping my truck and having an apartment or having a 200,000 mile Subaru and keeping the house, I'd pick the house every time.

 

Interesting way of putting it. Thanks for the input. From my experience, good credit is worth it’s weight in gold as long as you’re responsible with it. With that said, I’ve never tried to buy a house.

Cash in hand will always play a key roll, but having a good track record of paying of your debt with the money you have available is also very important.

 

Years ago, I would agree but not in today's world, banks and credit unions make money off interest. Credit Cards used to be difficult to get, there was a time when women weren't even allowed to have one. Now anyone can get one, anyone can get a loan from anywhere. Again the difference generally just the interest rate.

 

Just wanted to throw in my two cents after reading so many of the recommendations. First of all, you’re 22 and have 30k saved with a good paying job. You are obviously smart with money so we don’t even have to question your budget.

Don’t fall into the “you need to buy a house” trap. I bought a house at I think 24 after living in an apartment for a year. I sold the house after 18 months and moved back into an apartment and 2 years later am SO happy I made that decision. Renting for a few years in your 20s-30s or even longer isn’t alwAys a bad move especially while you’re still figuring your career and future family/relationship details out. Also, remember our generation (im 27) will NEVER see the ROI on our houses like the generations before us did, it’s not as huge of an investment as it was decades ago. With that said, if you WANT to buy a house, then by all means go for it!

Don’t feel that you need to put a huge down payment on a truck/car just to get low payments, especially if you can get a low % financing. If you buy something without putting much down and just take the higher payment you can try your best to make that work and still have that huge chunk in the bank to fall back on. And if you don’t need to tap into it, then you will eventually have a paid off truck AND $30k+.

Third, if your rent is only $500/month, cherish this time! I’m assuming your splitting that with roommates, or have a very cheap apartment, or just live somewhere that is on the cheaper side. Over the next few years I would think you will want to upgrade in some way, so don’t assume your monthly housing expense will stay that low!

I hope that is somewhat helpful, I’m sure you’ll make a good decision.

 

Buy a Tacoma it is the adult thing to do.

 

What if your rent changes at some point or you get a new job and want to rent closer? You need to add the what if’s into the picture because calculating everything exact is living dangerous. Leave a cushion amount for non essential spendings, fuel, insurance, changes in rent, potential layoff, and so on. Job security is key here because until you have experience in the field, the degree is the same as the next guys...experience sets you apart. Plan for worst case, not current situation so if God forbid things change, you’re not stressing.