{"id":53231,"date":"2018-05-15T14:57:43","date_gmt":"2018-05-15T18:57:43","guid":{"rendered":"https:\/\/www.iwillteachyoutoberich.com\/?p=26078"},"modified":"2025-04-04T11:10:21","modified_gmt":"2025-04-04T15:10:21","slug":"find-out-how-much-car-you-can-afford-with-20-40-10-rule","status":"publish","type":"post","link":"https:\/\/www.iwillteachyoutoberich.com\/find-out-how-much-car-you-can-afford-with-20-40-10-rule\/","title":{"rendered":"The 20\/4\/10 Rule to Calculate How Much Car You Can Afford"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"53231\" class=\"elementor elementor-53231\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-54eee1c6 elementor-section-boxed elementor-section-height-default elementor-section-height-default qodef-elementor-content-no\" data-id=\"54eee1c6\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-1ae52bac\" data-id=\"1ae52bac\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-f007a79 elementor-widget elementor-widget-text-editor\" data-id=\"f007a79\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Knowing if you can afford a car is the first step to buying one.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Also, the water is wet.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>If you\u2019re confused about how much you should spend, don\u2019t worry. Just use this rule of thumb: Spend no more than 10% of your gross monthly income on your car expenses. That includes things like a car payment, interest, insurance, and even gas.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Of course, the 10% rule isn\u2019t exactly a one-size-fits-all solution. That\u2019s why I want to take a deeper look at buying a car \u2014 and show you tactics to get the most out of your car negotiations.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:list --><\/p>\n<ul>\n<li><u><a href=\"#what-is-the-20-4-10-rule-for-car-buying\">What is the 20\/4\/10 rule for car buying<\/a><\/u><\/li>\n<li><u><a href=\"#2\">A different look at buying a car<\/a><\/u><\/li>\n<li><u><a href=\"#3\">How to negotiate the price of your car<\/a><\/u><\/li>\n<li><u><a href=\"#4\">Dos and Don\u2019ts of car purchases<\/a><\/u><\/li>\n<li><u><a href=\"#5\">Earn more money for your dream car<\/a><\/u><\/li>\n<li><a href=\"#FAQs\">FAQs About\u00a0How Much Car Can You Afford<\/a><\/li>\n<\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-98fd4bf elementor-widget elementor-widget-text-editor\" data-id=\"98fd4bf\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-family: 'PP Mori', 'PP Mori'; font-size: 40px; font-weight: 600; letter-spacing: 0px;\">What is the 20\/4\/10 rule for car buying<\/span><\/p>\n<p><!-- \/wp:heading --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>I love financial back-of-the-napkin tricks. They can help you roughly answer hairy finance questions quickly so you don\u2019t slave over calculations and waste time.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>The 20\/4\/10 is a good example of one. It can help you get solid starting numbers to help determine whether or not you can afford a car.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Here\u2019s how it works:<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:list --><\/p>\n<ul>\n<li><strong>20% down payment on the car.<\/strong><\/li>\n<li><strong>4-year car loan <\/strong>or less.<\/li>\n<li><strong>10% or less of your gross monthly income <\/strong>goes towards car expenses including gas, insurance, DMV fees, repairs, parking\/speeding tickets, and interest payments.<\/li>\n<\/ul>\n<p><!-- \/wp:list --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Imagine you want to purchase a new car for $30,000 and you earn roughly $50,000 a year. That means you need to put at most a down payment of $6,000 (20% of the cost) and spend no more than $417 a month (10% of your income) on expenses for it.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:heading --><\/p>\n<h2 id=\"2\">A different look at buying a car<\/h2>\n<p><!-- \/wp:heading --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>It\u2019s funny. People make a huge effort to save on things like clothes and eating out \u2014 but when it comes to BIG purchases like buying a house or a car, they make awful decisions and erase any savings they\u2019ve made.