Anyone willing to evaluate my budget before C7 purchase?
05-11-2016, 06:10 PM
#41
Intermediate
You're young. You seem to be on the right track, have your stuff together and have a good head on your shoulders. That's a great thing to have at your age.
I'd focus on paying your debt off, also focus on your career growth. As tempting as it maybe at this time to purchase a C7, and enjoy the hell out of it, with a little time and planning, the enjoyment of a brand new Corvette down the road will be better enjoyed.
Sometimes making big purchases for flashy toys at a young age can detract a young person from focusing on greater goals. I've seen many people derail their personal and professional growth because they overextended themselves financially, and found themselves in a situation where they became dependent on that paycheck, which in turned trapped them from making changes and progressing their career because career growth will require risk, and willingness to make moves. If you become dependent on the paycheck, the probability of you taking risks to move forward are less likely. You become stuck.
I'm 37 years old, bought my first brand new Vette in 2014. I've wanted a Corvette since I was 13 years old, so much so, I took a busboy job at the age of 13 earning $2 an hour plus tips, saved every dime until I turned 16 years old when I approach my uncle who saved me his 1977 black Corvette that he promised he hold on too, for me to buy if I was willing and able to come up with 7 grand cash. The car a sentimental value to me, as it was the car my Uncle would drive me around the block in when I was 4 years old. I was in love with the car. My whole life was that Corvette, I dreamt of it, I would visit my uncle weekly, and would sit in the car in the garage and daydream that one day I would drive it & own it. Unfortunately, I never was able to purchase the Vette, my father stepped in and denied me that opportunity when the time came when was ready to deliver the 7 grand cash I had stashed in a shoe box (True story).
I took the money I saved and applied it to art school after I graduated high school and started a career as a creative designer. My first job out of art school paid me $10/ hr.
I've worked hard over the past 20+ years by improving my skill sets, and taking RISKS in my career along the way to advance my financial earnings, and I did so because I maintained a simplistic lifestyle, saved my money and was debt free. Save to say, today I'm a Sr. marketing exec for a technology business, I earn well over six figures annually, and my enjoyment today being able to drive a new Corvette, far exceeds the fun I would have had temporarily at the age of 16.
Sometimes it's better to wait.
I hope you understand my point of view.
When I see someone like you, I see the potential. I guess if the purchase of the new Corvette doesn't at all detract you from personal and professional growth then I'm ok with it.
But if you play your cards right, at some point later in your career, you'll be in such a better position to get what you want, and have a better enjoyment factor to boot.
I'd focus on paying your debt off, also focus on your career growth. As tempting as it maybe at this time to purchase a C7, and enjoy the hell out of it, with a little time and planning, the enjoyment of a brand new Corvette down the road will be better enjoyed.
Sometimes making big purchases for flashy toys at a young age can detract a young person from focusing on greater goals. I've seen many people derail their personal and professional growth because they overextended themselves financially, and found themselves in a situation where they became dependent on that paycheck, which in turned trapped them from making changes and progressing their career because career growth will require risk, and willingness to make moves. If you become dependent on the paycheck, the probability of you taking risks to move forward are less likely. You become stuck.
I'm 37 years old, bought my first brand new Vette in 2014. I've wanted a Corvette since I was 13 years old, so much so, I took a busboy job at the age of 13 earning $2 an hour plus tips, saved every dime until I turned 16 years old when I approach my uncle who saved me his 1977 black Corvette that he promised he hold on too, for me to buy if I was willing and able to come up with 7 grand cash. The car a sentimental value to me, as it was the car my Uncle would drive me around the block in when I was 4 years old. I was in love with the car. My whole life was that Corvette, I dreamt of it, I would visit my uncle weekly, and would sit in the car in the garage and daydream that one day I would drive it & own it. Unfortunately, I never was able to purchase the Vette, my father stepped in and denied me that opportunity when the time came when was ready to deliver the 7 grand cash I had stashed in a shoe box (True story).
I took the money I saved and applied it to art school after I graduated high school and started a career as a creative designer. My first job out of art school paid me $10/ hr.
I've worked hard over the past 20+ years by improving my skill sets, and taking RISKS in my career along the way to advance my financial earnings, and I did so because I maintained a simplistic lifestyle, saved my money and was debt free. Save to say, today I'm a Sr. marketing exec for a technology business, I earn well over six figures annually, and my enjoyment today being able to drive a new Corvette, far exceeds the fun I would have had temporarily at the age of 16.
Sometimes it's better to wait.
I hope you understand my point of view.
