New Year Resolution: Calculating Car Payments

Automobile expenses (car payment + insurance + gas + maintenance + registration) should not exceed 20% of your net (after tax) income. 

If you're financing a car, "they" say the terms shouldn't exceed four years. But those five and six year loans are awfully tempting with their lower monthly payments. 

Those long term loans are hurting you and benefitting the financial institution.

When buying a car that is within your budget, shoot for the less expensive car. Even if the salesperson offers you a lower monthly payment for the flashier car. You'll end up paying more in the long run. 

Avoid the 5 Worst Car Buying Mistakes.

And if you're going to buy a car, you need to read the 4 Square Rip-Off.

New Year Resolution: Set Aside 10% for Yourself

If you haven't already done so, set aside 10% of your gross (before taxes) for yourself.

(Need help calculating 10%? Move the decimal in your paycheck one space to the left.)

Babe Ruth's check was made out for $6,595.38. Move the decimal one space to the left.

10% = $659.54.

Set that 10% aside and then forget about it. Seriously, don't think about it. Not even when you find that super amazing once in a lifetime deal.

Not even then.

The best way to do this is to take it straight off the top, before you even see it. If your employer allows you to do an allotment, this is the way to go.

Open a savings account. There are online savings accounts, if you're interested.

If you can't do 10%, then now is the time to be brutally honest with yourself. No excuses. Refer to the budget you made earlier and figure out where you're going to cut back. If you can't find 10%, you're living above your means.

New Year's Resolution: Live Beneath (not within) Your Means

Set a goal. A realistic goal. Not one that you're going to forget about next week.

Many people (myself included) search for happiness in things. There's nothing more exhilarating that finding a good deal.

(Can I get an amen?)

It's impossible to convince someone to dial down their lifestyle if they don't want to do it. This is something you have to do for yourself. You have to find happiness within yourself, not in your objects.

In order to get your finances under control, you must be brutally honest with yourself. Now is not the time to tell little white lies.

Get a notebook. One that can be dedicated solely to your budget. If you'd like, here is a budget worksheet.

You're welcome.

At the top of the list, write the amount for your take home pay from every source of income. Beneath that line, make a list of all of your expenses: tithing, utilities, vehicle payments, insurance.

At the bottom of the list, write down everything else you spent money on last month. (This is where banking apps come in handy.) If you're like me, there was a whole lot of fast food and coffee.

OBJECTIVE:

Find where you can cut back. Then do it.

Locate the amount for your total living expenses. Then multiply that by 6. That is the amount you should aim to have in your savings account.

You can do it.