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>How many times have you seen someone sink a bunch of money into a flashy luxury car with a bunch of unnecessary additions \u2026 only for them to end up trying to sell it within a few years?<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>What they fail to take into consideration is TIME. More specifically, how long do you plan to keep the car before you sell it? It doesn\u2019t matter how good of a deal you get on a new car. If you sell it after just a few years of owning it, you\u2019ve lost money.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>That\u2019s why it\u2019s important that you pick a <em>reliable <\/em>car, maintain it, and drive it for as long as humanly possible. It\u2019s only when you finish paying off the car that the real savings start.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Also, by taking good care of your car over the long term, you save even MORE money on it \u2014 and you\u2019ll have a great car. And there are a few solid indicators to what makes a good car:<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:list --><\/p>\n<ul>\n<li><strong>Reliability.<\/strong> When I bought my car, above all, I wanted one that wouldn\u2019t break down. I have enough stuff going on in my life, and I want to avoid repair issues that cost time and money as much as possible. Because this was a high priority, I was willing to pay more for it.<\/li>\n<li><strong>A car you love. <\/strong>Long time readers know I\u2019m a big fan of conscious spending (more on this later). For me, I knew I\u2019d be driving the car for a long time, so I wanted to pick one I <em>really <\/em>enjoyed driving.<\/li>\n<li><strong>Resale value. <\/strong>One of my friends bought a $20,000 luxury car, drove it for about seven years, and then sold it for 50% of the price. That means she got a fantastic deal.<\/li>\n<li><strong>Insurance. <\/strong>The insurance rates for a new and used car can be pretty different. Even if they\u2019re only slightly different (say, $50\/month), that can add up over the years.<\/li>\n<li><strong>Fuel efficiency. <\/strong>Gas prices seem to always be in a state of flux. Consider a fuel-efficient, or even hybrid, car. Gas mileage is an important factor in determining the long-term value of a car.<\/li>\n<\/ul>\n<p><!-- \/wp:list --><\/p>\n<p><!-- wp:list --><\/p>\n<ul>\n<li><strong>Down payment. <\/strong>This is crucial. If you don\u2019t have much money for the down payment, look to getting a used car. If you put down $0, your interest rate will be much higher. Don\u2019t do this.<\/li>\n<li><strong>Interest rate. <\/strong>The interest rate on your car loan depends on your <u><a href=\"https:\/\/www.iwillteachyoutoberich.com\/blog\/how-to-improve-your-credit-score\/\">credit score<\/a><\/u>. That\u2019s why you want to make sure your credit score is in top shape when you finally apply for the loan.<\/li>\n<\/ul>\n<p><!-- \/wp:list --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>If you truly want to get the best deal out of your car purchase, you\u2019re going to have to negotiate IWT style.<\/p>\n<p><!-- wp:heading --><\/p>\n<h2 id=\"3\">How to afford a car by negotiating the price<\/h2>\n<p><!-- \/wp:heading --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Negotiate mercilessly with dealers. And if you\u2019re not willing to negotiate, learn how to.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>I\u2019ve never seen as many people make bad purchasing decisions as when they\u2019re in a car dealer\u2019s office. If you\u2019re NOT there to play hardball, dealers are going to see that and take advantage of you. It\u2019s their job to do that. And they have years of practice before you ever walk in the door.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Luckily, you have one powerful chip in your stack: the dealer\u2019s quotas.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>The best time to buy a car <u><a href=\"https:\/\/www.iwillteachyoutoberich.com\/blog\/best-time-of-year-to-buy-a-car\/\" target=\"_blank\" rel=\"noopener noreferrer\">is in December<\/a><\/u>. That\u2019s the month when dealers all over the country are desperate to hit their annual quotas.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>This gives you an advantage when you come in to negotiate a car in that month.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Here\u2019s another tip: Have the dealers <em>fight <\/em>over you.