Dave Ramsey Says ‘Drive Free, Retire Rich’ ∞ Get Rich Slowly
I guess most of us reach a stage where getting a car to get around seems necessary. I’ve also been hit by the bug (tiny way) since am running around for meetings a lot more but then when I do the finances, it seems rather silly to pay 3.5% interest of a car finance loan when we still have a house loan (with a concessionary rate of 2.6%) to pay off?
Seeing as how my preferred car would be the Honda Civic, that would mean a loan of at least $65k at a repayment of $731/month for 10 years at 3.5% (Total interest paid of about $22k!). The good thing is I abhor debt so there goes the plan to get a new Civic.
Drive Free, Retire Rich explores the impact of carrying a car payment, and offers ideas on how your money can be used more wisely.
Source: Dave Ramsey Says ‘Drive Free, Retire Rich’ ∞ Get Rich Slowly
Link : Drive Free, Retire Rich
So what’s the other way I can get around without relying on public transport? Looking at the article referenced by Get Rich Slowly, Dave Ramsey offers a novel approach to car purchase. By investing the amount intended for a car, one can save on interest payments until such a time the amount saved can pay for a car entirely! And by keeping up these payments to oneself, the interest earned could potentially fund future car purchases. Seems rather interesting concept but than also means having to squeeze out $731 to invest. Time to do some math!
Budgeting work sheets: Emergency fund work sheet
Have always thought that a good estimate on how much to save in an emergency fund would be along the lines of 3 x monthly salary. The link below takes a little step futher by detailing the needs per month and coming up with a more reasonable figure. Guess its always a good idea to be prepared!
My emergency fund requirements
Mortgage/rent for one month ________ x 3 = $___________
Auto loan for one month ________ x 3 = $___________
Utilities for one month ________ x 3 = $___________
Transportation for one month ______ x 3 = $___________
Groceries for one month ________ x 3 = $___________
Other debts for one month _______ x 3 = $___________
Total amount for emergency savings account = $___________