Keeping with the current trend of saving and budgeting, do we understand what it means to save? I know a lot of people live “check to check” and think saving is impossible, but with hard work it is not. There is a saying, “the best way to double your money is to fold it over and put it back in your pocket”, this simply means just because, there is money in your pocket, does NOT mean it has to be spent. This comes in with attempting to “Keep up with the Jones” which is a problem that a lot of Americans have. If their neighbor has a new car, they feel like the older model car they are driving is not adequate, even though it goes from Point A to Point B with no issues. Let’s not forget the 3D TV that you felt like it was a must you buy, even though you have nothing to watch in 3D and really do not like it much.
So for fun let’s see how much money you are throwing away by purchasing a new car instead of keeping your current car. With a little research I found the average price of a new car is ~25K average monthly car payment is ~$300-$350, and interest rate of 4-6%, I will use these numbers to show how much money is spent over 6 years that could have been better used to help secure your future and make a stable foundation for your family.
So for fun let’s see how much money you are throwing away by purchasing a new car instead of keeping your current car. With a little research I found the average price of a new car is ~25K average monthly car payment is ~$300-$350, and interest rate of 4-6%, I will use these numbers to show how much money is spent over 6 years that could have been better used to help secure your future and make a stable foundation for your family.
A: the total amount you will have spent after interest is added.
Total amount of that “$25K” car is almost $32k and this does not even begin to include the cost of insurance for a new car, could be an extra $100 a month.
Dividing the $31,944 by 72 (12 months X 6 years), we see that the monthly payment would be $443.67.
If someone claims to be living “check to check", but wants to take on this amount of debt with little to no savings, they should now see it's best to NOT get the new car, but to deposit that amount of a car payment into some type of savings account. It will pay off in the long run.
Dividing the $31,944 by 72 (12 months X 6 years), we see that the monthly payment would be $443.67.
If someone claims to be living “check to check", but wants to take on this amount of debt with little to no savings, they should now see it's best to NOT get the new car, but to deposit that amount of a car payment into some type of savings account. It will pay off in the long run.