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My husband and I are in credit card debt but he wants to buy a new car. But we can't afford another bill till we can get out of debt. If everything goes by our plan, we shall get out of debt in 2 and half years. But it may take long if some other problems come up. Our car will not last till then, so we are savings more but it isn't enough to put down for the new car. We have money to clear all bills but the reminder isn't enough to pay for the car. I think we need to reconsider our budget. Please advice.

jerry · Posted: Thu Aug 03, 2006 2:32 am Post subject: RE: car budgeting

Hi,

Welcome to the forums.

If you go for a new car, there will be monthly payments on the car loan. But you don't get to save much after paying off the bills. If you include the car payment into the monthly budget, then you will have to use some of your credit cards for minor expenses. So your credit card balances will increase as long as you continue to make the car payments. Thus, your credit card payments each month will also go up. So I personally feel this is not the right time for you to buy a new car. I think it will be better if you accumulate enough cash and then go for the purchase.

Anyway, if you still feel that you need the new car, then you can request your creditor for a lower interest rate on the credit cards. Your creditor may agree provided you have been regular on all payments.

Thanks,

Jerry.

helping_user

Hi Jane,

I too feel buying a new car at present can lead you into financial trouble. But, if you still intend to go for it, then you should start budgeting for the car. I shall suggest that you lower either the rate or the account balance on the credit card.

To get a lower the rate on the credit card debt, try to transfer existing balance to a new card for which you will get the low rate. This will reduce your monthly payments on credit cards and let you save more for the car. With the extra money, you can either continue with the same payments on credit cards or else you can use it to repair your current car.

It's better to give a new look to your present car instead of buying a new one when you find it hard to afford. If you can avoid a car payment at present, then you will be able to save much more dollars for a new year after a few years. At the same time, you can avoid running a credit card balance.

Thanks

dcrum0 · Joined: 18 Feb 2008 Posts: 19 10.23 Dollars($)

Maybe you could try not buying a new car, but consider a nicer used car. You can save a lot of money buying a used car instead of a new one.

It might also be time to take up another part time job to help pay for the car or to finish paying off debt. I know your time is very valuable to you, but a little sacrifice now will pay off in the later years.

Posted: Fri Feb 22, 2008 6:51 pm Post subject:

I would buy the cheapest reliable car you can and payoff as much debt as you can with the savings. Then finish paying the remaining debt. After you are debtfree, you can save and pay cash for another car. I myself, am recently debtfree and am saving a car fund like a payment.

enriko · Joined: 05 Mar 2008 Posts: 67 0.07 Dollars($)

well, the way i see it is that you have to prioritize what is important to you.

Is it important to pay off debt as soon as possible or isomething else?
If you want to pay off debt as soon as possible then buy a cheap car, that is still reliable and pay off credit:0

Riko

dcrum0 · Joined: 18 Feb 2008 Posts: 19 10.23 Dollars($)

Just to throw a fun fact in here, did you hear about the guy who saved his pocket change for 13 years to buy a new truck? I'm not sure I buy the story because of the math. I wrote an article about it on my blog. It's cool to think about but not smart financially. He could have made a lot more money if he would have put it in the bank.

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