A young woman writes about the personal finance lessons she had to learn after moving out of her family home until she was Q: Credit card coverage — or not!
A: I usually rely on the collision-damage coverage offered by my credit card. I had to file documentation to an insurance adjuster, but the claim was paid quickly and without issue.
Do you have a question for me? Send it my way. Questions and answers are edited for length and clarity. More Carrick and money coverage For more money stories, follow me on Instagram and Twitter , and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group. It might seem obvious, but the first step to figuring out how much you can spend on your new car is to calculate your monthly budget.
Add up all your monthly income, subtract expenses everything from rent or mortgage payments to food and healthcare , and see how much is left. For your benefit, the Federal Trade Commission even offers a sample budget sheet online. But don't dedicate every last penny of disposable income to a car. Instead, experts have developed some guiding rules for how much is reasonable to spend.
But those figures aren't realistic for today's shoppers. In part that's because car loans last much longer: In March , the average auto loan surpassed 70 months, according to Edmunds research. If you're not looking at a fancy SUV or pickup truck, that's generally a good number when shopping for more affordable new cars. However, it's important to note that you're responsible for more than just the car payment.
Factor in insurance costs, too, when figuring out your total monthly car expenditure. For this reason, many advisers instead recommend setting a limit for how much your total car expenses will be per month.
That can be an especially important rule for buyers who already have other debts. Your monthly payment can vary significantly depending on your credit score, the length of your loan and the size of your down payment. Your American Family agent can help you build a policy that fits your budget best. Related Topics: Finance. Protecting your identity and personal information from identity ID theft is crucial.
Learn more about our 11 best ways to protect yourself from identity theft. Money Matters. Take Control of What You Pay for Auto Insurance With deductible credit earned through Diminishing Deductible, American Family helps you put more money back in your pocket by lowering your out-of-pocket claims cost.
Who can afford a new car? Can I afford a new car? Have You Seen Our Discounts? How would you rate this article? Ready For a Quote? ZIP Code is required. You might consider getting some nice driving shoes, for example, or a matching chronometer watch for your sports vehicle. Deep down, you know that if you're not able to pay cash for your car, then you really can't afford it at all. As time went by, it became clear that I was only getting poorer, not richer.
I also regretted not prioritizing more important things, like saving for retirement or for my kid's college tuition. Knowing that I wasn't making any money off the car was truly an unpleasant feeling. Source: Edmunds. Nobody is perfect, and the important thing is that you recognize your mistake and fix it right away.
This is the simplest solution if you've spent too much. Another option is to just bite the bullet and sell your car. Tip: Try selling it through a free online service. Once you sell your car, you can use the proceeds to build passive income.
Below are just a few options, depending on your annual income:. Taking positive steps — big or small — toward improving your income and wealth is always a huge accomplishment.
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