When I see someone like you, I see the potential. I guess if the purchase of the new Corvette doesn't at all detract you from personal and professional growth then I'm ok with it.
But if you play your cards right, at some point later in your career, you'll be in such a better position to get what you want, and have a better enjoyment factor to boot.
05-11-2016, 06:22 PM
#42
Team Owner
Financially and intellectually you seem to have it together, I say get your new C7 and enjoy.
05-11-2016, 06:27 PM
#43
Advanced
Thread Starter
You're young. You seem to be on the right track, have your stuff together and have a good head on your shoulders. That's a great thing to have at your age.
I'd focus on paying your debt off, also focus on your career growth. As tempting as it maybe at this time to purchase a C7, and enjoy the hell out of it, with a little time and planning, the enjoyment of a brand new Corvette down the road will be better enjoyed.
Sometimes making big purchases for flashy toys at a young age can detract a young person from focusing on greater goals. I've seen many people derail their personal and professional growth because they overextended themselves financially, and found themselves in a situation where they became dependent on that paycheck, which in turned trapped them from making changes and progressing their career because career growth will require risk, and willingness to make moves. If you become dependent on the paycheck, the probability of you taking risks to move forward are less likely. You become stuck.
I'm 37 years old, bought my first brand new Vette in 2014. I've wanted a Corvette since I was 13 years old, so much so, I took a busboy job at the age of 13 earning $2 an hour plus tips, saved every dime until I turned 16 years old when I approach my uncle who saved me his 1977 black Corvette that he promised he hold on too, for me to buy if I was willing and able to come up with 7 grand cash. The car a sentimental value to me, as it was the car my Uncle would drive me around the block in when I was 4 years old. I was in love with the car. My whole life was that Corvette, I dreamt of it, I would visit my uncle weekly, and would sit in the car in the garage and daydream that one day I would drive it & own it. Unfortunately, I never was able to purchase the Vette, my father stepped in and denied me that opportunity when the time came when was ready to deliver the 7 grand cash I had stashed in a shoe box (True story).
I took the money I saved and applied it to art school after I graduated high school and started a career as a creative designer. My first job out of art school paid me $10/ hr.
I've worked hard over the past 20+ years by improving my skill sets, and taking RISKS in my career along the way to advance my financial earnings, and I did so because I maintained a simplistic lifestyle, saved my money and was debt free. Save to say, today I'm a Sr. marketing exec for a technology business, I earn well over six figures annually, and my enjoyment today being able to drive a new Corvette, far exceeds the fun I would have had temporarily at the age of 16.
Sometimes it's better to wait.
I hope you understand my point of view.
When I see someone like you, I see the potential. I guess if the purchase of the new Corvette doesn't at all detract you from personal and professional growth then I'm ok with it.
But if you play your cards right, at some point later in your career, you'll be in such a better position to get what you want, and have a better enjoyment factor to boot.
I'd focus on paying your debt off, also focus on your career growth. As tempting as it maybe at this time to purchase a C7, and enjoy the hell out of it, with a little time and planning, the enjoyment of a brand new Corvette down the road will be better enjoyed.
Sometimes making big purchases for flashy toys at a young age can detract a young person from focusing on greater goals. I've seen many people derail their personal and professional growth because they overextended themselves financially, and found themselves in a situation where they became dependent on that paycheck, which in turned trapped them from making changes and progressing their career because career growth will require risk, and willingness to make moves. If you become dependent on the paycheck, the probability of you taking risks to move forward are less likely. You become stuck.
I'm 37 years old, bought my first brand new Vette in 2014. I've wanted a Corvette since I was 13 years old, so much so, I took a busboy job at the age of 13 earning $2 an hour plus tips, saved every dime until I turned 16 years old when I approach my uncle who saved me his 1977 black Corvette that he promised he hold on too, for me to buy if I was willing and able to come up with 7 grand cash. The car a sentimental value to me, as it was the car my Uncle would drive me around the block in when I was 4 years old. I was in love with the car. My whole life was that Corvette, I dreamt of it, I would visit my uncle weekly, and would sit in the car in the garage and daydream that one day I would drive it & own it. Unfortunately, I never was able to purchase the Vette, my father stepped in and denied me that opportunity when the time came when was ready to deliver the 7 grand cash I had stashed in a shoe box (True story).
I took the money I saved and applied it to art school after I graduated high school and started a career as a creative designer. My first job out of art school paid me $10/ hr.
I've worked hard over the past 20+ years by improving my skill sets, and taking RISKS in my career along the way to advance my financial earnings, and I did so because I maintained a simplistic lifestyle, saved my money and was debt free. Save to say, today I'm a Sr. marketing exec for a technology business, I earn well over six figures annually, and my enjoyment today being able to drive a new Corvette, far exceeds the fun I would have had temporarily at the age of 16.