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>When I decided to get a car in my last year in college, I contacted over a dozen dealerships, told them exactly what kind of car I wanted, and said I\u2019d go with the lowest price offered to me.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>And guess what? The offers came in like an AVALANCHE. I remember brewing up a cup of tea, and watching my fax machine (Don\u2019t make fun \u2014 this was a while ago!) light up as different car dealerships tried to convince me to buy from them. It resulted in a bidding war that led to me landing a car for $2,000 under invoice.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Try that technique out for yourself. Also, make sure you practice and study for the negotiation. Here are some of my best resources about that:<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:list --><\/p>\n<ul>\n<li><u><a href=\"https:\/\/www.iwillteachyoutoberich.com\/blog\/best-time-of-year-to-buy-a-car\/\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>The best time of year to buy a car<\/strong><\/a><\/u><\/li>\n<li><u><a href=\"https:\/\/www.iwillteachyoutoberich.com\/blog\/cost-vs-value-should-you-buy-a-new-car-or-used-car\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Cost vs Value: Should you buy a new or a used car?<\/strong><\/a><\/u><\/li>\n<\/ul>\n<p><!-- \/wp:list --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Also be sure to check out my video on buying a car below.<span style=\"font-family: 'PP Mori', 'PP Mori'; font-size: 40px; font-weight: 600; letter-spacing: 0px; color: inherit;\">\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-266d09f elementor-widget elementor-widget-video\" data-id=\"266d09f\" data-element_type=\"widget\" data-e-type=\"widget\" data-settings=\"{&quot;youtube_url&quot;:&quot;https:\\\/\\\/www.youtube.com\\\/watch?v=QR_Zrq5dPbs&quot;,&quot;video_type&quot;:&quot;youtube&quot;,&quot;controls&quot;:&quot;yes&quot;}\" data-widget_type=\"video.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-wrapper elementor-open-inline\">\n\t\t\t<div class=\"elementor-video\"><\/div>\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-d382ef7 elementor-widget elementor-widget-heading\" data-id=\"d382ef7\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"elementor-heading-title elementor-size-xl\">The world wants you to be vanilla...<\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-7fee11f elementor-widget elementor-widget-text-editor\" data-id=\"7fee11f\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>\u2026but you don\u2019t have to take the same path as everyone else. How would it look if you designed a Rich Life on your own terms? Take our quiz and find out: <!-- notionvc: 65ccf443-9354-42c0-9d05-e69b4e0b5a8c --><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-7f734f5 elementor-widget elementor-widget-button\" data-id=\"7f734f5\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"button.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<div class=\"elementor-button-wrapper\">\n\t\t\t\t\t<a class=\"elementor-button elementor-button-link elementor-size-sm\" href=\"https:\/\/www.iwillteachyoutoberich.com\/rich-life-quiz\/\">\n\t\t\t\t\t\t<span class=\"elementor-button-content-wrapper\">\n\t\t\t\t\t\t\t\t\t<span class=\"elementor-button-text\">Take the Quiz<\/span>\n\t\t\t\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-7ca81193 elementor-widget elementor-widget-text-editor\" data-id=\"7ca81193\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><!-- wp:paragraph --><\/p>\n<p><!-- \/wp:list --><\/p>\n<h2 id=\"4\">The dos and don\u2019ts of buying a car<\/h2>\n<p><!-- \/wp:heading --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>When you start your car buying journey, be sure to keep in mind my four dos and don&#8217;ts about buying a car:<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:heading {\"level\":3} --><\/p>\n<h3><strong>DO buy for the long haul<\/strong><\/h3>\n<p><!-- \/wp:heading --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>A lot of people want to prioritize how a car <em>looks <\/em>over anything else. What color is it going to be? Two-door or four? Can a spoiler be too big?<\/p>\n<p><!-- \/wp:html --><\/p>\n<p><!