Do You Really Need to Make a Car Payment? - Budgeting and ...

Do you assume that you need to make a car payment?

One common and often-unquestioned assumption in our society is that people MUST borrow money to buy a car. Many people can't imagine having enough cash to buy a car.

But paying cash for a car can save you thousands of dollars in interest. So how do you do it?

I use a mental technique called "making a car payment to myself." I'll make a small payment each month that's roughly the same amount that I'd pay if I had a car loan -- anywhere from $200 to $400, depending on the type of car payment you'd be comfortable with.

But instead of sending that car payment to a lender, I send the car payment to myself. I use an online savings account like SmartyPig to keep that money in a "separate," stand-alone savings account dedicated purely to buying a car in cash. My goal is to have at least $7,000 earmarked towards my next car purchase within one year.

Want to learn more? Read this article about making a car payment to yourself.

Source: http://budgeting.about.com/b/2012/10/28/do-you-really-need-to-make-a-car-payment.htm

peyton manning sf giants gold rush gold rush windows 8 Emanuel Steward college board