Sometimes it's better to wait.
I hope you understand my point of view.
When I see someone like you, I see the potential. I guess if the purchase of the new Corvette doesn't at all detract you from personal and professional growth then I'm ok with it.
But if you play your cards right, at some point later in your career, you'll be in such a better position to get what you want, and have a better enjoyment factor to boot.
05-11-2016, 06:28 PM
#44
Advanced
Thread Starter
I'm going to spend the next 12 months paying down my student loans. At the bare minimum, I'll put an extra $450/month at them. This will simulate like I'm already paying for the Corvette. That way I'll know what it'll be like a year from now when the time comes to buy one.
05-11-2016, 06:56 PM
#45
Team Owner
Member Since: Jun 2005
Location: Northern, VA
Posts: 46,106
Received 2,481 Likes
on
1,944 Posts
St. Jude Donor '15
"In honor of jpee"
05-11-2016, 07:23 PM
#46
Consider this:
We ALL will tell you that a Corvette is the ONLY GREAT CAR.
But, it is not a "GREAT ONLY CAR".
Unless you live where the weather is always peachy and never have to haul items larger than a bread box, you will want an alternate ride to go with it.
Other than that try to hold out for a C7 if you can!
We ALL will tell you that a Corvette is the ONLY GREAT CAR.
But, it is not a "GREAT ONLY CAR".
Unless you live where the weather is always peachy and never have to haul items larger than a bread box, you will want an alternate ride to go with it.
Other than that try to hold out for a C7 if you can!
05-11-2016, 07:25 PM
#47
Le Mans Master
In 1968 I graduated from College. I was 21 years old. I went to work for NJ State government. My starting salary was $6,684 per year. With my first pay check in my hand I ordered a '69 427/400, 4 speed Coupe. I put 2K down and financed the rest. My payment was $73.00 a month for 36 months. I paid it off within the first year. So, when all the "millennials" hear about the "good old days" thats one of the reasons why they were the "good old days". :yes nod:
To the OP. Save your money. You are in a great financial position for your age. But, IMO, you would be "stretching" to buy a Vette. Thats why today will never be seen as the "good old days".
To the OP. Save your money. You are in a great financial position for your age. But, IMO, you would be "stretching" to buy a Vette. Thats why today will never be seen as the "good old days".
05-11-2016, 10:53 PM
#49
Burning Brakes
Member Since: Nov 2011
Location: Valdosta GA
Posts: 1,145
Received 126 Likes
on
98 Posts
St. Jude Donor '15-'16-'17-‘18-'19-'20-'21-'22
I'm going to spend the next 12 months paying down my student loans. At the bare minimum, I'll put an extra $450/month at them. This will simulate like I'm already paying for the Corvette. That way I'll know what it'll be like a year from now when the time comes to buy one.
A quick check shows a $70K purchase financed for 60 months @2% interest would require $20,000 down to have an $850 per month payment.
I'm curious how you arrived at your number -- purchase price, what amount down payment, interest rate, length of loan.
05-11-2016, 11:06 PM
#50
Team Owner
Hi everyone! I know this is an odd question, but hopefully you guys can be of some help. The reason I'm asking here is, you're all car/Corvette guys and understand the desire for the car. Asking family/friends/finance forums doesn't help much, since most of them think any expensive car is pointless. With most everyone here being older and wiser than me, I'm looking for advice on if I can comfortably afford a Corvette.
-I'm 23, two years out of college, have a very stable job, and own a house
-Single, no kids, one dog
-Monthly income after taxes/contributions: $3,750
-Contribute 13% to 401k (me and company contribution combined)
-Current monthly expenses (mortgage, car lease, gas, food, entertainment, student loans, dog food, etc.): $2,000
-I have $1,750 left over, give or take
-Savings: ~$10,000
I currently lease a 2015 ATS for $389/month (one year left). Financing a Corvette will about double that - I'm planning on a payment of about $850/month. I've already gotten insurance rates and it's about $30 cheaper per month than my ATS.
Besides my mortgage, my only debt is $17,000 in student loans. My payment is $236/month, but I've been paying $250-$300/month. I'm paid ahead about 10 months.
So...I'm looking for advice on purchasing a new or slightly used C7 once my lease is up (or when a pull ahead is offered). All said and done, my monthly expenses will go up about $450 if I purchase a Corvette. This would leave me with $1,300 after all expenses every month. Seems reasonable. Any advice?