-- wp:image {\"align\":\"none\",\"id\":26081,\"className\":\"wp-image-26081 size-medium\"} --><\/p>\n<figure class=\"wp-block-image alignnone wp-image-26081 size-medium\"><img decoding=\"async\" class=\"wp-image-26081 aligncenter\" src=\"https:\/\/www.iwillteachyoutoberich.com\/wp-content\/uploads\/image2-13-300x210.png\" alt=\"\" \/>\n<p>\u00a0<\/p>\n<figcaption>Never.<\/figcaption>\n<\/figure>\n<p><!-- \/wp:image --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>But you should really prioritize getting a good, reliable car that you\u2019ll be able to drive around for <em>at least <\/em>10 years.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Why? Cars are a long-term investment. This isn\u2019t like a pair of shoes you\u2019re going to wear for a year or two before getting a new pair. A car costs a HUGE amount of money. You\u2019re going to want to get one that lasts a while since it\u2019s only going to get worse and less valuable over time.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Here\u2019s a complicated graph explaining this.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:image {\"id\":26082} --><\/p>\n<figure class=\"wp-block-image\"><img decoding=\"async\" class=\"wp-image-26082\" src=\"https:\/\/www.iwillteachyoutoberich.com\/wp-content\/uploads\/image1-22-e1526410222122.png\" alt=\"\" \/><\/figure>\n<p><!-- \/wp:cover --><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-adad59c elementor-widget elementor-widget-video\" data-id=\"adad59c\" data-element_type=\"widget\" data-e-type=\"widget\" data-settings=\"{&quot;youtube_url&quot;:&quot;https:\\\/\\\/youtu.be\\\/PuN6gVK3IyA&quot;,&quot;video_type&quot;:&quot;youtube&quot;,&quot;controls&quot;:&quot;yes&quot;}\" data-widget_type=\"video.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-wrapper elementor-open-inline\">\n\t\t\t<div class=\"elementor-video\"><\/div>\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-c1833bb elementor-section-boxed elementor-section-height-default elementor-section-height-default qodef-elementor-content-no\" data-id=\"c1833bb\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-33ec786\" data-id=\"33ec786\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-b02b9b0 elementor-widget elementor-widget-text-editor\" data-id=\"b02b9b0\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<h3><strong>DO find deals for graduates <\/strong><\/h3>\n<p><!-- \/wp:heading --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Plenty of dealerships have great programs for recent grads looking for new cars. These often come in the form of rebates or specialty financing.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Two ways to find these deals:<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:list --><\/p>\n<ul>\n<li><strong>Google it.<\/strong> This should really be the first step to anything. Do a simple Google search for recent-graduate car incentive program. Actually, <u><a href=\"http:\/\/lmgtfy.com\/?q=new+graduate+car+incentives\" target=\"_blank\" rel=\"noopener noreferrer\">I\u2019ll just do it for you<\/a><\/u>. You\u2019ll also want to specify your city to see your local deals.<\/li>\n<li><strong>Ask the dealer. <\/strong>When you\u2019re negotiating with your dealership, be sure to ask them what they offer in the way of new graduate car incentives.<\/li>\n<\/ul>\n<p><!-- \/wp:list --><\/p>\n<p><strong style=\"font-family: 'PP Mori', 'PP Mori'; font-size: 32px; letter-spacing: 0px;\">DON\u2019T think you need a used car<\/strong><\/p>\n<p><!-- \/wp:heading --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Buying used isn\u2019t the only way to save money on a car. Over the long term, a new car might actually end up saving you money if you:<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:list {\"ordered\":true} --><\/p>\n<ol>\n<li>Pick the right new car<\/li>\n<li>Negotiate a low price<\/li>\n<li>Drive it for a long time<\/li>\n<\/ol>\n<p><!-- \/wp:list --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>I\u2019d rather you get a new car that\u2019s reliable than purchase a used car that\u2019ll break down sooner.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:heading {\"level\":3} --><\/p>\n<h3><strong>DON\u2019T break from your budget<\/strong><\/h3>\n<p><!-- \/wp:heading --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Set a realistic goal budget for your car and don\u2019t go over it. Other expenses will come up \u2014 maybe car related, maybe not. You don\u2019t want to end up struggling because you can\u2019t afford your monthly car payment.