Quote:
Originally Posted by GoinAllTheWay
So here is a question I've been meaning to ask regarding large purchases like a car.
Several people have posted already how you need to budget based on what something costs total, not what it costs per month.
That's the biggest disconnect I've had with budgeting, how do you figure out how much of something you can afford without taking into consideration what impact that has on your monthly budget?
I realize you need to take term and interest into consideration. But with something like a car, I have no idea how much I could afford to take on without seeing how it impacts my monthly budget.
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Have you considered the idea of paying cash for a car?
Doing so makes things a lot simpler: No need to worry about interest rates, monthly costs, or the like. All you care about is the out-the-door price for the car.