Hi Money Minder,
Hey there, we’ve got a situation here. My wife is on the verge of buying a new car. We could either go all in and use up all our savings after her trade-in, not put anything down besides the trade-in, or find a middle ground. What’s the best move?
We’re sitting on around $150k in debt, mainly from student loans and my truck. But hey, we do have a sweet $35k bonus on the way. Our combined income is roughly $220k a year, and we’re aiming to be debt-free by next summer, including this new car of hers.
We’ve got $28k in savings, emergency fund included, and the car she wants is $40k. So, what’s the game plan here, Money Minder?
Farewell from the Debt Dilemma Duo!
Response from THE MONEY MINDER:
Hello There,
Hey there,
It sounds like you’re facing a decision that requires careful consideration. Given your current financial situation, it would be advisable to avoid draining your savings entirely to purchase the new car. It’s great that you’re aiming to have your debts paid off by next summer, and putting a substantial down payment on the car might delay this goal.
Considering that you have a significant amount of debt and a bonus coming in soon, it might be wise to use a portion of the bonus towards the car purchase. Additionally, you could use a portion of your savings for a down payment, while keeping a comfortable amount in your emergency fund. This approach would allow you to maintain a healthy balance between paying off debt, saving, and making the car purchase.
Based on your financial goals, it would be prudent to strike a balance between making a down payment that feels manageable and not compromising your debt repayment plans. By utilizing a portion of your bonus and savings for the car purchase, you can work towards achieving your financial targets while also meeting your immediate needs.
All the best from THE MONEY MINDER.