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>You don\u2019t have to worry about stretching, though, if you have one thing in place: A Conscious Spending Plan.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:heading --><\/p>\n<h2 id=\"5\">How to save money for a car<\/h2>\n<p><!-- \/wp:heading --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>You can make sure you have even more money to get the car of your dreams by implementing a Conscious Spending Plan.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>The typical way people look at saving money for a big purchase like a car typically goes like this:<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:list --><\/p>\n<ul>\n<li><strong>Step 1: <\/strong>Stop purchasing the things we love like lattes to save money.<\/li>\n<li><strong>Step 2: <\/strong>Spend money anyway on other things.<\/li>\n<\/ul>\n<p><!-- \/wp:list --><\/p>\n<p><!-- wp:list --><\/p>\n<ul>\n<li><strong>Step 3: <\/strong>Go back to buying lattes.<\/li>\n<li><strong>Step 4: <\/strong>Feel bad. Repeat the first step.<\/li>\n<\/ul>\n<p><!-- \/wp:list --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>That\u2019s where the Conscious Spending Plan comes in. This is the exact same system my friend used to spend<em> five grand a year<\/em> on shoes.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>I can feel your eye-rolling judgement through the computer screen now. How can anyone in their right mind spend so much on shoes each year?<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Well consider this:<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:list {\"ordered\":true} --><\/p>\n<ol>\n<li>She makes a healthy salary.<\/li>\n<li>She doesn\u2019t spend much on other things.<\/li>\n<li>She has a system in place that allows her to know exactly how much she can spend each month.<\/li>\n<\/ol>\n<p><!-- \/wp:list --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>But most importantly: She just LOVES shoes.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>And her system allows her to buy 10 to 15 pairs of shoes each month \u2014 each of them costing around $300 &#8211; $500 a pair.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>After investing in her 401k and paying off her fixed monthly payments like rent and utilities, why wouldn\u2019t she use her money to buy the things she loves?<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>You can use the same system to buy a car. Imagine being able to walk into the dealer and driving off the lot in the car of your dreams, resting easy in the fact that you were able to pay for it.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>That\u2019s why I want to offer you a free chapter of my New York Times best-selling book &#8220;I Will Teach You To Be Rich.&#8221;<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>In it, you\u2019ll find the exact system you can use that\u2019ll help you both earn more money and start saving for an awesome car.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:heading --><\/p>\n<h2 id=\"FAQs\">FAQs About\u00a0How Much Car Can You Afford<\/h2>\n<p><!-- \/wp:heading --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<h4>How can I stick to my budget when buying a car?<\/h4>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>When you&#8217;re buying a car, it&#8217;s important to stick to your budget. If you decide to use the 20\/4\/10 rule, get preapproved for a car loan that fits into that budget before you shop for a car. When you go shopping, be sure to let the seller know that you&#8217;ll be sticking to your budget, and only consider cars that fall into that price category. This way, you won&#8217;t waste time or money on vehicles that are outside of your price range.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<h4>How much car can I afford based on my salary?<\/h4>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>One of the most common mistakes car buyers make is confusing gross income with net income, which can cause them to spend more than they can really afford.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>If you&#8217;re looking to buy a new car, it&#8217;s best to keep your car payment under 10-15% of your take-home pay. To figure out how much you can spend on a car, look at your net income\u2014not gross income.