Car Buying: Do as I Say, Not as I do (PLEASE)
This content is provided courtesy of USAA.
By J.J. Montanaro, CERTIFIED FINANCIAL PLANNER™
You've heard of the cobbler with holes in the bottom of his shoes or the plumber with leaky pipes, right? How about the financial planner with the atrocious car-buying record? As I've noted here before, that would be me. I won't bore you with all the details (they wouldn't fit in this small space and would evoke more pain than I can endure at this moment), but rest assured I'm writing this piece as part of my own personal healing process in the hope I'll do better in the future. As the old saying goes (without the "please"), "Do as I say, not as I do (please). It's for your own good."
Going with what makes sense. Buy what you can afford. Roughly 10% of your gross pay should be dedicated to transportation. I realize that everyone's different and the numbers change based on income level. However, what should be similar is that you should be buying transportation that fits into your budget, a budget that includes eliminating debt, saving for emergencies and putting away money for longer term goals like retirement.