When you think you're so smart by starting a new car fund category...

And your "good" car dies when you have $10 saved.

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  • Okay. You get a great big LIKE for demonstrating humour in the face of disaster, and a cyber {{hug}} for the sheer frustration I know you must be feeling.  What are you thinking of doing?

    Like 5
      • ClimbingOutOfDebt
      • I think I can I think I can
      • ClimbingOutOfdebt
      • 2 yrs ago
      • 4
      • Reported - view

      HappyDance Thanks, I needed that. I thought I would start by panicking, and follow that up some some fretting and then gnashing of teeth. Maybe later I'll start researching auto loan rates.

      Like 4
      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 2 yrs ago
      • 18
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      Marisahowardkarp 

      Start in your budget.  Always start in your budget. It will guide you with realistic numbers and cause you to make wiser decisions. Make it a math exercise. Be Vulcan.

      I financed a car purchase in 2015. I set my max transportation costs at 15% of take-home, and my max financing at 2 years to pay off.

      my monthly net income x 15% x 24 - 2.x.all.other.costs.annualized (insurance, fees, gas, maintenance) = maximum amount I was willing to finance.  By adding in some cash as a down payment, which I did, I was able to use the combination of cash and financing to buy a car I could use for many years.

      Using this example of a $4,000/month take-home

      • $4,000 x 15% = $600
      • $600 x 24 = $14,400
      • $2,500 x 2 = $5,000
      • maximum loan = $9,400
      • + funds for down payment = $9,400 + $__________ = this is the most I can buy at this time

      Then I amortized the loan over 4 years to obligate me to less in case I needed the wiggle room, but I paid that sucker off in 14 months. Now, debt-free, I budget $150/month towards my next car.

      Like 18
      • Jen
      • Budget Expert
      • Jen_c
      • 2 yrs ago
      • 1
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      HappyDance this is amazing advice!!

      Like 1
      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 2 yrs ago
      • 1
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      Jen 

      Thanks, Jen.  I find in casual conversation that most people think the interest rate is the big factor on car decisions. I came to the conclusion that it's the total amount of the car you choose to buy, and that a 5% loan on a used car was far better than a 0% loan on a new car because it fit in with my other goals and priorities AND I could get back out of debt the quickest.   (Aye-yi-yi, so many priorities!)  I also figured that running my budget through a few scenarios ahead of time was very helpful: if I couldn't trim enough to fit a 15% transportation figure into my budget, I had better adjust my expectations.

      Like 1
      • g.359
      • Gold_Boa_675fa61a67a7
      • 2 yrs ago
      • 1
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      HappyDance I agree that you are giving amazing advice. I even started following you so that I could keep up on more of your advice! 

      Like 1
    • MsTJ
    • YNAB has given me back my future
    • Believer_in_YNAb
    • 2 yrs ago
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    So very sorry to hear you only had $10 saved.  Best of luck finding a great, inexpensive replacement.

    That is the thing I've learned in my last few years of budgeting.  When I started, and was pay check to pay check, having that $1,000 emergency savings seemed huge.  Today, I know things can break that cost lots more.  That $1K is just for starters.  The more I have saved, the better shape I'm in.  I've had several occasions when what I thought was "lots" turned out to be "not enough."  

    Sure hope this is not a major reminder to save more.

    Like 2
  • I feel you!  My wife's car died the day before Thanksgiving.  We had recently set a goal for buying a car at the end of summer 2018.  $178 in the car fund so far.  

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