Why not? It’s your dream. Besides, you now got a regular job. (Yeah!)
A car, whether it’s brand new or second-hand/previously-owned, is an “asset” that will build your reputation as a “someone who has” in your neighborhood.
The sweaty days of riding the jeepney or getting extracted like lemon inside the MRT from Cubao to Ayala will soon be over!
Thank God! Hallelujah! A new car! How about that!
Your Employment Probationary Period is Over! You’re Now A Regular!
So your friends and officemates drive their Civics, their Tucsons, their Vioses, their “owner-type” jeeps. Vehicles that have 4 wheels.
You believe it’s time to replace your 2-wheeled horse (motorcycle) because you got your salary adjusted upwards. Your boss can not terminate you anymore even if you make face and smile like a dog to her. You’ve won!
So should you visit OLX or Carmudi websites and look for the best and most affordable hulugan (installment-based) car offer in town today? Or probably borrow P100,000 from your sibling working abroad so you could immediately buy that second-hand Corolla being sold by a politiko neighbor?
Here are the following questions you need to ask yourself first before deciding to dial that phone to call your car sales agent or a neighbor who posted the ad:
1) Have you paid your personal debts in full to your officemate or friend or SSS or Mr. Singh? List down all your debts and make sure that you don’t borrow again to satisfy your wants. How much is your utang again?
2) Have you insured your arms and legs and nose? It doesn’t matter whether your married or single. Get yourself an insurance. Term life insurance is a good option as it is more affordable (less than P10k per year). But make sure that your total insurance coverage would be equal to at least 10 times your yearly expenses.
For example, if you are spending P15,000 per month, multiply that by 12 months = P180,000, then multiply that by 10 years = P1,800,000. That’s more or less the insurance coverage amount that you need.
3) Are saving up for your emergency fund? You should be keeping cash either at least in a savings account or a high-yield time deposit account that is equal to 6 to 12 months of your household/personal expenses. Keeping an emergency fund (or Sleep Well At Night [SWAN] Fund) will lessen your headache when an unexpected event comes (hint: name a supertyphoon)
4) Are you aware about investing? Do you know what stocks, mutual funds, money market, bonds, and other financial instruments are? If you don’t know anything about all these appreciating vehicles, then you better take a closer look at them. They are more awesome than the depreciating vehicles that you’re salivating at right now.
Study and learn about them. After you’ve gain basic knowledge about these, save at least 20% of your salary every month and decide what investment vehicle fits your goal of buying that dream car of yours.
If you said NO to any of the four questions above, then postpone your desire to buy that second-hand car. Save up and invest for it. Besides, you’ll just add up to the already life-threatening city traffic and air pollution.
I’m telling you, it’s sweeter to buy a your first car in cash. Buy now a depreciating vehicle or an appreciating vehicle? Think about it.
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