Page 57 - Book6E

CHAPTER 6
Wait Until You Can Pay Cash
For That Car
We’ve all heard it before, and we’re likely to hear it again and again: working to become debt-free includes working hard to “pay as we go”—to pay cash for items as often and wherever possible to avoid the use of credit cards or loans. Obviously, however, using cash to pay for less costly items like a power drill, sewing machine or set of golf clubs is less of a challenge than paying for a car. Regardless of what you’re trying to purchase, it takes discipline and budgeting to set money aside week to week, month to month, and year to year, but it can be done.
Paying Cash for a Car Is Possible
Many of us believe that paying cash for a car just isn’t in the cards. But Liz Pulliam Weston, writing for MSN Money, begs to differ and offers guidelines on how it can be achieved. First off, you want to try and live by the rule that you don’t want to borrow money to pay for assets that lose value, like cars, if you can possibly avoid it. While you might not be able to pay cash for your next vehicle, you likely could for the one after that. To do so, Weston suggests financing the car for four years or less, then keep it for another four years after you’ve paid it off. The secret is then to keep making the monthly payments during those four years to your savings account and then you’ll have cash for your next car.
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