P.S. - Please don't turn this into a cash vs. finance thread.
-I'm 23, two years out of college, have a very stable job, and own a house
-Single, no kids, one dog
-Monthly income after taxes/contributions: $3,750
-Contribute 13% to 401k (me and company contribution combined)
-Current monthly expenses (mortgage, car lease, gas, food, entertainment, student loans, dog food, etc.): $2,000
-I have $1,750 left over, give or take
-Savings: ~$10,000
I currently lease a 2015 ATS for $389/month (one year left). Financing a Corvette will about double that - I'm planning on a payment of about $850/month. I've already gotten insurance rates and it's about $30 cheaper per month than my ATS.
Besides my mortgage, my only debt is $17,000 in student loans. My payment is $236/month, but I've been paying $250-$300/month. I'm paid ahead about 10 months.
So...I'm looking for advice on purchasing a new or slightly used C7 once my lease is up (or when a pull ahead is offered). All said and done, my monthly expenses will go up about $450 if I purchase a Corvette. This would leave me with $1,300 after all expenses every month. Seems reasonable. Any advice?
P.S. - Please don't turn this into a cash vs. finance thread.
You have a lot of time to drive a Vette.
05-12-2016, 12:11 AM
#51
Racer
I'm going to spend the next 12 months paying down my student loans. At the bare minimum, I'll put an extra $450/month at them. This will simulate like I'm already paying for the Corvette. That way I'll know what it'll be like a year from now when the time comes to buy one.
When I graduated from college (1976), I was debt free in my first year of employment and in a job that paid the highest starting salary out of college (communications systems & semiconductor engineering). I maxed out my 401K savings from my first year on, never paid interest other than on a mortgage and enjoyed a 1970 GTO while I focused on my career. Within 10 years, I was running an R&D group living overseas in Asia and earning a 6 figure salary. Got to travel & see the world on employers dime, meanwhile saving & investing, and thoroughly enjoying life's experiences. Retired at 56 and have everything a person could ever want. I consider myself very fortunate, but it all started from my parents ingraining their wisdom into me regarding sound financial practices.
You strike me as an individual that is on the upper end of the Gaussian curve with respect to intelligence, ability to think things through and planning skills. That is a breath of fresh air these days with respect to the younger generation. I'm confident you will make the right decisions.
The following users liked this post:
AORoads (05-12-2016)
05-12-2016, 01:08 AM
#52
05-12-2016, 02:33 AM
#53
Pro
If you feel you will be comfortable with the payment then go for it. Only you can answer that. You being 23 and others saying wait you have plenty of time to get one because you need to save more money or pay more debt off or this or that is their opinion. You do what you feel you can afford. I bought my first vette at 19 years old. Some thought I was out of my mind but that was the car I wanted. I did what I felt was right for me. I had a good job and was saving money so I went for it. The naysayers made me work even harder to prove them wrong. Then others have asked if you have the potential to get let go. Anyone that is working could get laid off or terminated in today's times but you cant let the what ifs be the decision maker. If you worried about that you would never own anything. Life is a risk and you have to have fun living it. If you can afford it then get it and enjoy the hell out of and never look back. Just my .02
05-12-2016, 02:39 AM
#54
It reads to me like you've really got your head screwed on straight. It also reads to me like you are an intelligent and thoughtful guy. This post isn't going to tell you what you want to hear, but I hope you'll try hard to listen to the message. Whatever you do don't show this post to your mom! Note that this advice is filled with estimates and "fuzzy" math. While you may not agree with every single number and every single conclusion, the argument in totality still remains valid.
1) No one's job is "very stable." My jobs have always been "very stable." Nevertheless, I've been out of work four different times due to plant closings or downsizing during my career. I've always busted my azz at work, and I've been a valued employee. I've been very lucky that those traits always left me in a position to quickly get back on my feet with a better, higher-paying job. You haven't said what field you are in, but given the staggering unemployment and underemployment in our country many folks are finding that it is taking a year or more to find a job. The general rule of thumb is that you should have an emergency fund of at least six months. I strongly recommend that you plan to bump that up to at least 12 months. 12 x $3,750 = $45,000.
2) You own a house. You should be very proud of yourself. Not many guys your age can match that. Take it from someone who has moved around a bit for work and as a result has purchased and lived in many homes: Houses are money pits. Do you have money set aside to deal with the inevitable sound of piles of cash being sucked out of your bank account? A new roof might cost you $10,000 every 15 years. A new HVAC system might cost you $7,000 every 15 years. Painting might set you back $5,000 every 6 years. Repairing the driveway might cost you $1,500 every 15 years. How about your appliances? A new fancy new refrigerator can easily hit $2,000. How about your stove, dishwasher, washing machine, and dryer? Landscaping is an ongoing cost that seems to get more costly every year - mowing, weeding, feeding, mulch, edging, etc. If you are lucky and good with your hands you might be able to do much of this work yourself, but will you have the time, or will you have to pay someone else? You should probably be budgeting to save somewhere around $5,000/year to cover ongoing and future home expenses.
