I am 27 with an $88k annual salary, about $40k in debt (most of which is student loan which I am paying above the minimum, about $8k is a recently purchased engagement ring at no interest for a year), no CC debt, about $20k in the bank, am contributing to a Roth IRA for the last 7 years or so, and as of recently a 5% match 401k is available through my company that I will take advantage of. My credit dropped from 795 to about 740 due to the ring loan. Also I pay $1k for rent per month.
I love cars. I have an older sports car worth about $6k that I own. I want to get a better sports car worth about $25-30k, and finance it obviously. And I'm aware of the additional cost of this ownership, like higher insurance, property tax, maintenance cost, etc. Looking at loans for a private sale that at the lowest would be 4.25% interest, monthly payments would be about $500 until I sold my current car, and I think I would put that money toward that loan.
Is this a bonehead financial decision, to get this nicer sports car? I do see myself getting a house in the next year or two. My SO currently doesn't make a lot as she's completing her doctoral program, but has high income similar to mine in the near future. She also has excellent credit and decent savings, but also a good chunk of student debt.
I've also been reading things about how even if I had enough to pay off the car up front, that's silly because if I invested that money, my return would be much greater than the interest I'd be paying. Should I have a similar outlook with that $6k from my car if I sell it?
Some advice would be great, thanks!
Submitted January 30, 2018 at 08:46AM by themza912 http://ift.tt/2GxRh2I
