This piece is part of my 2016–2026 archive migration. Some original formatting, content, and external links may be missing, changed, or not be optimized.
How much cash are you burning every month?
Having a car note is not the end of the world. In many cases, it’s an intelligent decision versus throwing all of your cash away on a liability.
No need to sugarcoat reality, though. A car note is cash-burning on wheels. If your car is not bringing you income, unless you need it to drive to work, it’s not financially benefiting you.
What Does A Car Note Cost You?
According to Bankrate, the average car note costs between $500-$700.
Eeeeeeeeeek.
This kind of cash disposal is okay if you can afford it, but can you?
If people had fewer car notes, they would have more disposable cash for investments – creating more passive income, a larger net worth, and financial independence.
Before You Finance A Car, Check A Couple Of Things:
Emergency Fund: Do you have an emergency fund in place? If you do, it needs to be a minimum of 6–12 months.
F*ck Off Savings: Are you on track to have your ideal amount of money saved by x date and x age? If not, hold off on the overpriced car note.
Multiple Income Sources: Do you have more than one source of income? I say go for ten, but always maintain a minimum of two. Never leave your finances in the hands of one income source.
Is The Need Legitimate: How much do you need the car? Do you have transportation now? Do you even require transportation (maybe you work remotely)? How many cars are currently in your household? Can you make do with one car and Ubers or public transportation if necessary?
When you get a car, cover your bases. There is nothing wrong with making a car purchase; it only creates a harmful situation when you can’t afford it.
Keep The Car Expenses 10% Or Less Of Your Income
Car expenses include car notes, insurance, maintenance, repairs, gas, and electricity. All of these expenses should never exceed 10% of your monthly income. If you want to be more aggressive, make it so that your car expenses don’t exceed 5% of your monthly income.
Too many people have car payments that take up 15–30% or more of their total monthly income. What kind of bullsh*t is that? All for a car? No, thank you.
Keeping the car expenses low keeps the stress low.
Be open to used or lower-priced new cars if your preference is new.
If everything checks out for you financially, before that car purchase, go ahead and get the dream car; it won’t hurt you since everything else is in order.
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.