Drove Yourself In Debt | Pitfalls of Car Loans | How to budget

Disclaimer:
Credentials from The School of Hard Knocks - University of Life (not a licensed advisor)

Sell your overpriced car and buy a used Ford Crown Victoria. Allocate every dollar earned towards balancing your budget…

Okay, easier said than done. Kinda feel trapped don't cha! Most likely you're gonna have to ride this car loan through to end of term, especially if the value is upside down. The message that will blearily be clear here is to never finance, instead buy a car out right with the money you have saved up. Unfortunately the necessities to function in this world won't wait for you to get your affairs in order. Consequently most people in this predicament are drawn towards dealership auto financing. It's a circumstance that invites buyers to purchase a vehicle with terms and conditions more costly than they can honestly afford. This arrangement often sets the stage for crippling debt to compound with ongoing living experiences. An interest based loan is literally paying money for money. You will be charged thousands of dollars on top of the Principal Balance for the convenience to make years of installment payments. The longer the term the higher amount in interest fees; so basically you’re paying more to borrow the money than the car was originally worth

In my opinion a car loan should only be applied for if an emergency situation arises. This is not to be misused as an unlimited budget, nor the opportunity to seek your dream car. Credit Score impacts the overall cost of your car loan and insurance premium. Your diligence is critical to compare banks with the lowest interest rate and shortest repayment terms. If you’re experiencing this scenario your vehicle choice should be limited only to the most affordable reliable automobile available. Financing a car through a Bank or Credit Union isn't the end of the world. if you’re smart about the responsibility it can actually instill money management skills and force you to follow a budget. Listen… my personal value of money was cultivated over a period of trial and error. I built my credit worthiness on the rollercoaster of risk. I’ve never filed for bankruptcy or missed a payment, but it was relentless grinding just to keep up. Thankfully it worked out, however wealth building was not a possibility down this path. As mentioned prior, I overcame debt and only realized the value of money after paying off the Credit Cards and New Car purchases. I know I’m contradicting myself, but what I’m advocating are the lessons I’ve learned.

FACE TO FACE WITH MONEY
(Paying off debt is a long-game, it requires patience with a purpose)

Step 1:
Look in the mirror and forgive your ignorance.

Get Help:
Seek example from a vetted mentor to measure accountability.

Break The Spell:
Unsubscribe to the Fear Of Missing Out.

Attitude Adjustment:
Respect statistics and discover the power in the word Budget.

Define Priorities:
Create a financial plan to reach your goals, but flexible enough to stay dedicated. Thumbnail quarterly updates of your debt to the closet door. if you dare to be held accountable by the entire household, post it on the refrigerator too.

KEEP YOUR MONEY SAFE

Savings Account:
Deposit a minimum of three months worth of expenses in the event of a medical crisis or job loss. Also include amounts for any possible or unexpected auto-home-health insurance deductible. Basically establish an emergency fund. There is nothing more financially debilitating than living check-to-check, it will make you scared to change employment or become an entrepreneur.

Debit Card:
Convenient for frequent trustworthy local transactions; grocery store and neighborhood fuel station. Don’t connect overdraft, you must only spend what’s designated. If security is breached delays will occur and possibly frozen funds, so the less merchants the better.

Credit Card:
Use only for reservations, secure online purchases, travel expenses and unprepared emergencies. The dispute protection is user friendly for the cardholder, in most cases you wont skip a beat. Be sure to pay your charges in full and never leave a balance to be subject to fees.

Paper Checks (Checking Account):
Use exclusively for Automated Clearing House / Electronic Bill Payments, and initiate each scheduled payment directly with your service provider; e.g, Verizon, American Express or Utility Company.
Written payment is obsolete, avoid using checks at all cost. Highly susceptible to fraud and alterations. These days no human eye should see your full account number.

Venmo, Paypal, Zelle and other person to person electronic pay apps:
Use to keep your account info private for various services and marketplace transactions. If you have a friend or family in need, gift only what you can afford. Banks provide loans… you are not a bank.

Cold Hard Cash:
Spend everywhere that’s safe to handle in public, especially where a receipt is not required.

CONCLUSION
Don’t live by the shortcut.


NOTE: Panther Platform & Mustang