3) You're single! Congratulations, and I hope you stay that way. If you are like most of us you'll find yourself someone to fall in love with sometime in the next few years. She and your family will pressure you into marrying her. If you are lucky and her parents are loaded they might pick up the tab. If not you will need to pitch in. The average cost of a wedding is around $26,000. Don't forget the rings! Society wants you to pay 3 or 4 months of salary to put a pretty stone on her finger. $26,000 + 4 x $3,750 = $36,000.
A young wife usually is quickly followed by one or two kids. The current estimate is that one kid will cost you about $300,000 by the time they reach 18. If you decide to contribute to your child(s)' college education that cost will increase astronomically. It might not seem like you should start saving money for kids that you don't already have, but the wisest of us would.
Oh and let's not forget that you have a dog. How attached are you to that sloppy friend of yours? Do you have any insurance on your pet? If not, can you afford to pay $3,000 to treat your dog when you find out he's sick? Some people will go to the ends of the earth to try to prolong their pet's life. If you are one of those folks, you really should consider purchasing pet insurance.
4) Excellent job contributing to your 401k! Since your employer contributes to your efforts, there is simply no better way to save. You probably haven't maxed out your contribution, however. I recommend you go all in on this great program. For the sake of argument let's say that will reduce your monthly income by another $375. 12 x $375 = $4,500. Additionally you should really consider socking away the maximum ROTH IRA contribution every year. That's another $5,500 you'll want to save every year.
5) It is often said that you should "pay yourself first." A good recommendation is to throw 10% of your earnings into a savings account as soon as you get your check. I'm going to assume that you make about $60,000 annually. Paying yourself first would reduce your "take-home" by another $6,000 every year. Assume that this would be your savings for throwin' around money. Here is the bucket of money that you might use to fund a new car.
6) Student loans... A wise move would be to pay off your debt completely before incurring any additional debt especially for something like an automobile. If I read you correctly you could pay off all of your student loan debt in about 13 months if you don't do anything differently with your finances. This would be a very smart move. You are certainly paying more in interest on the loan then you are earning on your savings.
7) Some of the older folks on here would certainly tell you that if you have to finance the purchase, then you can't afford the purchase. There is a lot to be said for this approach. The wisest of us would probably not buy something on credit. Instead they would save until they could make the purchase with cash. Something to consider?
8) If your employer offers two of more levels of disability insurance, make sure that you up your contribution to the maximum level. Paying a few bucks more every month to get 80% of your salary (vs. lets say 50%) if you're disabled makes a lot of sense. Did you know that one in four of today's 20 year-olds will be disabled before they are able to retire?!
So what have we learned here? First you need to pay off that loan as quickly as possible. Second you need to max out your 401k contribution. Then you need to open a ROTH IRA. Don't forget to pay yourself first! Plus you need to start building an emergency fund in case your luck runs out with your job. You'll also want to start socking some money away for future home expenses. As I start adding all of these figures up, giving you the benefit of the doubt, I would recommend that in addition to paying off your student loan you save up somewhere around $50,000 before you start considering a new Vette. At your current savings rate this will take you a little more that 4 years. While you are saving as much of your money as you can, you can start working on figuring out how to better control your monthly expenses. Remember that once you've funded your emergency funds, you may want to plan to reduce your monthly throw-around money to defray the costs of your 401k, ROTH IRA, disability insurance, wedding, pet insurance, etc. In my mind these additional costs will almost use up all of the money that you currently consider to be surplus. So at the end of four years you've hopefully paid off your loan, and funded your emergency fund.
After you've saved up, you'll need to set yourself up for future success by fully funding your 401k, ROTH IRA, etc. You'll have been able to put your raises and any bonuses that you've earned towards your retirement and your savings. Only then will you really be in a position to wisely justify buying yourself more car than you need to get to work. The bad news is that you're probably not in the best position to do this for five or more years. The good news is that you'll be setup for success for the rest of your life. NONE of your peers will be in such a stable financial position no matter their income.
