From The Total Money Makeover by Dave Ramsey
Myth: Car Payments are a way of life; you’ll always have one.
Truth: Staying away from car payments by driving reliable used cars is what the average millionaire does; that is how he or she became a millionaire.
USA Today notes that the average car payment is $378 over 55 months…
If you put $378 per month in a cookie jar for just 10 months, you have almost $4,000 for a cash car. I am not suggesting you drive your $4,000 car you whole life, but that is how you start without debt. Then you can save the same amount again and trade up to an $8,000 car 10 months later and up to a $12,000 car 10 months after that. In just 30 months, of 2 1/2 years, you can drive a paid for $12,000 car, never having made a payment, and never have to make payments again.
Good advice… this is a great book. It is filled with great examples like the one above which will help people make better financial decisions.
Proverbs 22:7 (NIV) - The rich rule over the poor, and the borrower is servant to the lender.
2 responses so far ↓
1 Brian R // Aug 21, 2006 at 12:15 pm
The thing that always get me, especially since I’ve been without a car for a while now, is how do you come up with $378 per month in the first place!
2 DEBTective // Sep 18, 2006 at 3:59 pm
That’s what I’m talkin’ about, babe. Dave Ramsey’s plan makes a lot of sense. Paying a car payment means paying more than you would if you had saved up the cash and bought the wheels outright. Thanks for spreading the word about deep-sixing the debt and connecting with the cash. Great job, kid!
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