Critique my plan please
-
I recently inherited close to 300K from my father’s passing. I bought a new car that is around 35K with tax, extended service plan, and gap insurance.
I purchased a new car at 0% for 3 years. I would have gone for a longer loan time but 36 months is all they offered.
I plan on opening a high yield checking account (suggestions welcome) and fund it with 4 months worth of payments. Then I will open the following CD’s
One three month (suggestions welcome)
One six month (suggestions welcome)
One twelve month (suggestions welcome)
One twenty four month (suggestions welcome)
and I will use the principal in the cd to continue to fund the payment account the car payments are comming out.
-
The top savings accounts are around 2.5%. I wouldn’t tie up money in a CD unless the rate was significantly higher. I would keep a small amount in checking which isn’t going to yield much anyway, and transfer in from savings when you need it.
-
How much are your car payments going to be?
-
@jtownsucks46 said in Critique my plan please:
How much are your car payments going to be?
The F&I guy said it would be $919 a month for 36 months.
-
@atikovi said in Critique my plan please:
The top savings accounts are around 2.5%. I wouldn’t tie up money in a CD unless the rate was significantly higher. I would keep a small amount in checking which isn’t going to yield much anyway, and transfer in from savings when you need it.
Yes the top savings now are 2.5% but what is the guarantee the rate will go up?
-
@mannylnj said in Critique my plan please:
@atikovi said in Critique my plan please:
The top savings accounts are around 2.5%. I wouldn’t tie up money in a CD unless the rate was significantly higher. I would keep a small amount in checking which isn’t going to yield much anyway, and transfer in from savings when you need it.
Yes the top savings now are 2.5% but what is the guarantee the rate will go up?
That’s been the trend for over a year now but there is no guaranty.
-
My critique with your plan is that you should have bought a used car for a lot less money.
But alas, too late for that.
So my critique with something you did that you could hopefully change is to get rid of the gap insurance. Your loan term is short enough that there shouldn’t be much of a gap. Regardless, you have the cash to cover the gap if something happens, so you didn’t need the insurance.I also don’t see that much of a point in anything other than a no-penalty CD that pays more than the prevailing savings rate. There isn’t enough of a benefit rate-wise to lock up any money for 2 years as far as I can tell. Do the calculations and you’ll probably see that the difference isn’t worth the effort.
-
@meed18 My wife did not want me to buy a used car. If we were going to go the used car route I would have spent the money to fix the small issues but as they say a happy wife, happy life.
So what we ended up doing was the Money Market and Checking at All American Bank 3.0 on the checking and 2.5 on the money market
-
You should not regret your new car decision at all. While the initial cost is higher, it will last longer, problem free longer and you will enjoy the latest bells and whistles. But hopefully we won’t turn this into a new card discussion thread.
The main thing that I want to point out is that your plan without having details of your income, age, retirement planning details is hard to bless. When I was young, I split my retirement contribution into a fixed income fund and a stock fund - 50-50. The stock fund completely out-shined the fixed income fund and I ended up moving everything to the stock fund and have never looked back - all my money is invested in stocks - I have always taken the long term view and would half my current net worth if I had not been investing in the market for the long haul. If you are young and don’t seem to have an immediate plan for that money, I would definitely be thinking about some ETF funds - set aside the money for your car payments in a safe high yield account if you have to, but the rest should go towards ensuring that you fully fund your Roth IRA ( even if you have to backdoor Roth), fully fund 401K, and rest in ETF’s. Also, if you don’t have a house, buying a house may factor in somewhere too.
-
If u have the cash. It might have been better to take the rebate instead of the zero financing. But im not there. So i didnt see the numbers.
-
Thread is mislabeled. We’re to judge the results not the plan.
-
If your wife wanted to buy a brand new RV with 100% of your inheritance, would you still say “happy wife happy life?” I sure hope not. You are your wife need to talk to more people who have met their savings goals. I guarantee none of them would recommend buying a new car… alas, that ship has sailed.
Did you get rid of the gap insurance at least?
-
As someone may have said, open up a high-yield checking account with Ally. I think their rates are above 2.15%. Free to open and no fees. You could honestly put a decent chunk of your money in there and watch it grow.
I’ve used it a small bit and its good if you want to leave some money in.