RESIST the strong urge to run out and order yourself a brand new car to celebrate all of your hard work. Instead consider buying yourself a nice used vehicle. By then a nice C7 - Z51 will probably be in the $30,000+ range. It will be virtually indistinguishable from the 2022 model, but it will be half the price. If you really want to push it save up for the car so that you can pay for it in cash instead of financing it. But what the heck! Now is the time to splurge. Perhaps you reward yourself for your 30th birthday by buying that C7 that you want so badly right now. Your mom and I will both approve!
If you follow this approach to managing your finances throughout your lifetime you'll be able to retire early with millions of dollars in investments. Unfortunately this plan doesn't get you what you want right now, but I guarantee that you'll be ecstatic and thankful when you're sitting around the fireplace with your great-grandchildren. Truth be told, you'll be ecstatic and thankful for making these wise moves every day for the rest of your life.
1) No one's job is "very stable." My jobs have always been "very stable." Nevertheless, I've been out of work four different times due to plant closings or downsizing during my career. I've always busted my azz at work, and I've been a valued employee. I've been very lucky that those traits always left me in a position to quickly get back on my feet with a better, higher-paying job. You haven't said what field you are in, but given the staggering unemployment and underemployment in our country many folks are finding that it is taking a year or more to find a job. The general rule of thumb is that you should have an emergency fund of at least six months. I strongly recommend that you plan to bump that up to at least 12 months. 12 x $3,750 = $45,000.
2) You own a house. You should be very proud of yourself. Not many guys your age can match that. Take it from someone who has moved around a bit for work and as a result has purchased and lived in many homes: Houses are money pits. Do you have money set aside to deal with the inevitable sound of piles of cash being sucked out of your bank account? A new roof might cost you $10,000 every 15 years. A new HVAC system might cost you $7,000 every 15 years. Painting might set you back $5,000 every 6 years. Repairing the driveway might cost you $1,500 every 15 years. How about your appliances? A new fancy new refrigerator can easily hit $2,000. How about your stove, dishwasher, washing machine, and dryer? Landscaping is an ongoing cost that seems to get more costly every year - mowing, weeding, feeding, mulch, edging, etc. If you are lucky and good with your hands you might be able to do much of this work yourself, but will you have the time, or will you have to pay someone else? You should probably be budgeting to save somewhere around $5,000/year to cover ongoing and future home expenses.
3) You're single! Congratulations, and I hope you stay that way. If you are like most of us you'll find yourself someone to fall in love with sometime in the next few years. She and your family will pressure you into marrying her. If you are lucky and her parents are loaded they might pick up the tab. If not you will need to pitch in. The average cost of a wedding is around $26,000. Don't forget the rings! Society wants you to pay 3 or 4 months of salary to put a pretty stone on her finger. $26,000 + 4 x $3,750 = $36,000.
A young wife usually is quickly followed by one or two kids. The current estimate is that one kid will cost you about $300,000 by the time they reach 18. If you decide to contribute to your child(s)' college education that cost will increase astronomically. It might not seem like you should start saving money for kids that you don't already have, but the wisest of us would.
Oh and let's not forget that you have a dog. How attached are you to that sloppy friend of yours? Do you have any insurance on your pet? If not, can you afford to pay $3,000 to treat your dog when you find out he's sick? Some people will go to the ends of the earth to try to prolong their pet's life. If you are one of those folks, you really should consider purchasing pet insurance.
4) Excellent job contributing to your 401k! Since your employer contributes to your efforts, there is simply no better way to save. You probably haven't maxed out your contribution, however. I recommend you go all in on this great program. For the sake of argument let's say that will reduce your monthly income by another $375. 12 x $375 = $4,500. Additionally you should really consider socking away the maximum ROTH IRA contribution every year. That's another $5,500 you'll want to save every year.
5) It is often said that you should "pay yourself first." A good recommendation is to throw 10% of your earnings into a savings account as soon as you get your check. I'm going to assume that you make about $60,000 annually. Paying yourself first would reduce your "take-home" by another $6,000 every year. Assume that this would be your savings for throwin' around money. Here is the bucket of money that you might use to fund a new car.
6) Student loans... A wise move would be to pay off your debt completely before incurring any additional debt especially for something like an automobile. If I read you correctly you could pay off all of your student loan debt in about 13 months if you don't do anything differently with your finances. This would be a very smart move. You are certainly paying more in interest on the loan then you are earning on your savings.
7) Some of the older folks on here would certainly tell you that if you have to finance the purchase, then you can't afford the purchase. There is a lot to be said for this approach. The wisest of us would probably not buy something on credit. Instead they would save until they could make the purchase with cash. Something to consider?
