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The Top Tip for Commuting to Work
I realized that there’s one topic I haven’t been speaking on within Finessing Finance. It’s one of the most important subjects which we all deal with. The reason I’ve been avoiding the topic is because I am perfectly set up. The topic (as you could have guessed) is your daily commute.
The number one tip on transportation?
Walk or Bike to Work
Transportation sucks the life out of our monthly finances. From tune-ups to emergencies, paying for our transportation can incur a large penalty to our personal finances.
The Golden Rules of the Road
There is plenty of advice when it comes to thinking about a car. A car is almost mandatory in a country like the U.S. and when it comes to this depreciating asset. It’s important to never go big when looking to buy a car for transportation.
Here’s advice on the subject:
Cars are always depreciating assets
A car depreciates anywhere from 9% to 11% the moment you drive the car off the lot
Over the course of 5 years, you will have lost 40% of the car’s original value
If you were to invest this money into the stock market instead, you could have earned 61% of your investment back over the course of 5 years
When it comes to buying a used car, look for a car that is anywhere from three to four-years-old
How Much Car Can I Afford?
There’s a formula to apply when it comes to figuring out how much car you can afford at any given moment. It’s the 20/4/10 Rule.
20% Downpayment
Over 4 Years
No more than 10% of your monthly income
Keep Your Eyes on the Road
Let’s keep our hearts on the road and our paychecks in line. I’ve been driving a 2011 Nissan Rogue and the SUV is nearing the end of its life. I’ll have to personally consider the Rule above when it comes time!
Have a great week,
Jordan