Saving for the next car acct.
Member writes:
In a message dated 3/23/2005 9:48:08 P.M. Eastern Standard Time, X writes:
Instead of a rainy day account (a rainy day to me is that I can't afford to go out at this point in my life), should I set up an account with a specific goal in mind. In about 6 years I will be finishing up grad school and needing to purchase a car and afford a place to live. Is there a separate account I should look into to set up to prevent rainy days?I say this realizing that 8% of 0 is still 0. I'm thinking more in terms of money from this summer. Just trying to think ahead, or am I thinking too far ahead? I hate that I can't get out of the mind set of thinking in the immediate instead of the long term. By immediate I mean 5-6 years. That scares me more than when I'm 60. Is that wrong? Or is that me just being naive with finances?Thanks for your input.
Money Prof:
First of all if you're thinking beyond your next paycheck you're doing better than most. Yes, you need to think longer term, but I personally don't think there is one other member under 30 yrs old that thinks in terms of even 2 years let alone 5 years. ( that's at this point in time, hope that changes soon). I'm being polite, I really don't think its one year. :(
Are you serious on this or is this giving yourself the right answer???
Yes by all means set up a "specific goal" acct., just so its only for that item ( NO EXCUSES). For example a "saving for the next car" acct. You could compute what you would want to save for the down payment. What your trade in would be worth then, and estimated payments on a 3 yr loan.
Use this calculator ( and save it for future use): http://www.tcalc.com/tvwww.dll?CalcLoan?Tmplt=CarAfford.htm&Cstm=intuit3&PmntAmt=300.00
You could open a separate AG Edwards acct., then just leave the money in a MM which is automatic until you have multiples of say $500, then put that into "laddered" one - five year CDs which will give you a little more interest. You would never put this in the stock market as that is ONLY for long term money.It's probably a good idea to set up this separate "new car" acct., not so much for the extra interest you'll get while starting it, but for the psychological part that its earmarked for something and can't be used for an extra pair of new sunglasses.
In a message dated 3/23/2005 9:48:08 P.M. Eastern Standard Time, X writes:
Instead of a rainy day account (a rainy day to me is that I can't afford to go out at this point in my life), should I set up an account with a specific goal in mind. In about 6 years I will be finishing up grad school and needing to purchase a car and afford a place to live. Is there a separate account I should look into to set up to prevent rainy days?I say this realizing that 8% of 0 is still 0. I'm thinking more in terms of money from this summer. Just trying to think ahead, or am I thinking too far ahead? I hate that I can't get out of the mind set of thinking in the immediate instead of the long term. By immediate I mean 5-6 years. That scares me more than when I'm 60. Is that wrong? Or is that me just being naive with finances?Thanks for your input.
Money Prof:
First of all if you're thinking beyond your next paycheck you're doing better than most. Yes, you need to think longer term, but I personally don't think there is one other member under 30 yrs old that thinks in terms of even 2 years let alone 5 years. ( that's at this point in time, hope that changes soon). I'm being polite, I really don't think its one year. :(
Are you serious on this or is this giving yourself the right answer???
Yes by all means set up a "specific goal" acct., just so its only for that item ( NO EXCUSES). For example a "saving for the next car" acct. You could compute what you would want to save for the down payment. What your trade in would be worth then, and estimated payments on a 3 yr loan.
Use this calculator ( and save it for future use): http://www.tcalc.com/tvwww.dll?CalcLoan?Tmplt=CarAfford.htm&Cstm=intuit3&PmntAmt=300.00
You could open a separate AG Edwards acct., then just leave the money in a MM which is automatic until you have multiples of say $500, then put that into "laddered" one - five year CDs which will give you a little more interest. You would never put this in the stock market as that is ONLY for long term money.It's probably a good idea to set up this separate "new car" acct., not so much for the extra interest you'll get while starting it, but for the psychological part that its earmarked for something and can't be used for an extra pair of new sunglasses.
posted by MoneyProf at Thursday, March 24, 2005
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