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>Gross income is the amount you make before taxes or other deductions are taken out. Net income is what you actually have left over after all taxes have been paid and any other expenses have been taken care of.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<h4>How much should I budget for a car if I want to pay cash?<\/h4>\n<p><!-- \/wp:paragraph --><\/p>\n<p><!-- wp:paragraph --><\/p>\n<p>One thing that can be helpful is to follow the 35% rule. This rule says that you shouldn&#8217;t spend more than 35% of your yearly income on a car. So, if you make $100,000, you shouldn&#8217;t spend more than $35,000 on a car.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-1912e06 elementor-section-boxed elementor-section-height-default elementor-section-height-default qodef-elementor-content-no\" data-id=\"1912e06\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-52d1745\" data-id=\"52d1745\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-9964c79 elementor-widget elementor-widget-qi_addons_for_elementor_blockquote\" data-id=\"9964c79\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"qi_addons_for_elementor_blockquote.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"qodef-shortcode qodef-m qodef-qi-blockquote qodef-layout--top qodef--\">\n\t\t\t\t<h4 class=\"qodef-m-text\">\n\t\t\tIf you liked this post, you\u2019d LOVE my Ultimate Guide to Personal Finance\t\t<\/h4>\n\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-61068e2 elementor-widget elementor-widget-text-editor\" data-id=\"61068e2\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>It\u2019s one of the best things I&#8217;ve published, and totally free \u2013 just tell me where to send it:<!-- notionvc: 35abcb0b-a601-4726-9376-b6c2f03679a7 --><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-2a9fb19 elementor-section-boxed elementor-section-height-default elementor-section-height-default qodef-elementor-content-no\" data-id=\"2a9fb19\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-dbf2158\" data-id=\"dbf2158\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-4fa8277 elementor-widget elementor-widget-qi_addons_for_elementor_wp_forms\" data-id=\"4fa8277\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"qi_addons_for_elementor_wp_forms.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"qodef-shortcode qodef-m qodef-qi-wp-forms\">\n\t<div class=\"wpforms-container wpforms-container-full\" id=\"wpforms-53519\"><form id=\"wpforms-form-53519\" class=\"wpforms-validate wpforms-form\" data-formid=\"53519\" method=\"post\" enctype=\"multipart\/form-data\" action=\"\/wp-json\/wp\/v2\/posts\/53231\" data-token=\"c92d652b05bf919027240a3793b6d704\" data-token-time=\"1779993451\"><noscript class=\"wpforms-error-noscript\">Please enable JavaScript in your browser to complete this form.<\/noscript><div class=\"wpforms-field-container\"><div id=\"wpforms-53519-field_18-container\" class=\"wpforms-field wpforms-field-hidden\" data-field-type=\"hidden\" data-field-id=\"18\"><input type=\"hidden\" id=\"wpforms-53519-field_18\" name=\"wpforms[fields][18]\" value=\"https:\/\/www.iwillteachyoutoberich.com\/c-fyfpi\/\"><\/div><div id=\"wpforms-53519-field_1-container\" class=\"wpforms-field wpforms-field-hidden\" data-field-type=\"hidden\" data-field-id=\"1\"><input type=\"hidden\" id=\"wpforms-53519-field_1\" name=\"wpforms[fields][1]\" value=\"34.92.157.226\"><\/div><div id=\"wpforms-53519-field_2-container\" class=\"wpforms-field wpforms-field-hidden\" data-field-type=\"hidden\" data-field-id=\"2\"><input type=\"hidden\" id=\"wpforms-53519-field_2\" name=\"wpforms[fields][2]\"><\/div><div id=\"wpforms-53519-field_3-container\" class=\"wpforms-field wpforms-field-hidden\" data-field-type=\"hidden\" data-field-id=\"3\"><input type=\"hidden\" id=\"wpforms-53519-field_3\" name=\"wpforms[fields][3]\"><\/div><div id=\"wpforms-53519-field_4-container\" class=\"wpforms-field wpforms-field-hidden\" data-field-type=\"hidden\" data-field-id=\"4\"><input type=\"hidden\" id=\"wpforms-53519-field_4\" name=\"wpforms[fields][4]\"><\/div><div id=\"wpforms-53519-field_5-container\" class=\"wpforms-field wpforms-field-hidden\" data-field-type=\"hidden\" data-field-id=\"5\"><input type=\"hidden\" id=\"wpforms-53519-field_5\" name=\"wpforms[fields][5]\"><\/div><div id=\"wpforms-53519-field_6-container\" class=\"wpforms-field