Credit Basics
Here we breakdown the basics on credit.
Budgeting For Your New Car
You want a car, but how much can you really afford? The only way to know is to figure out a monthly budget.
Do the math
Start with knowing your regular monthly take-home income.
Next, list all of your monthly expenses: rent, food, utilities, student loans, cell phone and entertainment (like that daily cappuccino!). Be as thorough as possible and most importantly, budget for savings, too.
Add up all those expenses and subtract the total from your monthly take-home income. If you have accurately accounted for all expenses, the balance is about what you can spend per month on a car. Keep in mind though, besides the loan or lease payment there are other expenses associated with owning a car. A car budget must also cover:
- Gas
- Car insurance
- Maintenance
- Repairs
- Parking
- Annual fees (for example license, registration)
Sample Budget
MONTHLY TAKE-HOME INCOME |
________________ | |
MONTHLY EXPENSES |
______________ | |
Rent/Mortgage |
______________ | |
Utilities |
______________ | |
Food/Clothing |
______________ | |
Loans(e.g. student) |
______________ | |
Cell phone |
______________ | |
Credit Cards |
______________ | |
Entertainment |
______________ | |
Savings |
______________ | |
TOTAL EXPENSES |
minus | (________________) |
| ______________ | ||
CAR COSTS |
______________ | |
GAS |
______________ | |
CAR INSURANCE |
______________ | |
MAINTENANCE/REPAIRS |
______________ | |
Parking/Annual Fees |
______________ | |
TOTAL CAR COSTS |
minus | (_________________) |
TOTAL MAXIMUM CAR BUDGET |
__________________ |
Okay, now that you know what you can afford, also remember to look at the total cost of the vehicle including financing. Time for the fun stuff - car shopping!
More Credit Education
Dealership Experience
What you need to know before you go.
After You Sign
Tips for managing your account and lease end.