So let's say you owned two cars - one worth about $5000 and one worth about $15000. You had the intention to sell both of them in order to put $20000 towards a new vehicle between $20k and $30k. Doing this would lead to between a $0 and $150 per month payment for 60 months.
Now, you're also $15000 away from having your emergency savings full. You put $1200/month towards this savings already.
So my question, would you take the $15000 you potentially make from selling one car and put it in your emergency savings so that's full and accept a substantially larger monthly payment for a new car due to the lower down payment of $5k or maybe a little more? Doing this would allow you to put a little less money towards emergency savings per month. Or do you use all of the entire $20k towards a new car for the lower monthly payment (or possibly no payment) while still putting away $1200/month knowing that it'll still be about a year before you reach your emergency savings account goal?
No need for responses about not buying a new car, I'm only interested in the scenario mentioned above.
Bonus: You start contributing to your 401k in less than three months if you fill your emergency savings immediately (company doesn't match till after one year of employment - substantial 401k value already exists but is not currently being contributed to). Otherwise, it's possible you don't contribute to your 401k until after your emergency savings is full in about a year.
Thoughts?
Now, you're also $15000 away from having your emergency savings full. You put $1200/month towards this savings already.
So my question, would you take the $15000 you potentially make from selling one car and put it in your emergency savings so that's full and accept a substantially larger monthly payment for a new car due to the lower down payment of $5k or maybe a little more? Doing this would allow you to put a little less money towards emergency savings per month. Or do you use all of the entire $20k towards a new car for the lower monthly payment (or possibly no payment) while still putting away $1200/month knowing that it'll still be about a year before you reach your emergency savings account goal?
No need for responses about not buying a new car, I'm only interested in the scenario mentioned above.
Bonus: You start contributing to your 401k in less than three months if you fill your emergency savings immediately (company doesn't match till after one year of employment - substantial 401k value already exists but is not currently being contributed to). Otherwise, it's possible you don't contribute to your 401k until after your emergency savings is full in about a year.
Thoughts?
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