8) If your employer offers two of more levels of disability insurance, make sure that you up your contribution to the maximum level. Paying a few bucks more every month to get 80% of your salary (vs. lets say 50%) if you're disabled makes a lot of sense. Did you know that one in four of today's 20 year-olds will be disabled before they are able to retire?!
So what have we learned here? First you need to pay off that loan as quickly as possible. Second you need to max out your 401k contribution. Then you need to open a ROTH IRA. Don't forget to pay yourself first! Plus you need to start building an emergency fund in case your luck runs out with your job. You'll also want to start socking some money away for future home expenses. As I start adding all of these figures up, giving you the benefit of the doubt, I would recommend that in addition to paying off your student loan you save up somewhere around $50,000 before you start considering a new Vette. At your current savings rate this will take you a little more that 4 years. While you are saving as much of your money as you can, you can start working on figuring out how to better control your monthly expenses. Remember that once you've funded your emergency funds, you may want to plan to reduce your monthly throw-around money to defray the costs of your 401k, ROTH IRA, disability insurance, wedding, pet insurance, etc. In my mind these additional costs will almost use up all of the money that you currently consider to be surplus. So at the end of four years you've hopefully paid off your loan, and funded your emergency fund.
After you've saved up, you'll need to set yourself up for future success by fully funding your 401k, ROTH IRA, etc. You'll have been able to put your raises and any bonuses that you've earned towards your retirement and your savings. Only then will you really be in a position to wisely justify buying yourself more car than you need to get to work. The bad news is that you're probably not in the best position to do this for five or more years. The good news is that you'll be setup for success for the rest of your life. NONE of your peers will be in such a stable financial position no matter their income.
RESIST the strong urge to run out and order yourself a brand new car to celebrate all of your hard work. Instead consider buying yourself a nice used vehicle. By then a nice C7 - Z51 will probably be in the $30,000+ range. It will be virtually indistinguishable from the 2022 model, but it will be half the price. If you really want to push it save up for the car so that you can pay for it in cash instead of financing it. But what the heck! Now is the time to splurge. Perhaps you reward yourself for your 30th birthday by buying that C7 that you want so badly right now. Your mom and I will both approve!
If you follow this approach to managing your finances throughout your lifetime you'll be able to retire early with millions of dollars in investments. Unfortunately this plan doesn't get you what you want right now, but I guarantee that you'll be ecstatic and thankful when you're sitting around the fireplace with your great-grandchildren. Truth be told, you'll be ecstatic and thankful for making these wise moves every day for the rest of your life.
The following users liked this post:
Gymbow (05-12-2016)
05-12-2016, 02:52 AM
#55
Intermediate
Member Since: Nov 2015
Location: Camarillo CA
Posts: 37
Likes: 0
Received 0 Likes
on
0 Posts
Some great thoughts here. I just want to add that I bought my vette at 24 and never have once regretted it. Now, I got a 2005 m6 for a great price, so my monthly is a lot less than yours would be. Whether you buy a new or used Corvette, I think that the joy it brings to your day to day life is well worth it. I definitely look for excuses to drive mine. Good luck!
05-12-2016, 04:10 AM
#56
Just buy the thing. Kids and cars, there is never a "right" time.
Pay some more **** off first if you want but some more **** will just come along. You seem like a smart kid, if believe you can afford it and you genuinely want it, get after it and have fun out there.
Pay some more **** off first if you want but some more **** will just come along. You seem like a smart kid, if believe you can afford it and you genuinely want it, get after it and have fun out there.
05-12-2016, 07:17 AM
#57
Hi everyone! I know this is an odd question, but hopefully you guys can be of some help. The reason I'm asking here is, you're all car/Corvette guys and understand the desire for the car. Asking family/friends/finance forums doesn't help much, since most of them think any expensive car is pointless. With most everyone here being older and wiser than me, I'm looking for advice on if I can comfortably afford a Corvette.
-I'm 23, two years out of college, have a very stable job, and own a house
-Single, no kids, one dog
-Monthly income after taxes/contributions: $3,750
-Contribute 13% to 401k (me and company contribution combined)
-Current monthly expenses (mortgage, car lease, gas, food, entertainment, student loans, dog food, etc.): $2,000
-I have $1,750 left over, give or take
-Savings: ~$10,000
I currently lease a 2015 ATS for $389/month (one year left). Financing a Corvette will about double that - I'm planning on a payment of about $850/month. I've already gotten insurance rates and it's about $30 cheaper per month than my ATS.
Besides my mortgage, my only debt is $17,000 in student loans. My payment is $236/month, but I've been paying $250-$300/month. I'm paid ahead about 10 months.
