I’m trying to figure out a reasonable percentage of my income to allocate towards a car loan. What guidelines or rules of thumb should I consider to ensure I’m managing my budget effectively?
Honestly, it’s a tricky one because everyone’s situation is different. They say 10% to 15% of your take-home pay is a good rule of thumb for a car payment, but honestly, it depends on your overall financial picture. Like, if you’ve got a lot of other debts, you might want to aim lower so you’re not too strapped for cash. Plus, don’t forget to factor in insurance, maintenance, and fuel costs, because those can add up quick. At the end of the day, as long as you’re comfortable and not putting yourself in a tight spot every month, you should be good!