The Proper Role of Cars in Our Spending
Now that you've digested all that, you can better understand why it's so difficult to answer the following question:
“I recently graduated from college and want to set up a budget. I'm trying to decide how much I can afford to buy a car. Do you have any rules of thumb?”
Well, no, unfortunately. There's really no good guideline for auto purchases, as there is for housing costs, which generally shouldn't exceed 25% of your gross income.
Some debt counselors suggest that you keep your total debt load to 35% to 40% of your gross income. (Most include housing costs in that figure, even if you're renting rather than paying a mortgage.)
The problem with that advice is that it focuses too much on monthly payments ...
Get Deal with Your Debt: The Right Way to Manage Your Bill$ and Pay Off What You Owe now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