So...I'm looking for advice on purchasing a new or slightly used C7 once my lease is up (or when a pull ahead is offered). All said and done, my monthly expenses will go up about $450 if I purchase a Corvette. This would leave me with $1,300 after all expenses every month. Seems reasonable. Any advice?
P.S. - Please don't turn this into a cash vs. finance thread.
-I'm 23, two years out of college, have a very stable job, and own a house
-Single, no kids, one dog
-Monthly income after taxes/contributions: $3,750
-Contribute 13% to 401k (me and company contribution combined)
-Current monthly expenses (mortgage, car lease, gas, food, entertainment, student loans, dog food, etc.): $2,000
-I have $1,750 left over, give or take
-Savings: ~$10,000
I currently lease a 2015 ATS for $389/month (one year left). Financing a Corvette will about double that - I'm planning on a payment of about $850/month. I've already gotten insurance rates and it's about $30 cheaper per month than my ATS.
Besides my mortgage, my only debt is $17,000 in student loans. My payment is $236/month, but I've been paying $250-$300/month. I'm paid ahead about 10 months.
So...I'm looking for advice on purchasing a new or slightly used C7 once my lease is up (or when a pull ahead is offered). All said and done, my monthly expenses will go up about $450 if I purchase a Corvette. This would leave me with $1,300 after all expenses every month. Seems reasonable. Any advice?
P.S. - Please don't turn this into a cash vs. finance thread.
05-12-2016, 07:23 AM
#58
Melting Slicks
<snip>
Cliff notes:
Wait until ATS payments are gone
Pay off your school debt first (not using 10k)
Have another car to drive?
Invest in Roth IRA?
Keep at least 10k in account for emergency fund
Save up more for down payment if you want to keep your payments lower
<snip>
Cliff notes:
Wait until ATS payments are gone
Pay off your school debt first (not using 10k)
Have another car to drive?
Invest in Roth IRA?
Keep at least 10k in account for emergency fund
Save up more for down payment if you want to keep your payments lower
<snip>
I'm going to spend the next 12 months paying down my student loans. At the bare minimum, I'll put an extra $450/month at them. This will simulate like I'm already paying for the Corvette. That way I'll know what it'll be like a year from now when the time comes to buy one.
Indeed, I have done this in the past with other stuff, definitely works. You seem to be on a good path.
Shoot for a 2018 model that uses the new paint booth methods.
05-12-2016, 08:03 AM
#59
Safety Car
Member Since: Oct 2012
Location: Austin Texas
Posts: 4,794
Received 676 Likes
on
480 Posts
St. Jude Donor '15
My 2 cents worth...It's a lifestyle choice.
There is never a right time to do anything. You are saving and paying your debt, own a home and are young.
The ladies will be looking for you so enjoy your life, do as you see fit and put the financial advice on the table but remember it is advice. Each person has their own way to approach life.
If you can increase your donations to your retirement, I would do that and also try to get the C7, but keep the payments down to $600 or so.
Enjoy life and all that it brings to you .
There is never a right time to do anything. You are saving and paying your debt, own a home and are young.
The ladies will be looking for you so enjoy your life, do as you see fit and put the financial advice on the table but remember it is advice. Each person has their own way to approach life.
If you can increase your donations to your retirement, I would do that and also try to get the C7, but keep the payments down to $600 or so.
Enjoy life and all that it brings to you .
05-12-2016, 08:15 AM
#60
Le Mans Master
Do plan to lease or buy the C-7?
In general a vehicle for personal use should not be leased.
There are no tax benefits for personal use, like there can be for a business vehicle.
You seem to have your ducks lined up pretty well on all your budget items, and the $850 a month does seem to fit, if it is a purchase.
Another option other than a new purchase, is finding a dealer that handles 'executive' cars that have been used by GM 'big wigs'. Often times these cars are extremely low mileage and all the bugs (if any) have been worked out. They are usually last year's model. Our local dealer often has two or three that have less than 5000 miles on them and have been purchased directly from GM, also, they come with a huge discount.
In general a vehicle for personal use should not be leased.
There are no tax benefits for personal use, like there can be for a business vehicle.
You seem to have your ducks lined up pretty well on all your budget items, and the $850 a month does seem to fit, if it is a purchase.
Another option other than a new purchase, is finding a dealer that handles 'executive' cars that have been used by GM 'big wigs'. Often times these cars are extremely low mileage and all the bugs (if any) have been worked out. They are usually last year's model. Our local dealer often has two or three that have less than 5000 miles on them and have been purchased directly from GM, also, they come with a huge discount.
Last edited by Phanni; 05-12-2016 at 08:17 AM.