wpforms-field-hidden\" data-field-type=\"hidden\" data-field-id=\"6\"><input type=\"hidden\" id=\"wpforms-53519-field_6\" name=\"wpforms[fields][6]\"><\/div><div id=\"wpforms-53519-field_7-container\" class=\"wpforms-field wpforms-field-hidden\" data-field-type=\"hidden\" data-field-id=\"7\"><input type=\"hidden\" id=\"wpforms-53519-field_7\" name=\"wpforms[fields][7]\"><\/div><div id=\"wpforms-53519-field_12-container\" class=\"wpforms-field wpforms-field-hidden\" data-field-type=\"hidden\" data-field-id=\"12\"><input type=\"hidden\" id=\"wpforms-53519-field_12\" name=\"wpforms[fields][12]\" value=\"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/posts\/53231\"><\/div><div id=\"wpforms-53519-field_13-container\" class=\"wpforms-field wpforms-field-hidden\" data-field-type=\"hidden\" data-field-id=\"13\"><input type=\"hidden\" id=\"wpforms-53519-field_13\" name=\"wpforms[fields][13]\" value=\"53519\"><\/div><div id=\"wpforms-53519-field_15-container\" class=\"wpforms-field wpforms-field-hidden\" data-field-type=\"hidden\" data-field-id=\"15\"><input type=\"hidden\" id=\"wpforms-53519-field_15\" name=\"wpforms[fields][15]\" value=\" \/ FYFPI Guide\"><\/div><div id=\"wpforms-53519-field_14-container\" class=\"wpforms-field wpforms-field-hidden\" data-field-type=\"hidden\" data-field-id=\"14\"><input type=\"hidden\" id=\"wpforms-53519-field_14\" name=\"wpforms[fields][14]\" value=\"{entry_page}\"><\/div><div id=\"wpforms-53519-field_10-container\" class=\"wpforms-field wpforms-field-name\" data-field-type=\"name\" data-field-id=\"10\"><label class=\"wpforms-field-label wpforms-label-hide\" for=\"wpforms-53519-field_10\">First Name <span class=\"wpforms-required-label\">*<\/span><\/label><input type=\"text\" id=\"wpforms-53519-field_10\" class=\"wpforms-field-medium wpforms-field-required\" name=\"wpforms[fields][10]\" placeholder=\"First Name\" required><\/div><div id=\"wpforms-53519-field_11-container\" class=\"wpforms-field wpforms-field-email\" data-field-type=\"email\" data-field-id=\"11\"><label class=\"wpforms-field-label wpforms-label-hide\" for=\"wpforms-53519-field_11\">Email <span class=\"wpforms-required-label\">*<\/span><\/label><input type=\"email\" id=\"wpforms-53519-field_11\" class=\"wpforms-field-medium wpforms-field-required\" data-rule-restricted-email=\"1\" name=\"wpforms[fields][11]\" placeholder=\"Email Address\" spellcheck=\"false\" required><\/div><\/div><!-- .wpforms-field-container --><div class=\"wpforms-submit-container\" ><input type=\"hidden\" name=\"wpforms[id]\" value=\"53519\"><input type=\"hidden\" name=\"page_title\" value=\"\"><input type=\"hidden\" name=\"page_url\" value=\"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/posts\/53231\"><input type=\"hidden\" name=\"url_referer\" value=\"http:\/\/www.iwillteachyoutoberich.com\/find-out-how-much-car-you-can-afford-with-20-40-10-rule\/\"><button type=\"submit\" name=\"wpforms[submit]\" id=\"wpforms-submit-53519\" class=\"wpforms-submit\" data-alt-text=\"Sending...\" data-submit-text=\"Give Me My Free Guide\" aria-live=\"assertive\" value=\"wpforms-submit\">Give Me My Free Guide<\/button><\/div><\/form><\/div>  <!-- .wpforms-container --><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>How much car can you afford depends on your financial situation. See this easy trick to estimate how much you need  \u2014 and how to save for it.<\/p>\n","protected":false},"author":8,"featured_media":92618,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","om_disable_all_campaigns":false,"_lmt_disableupdate":"no","_lmt_disable":"","_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[160],"class_list":["post-53231","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-personal-finance"],"acf":[],"aioseo_notices":[],"modified_by":null,"_links":{"self":[{"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/posts\/53231","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/comments?post=53231"}],"version-history":[{"count":0,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/posts\/53231\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/media\/92618"}],"wp:attachment":[{"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/media?parent=53231"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.iwillteachyoutoberich.com\/wp-json\/wp\/v2\/categories?post=53231"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}