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The homeownership rate in America peaked at a little more than 69% in 2004 before falling to 63.7% in 2016, according to U.S. Census data. Despite the fact that it has rebounded to a little more than 65% in 2019 overall, only 36.4% of Americans younger than 35 own their homes. It may be easier in some places, though, for this young cohort to buy homes. To that end, SmartAsset crunched the numbers to find the cities where people younger than the age of 35 are most likely to own their own home – and to see where this number has gone up in recent years.
To find the cities where more under-35 residents are buying homes, we compared the homeownership rate for this demographic in 2009 with the homeownership rate in 2019 for 200 of the largest U.S. cities. For details on our data sources and how we put all the information together to create our final rankings, check out the Data and Methodology section below.
- Young homeownership has decreased overall since 2009. While there are plenty of cities where homeownership among younger residents has increased, over the past decade the under-35 homeownership rate decreased by 3.71%, on average, across the 200 cities we analyzed.
- Under-35 homeownership lags compared to that of older generations, particularly in large cities. Though some two-thirds of all Americans owned their homes in 2019, just one-fourth (26.15%) of residents younger than 35 did in the 200 cities we analyzed. Homeownership rates are particularly low for the under-35 set in America’s largest cities: of the 10 with the highest populations, nine are in the bottom half of the study for 2019 homeownership rate (only Phoenix cracks the top half at No. 67), and all 10 had decreasing homeownership rates from 2009 to 2019, with six out of 10 — Phoenix, San Jose, Philadelphia, Dallas, Houston, Chicago — ranking in the bottom half of the study for change in homeownership rate from 2009 to 2019.
1. Midland, TX
Midland, Texas has seen a 10-year increase of 17.11 percentage points in the homeownership rate among people younger than 35, the largest growth seen in this study. The total homeownership for that age cohort in 2019 was 52.42%, the fourth-highest rate we analyzed for that metric. Together, this makes Midland the top place where more young residents are buying homes.
2. Cape Coral, FL
The homeownership for younger Cape Coral, Florida residents in 2019 was 55.54%, the third-highest rate in the study for this metric. That’s an increase of 8.71 percentage points compared to 2009, the fourth-highest increase for this metric across all 200 cities we considered.
3. Joliet, IL
Joliet, Illinois, located about 30 miles southwest of Chicago, had a homeownership rate of 63.48% for under-35 residents in 2019, the highest rate of all the cities we studied. Joliet ranks ninth for the 10-year change in homeownership, increasing 5.48 percentage points from its 2009 rate of 58.00%.
4. Mesquite, TX
Mesquite, Texas is part of the Dallas metro area, and in 2019, the homeownership rate among residents younger than 35 was 45.46%. That ranks 11th in our study, but in 2009 the rate was just 35.47%, meaning the increase over 10 years was 9.99 percentage points, third place for this metric.
5. Bakersfield, CA
Bakersfield, in central California, ranks 20th for homeownership rate among younger people in 2019, at 39.75%. That’s a 10.01 percentage point increase over the 10-year period from 2009 to 2019, the second-highest jump for this metric in the study.
6. Aurora, CO (tied)
Aurora, Colorado ranks 15th for the 2019 homeownership rate among people younger than 35, at 42.28%. That is an increase of 5.29 percentage points from 2009, the 10th-largest jump we observed in the study.
6. Port St. Lucie, FL (tied)
Port St. Lucie, Florida has the fifth-highest homeownership rate among younger people in 2019, at 51.93%. It ranks 20th for its increase in that percentage from 2009, at 2.70 percentage points.
8. Gilbert, AZ
Gilbert, Arizona, located near Phoenix, has the eighth-highest homeownership rate among residents younger than 35, at 50.08%. That increased 2.69 percentage points since 2009, good enough for 21st place in that metric.
9. Fort Wayne, IN
Fort Wayne, Indiana ranked 17th in both of the metrics we measured for this study. The homeownership rate among those younger than 35 was 41.24% in 2019, a 3.32 percentage point increase over the previous 10 years.
10. Rancho Cucamonga, CA
The final city in the top 10 of this study is Rancho Cucamonga, California, which ranked 21st for under-35 homeownership in 2019, at 39.39%. That is a 3.77 percentage point jump since 2009, the 14th-biggest increase we observed across all 200 cities in the study.
Data and Methodology
To find the cities where more young Americans are buying homes, SmartAsset examined data for 200 of the largest cities in the U.S. We considered two metrics:
- 2019 homeownership rate for those under 35. This is the homeownership rate among 18- to 34-year-olds. Data comes from the U.S. Census Bureau’s 2019 1-year American Community Survey.
- 10-year change in homeownership rate for those under 35. This compares the homeownership rate among 18- to 34-year-olds in 2009 and 2019. Data comes from the U.S. Census Bureau’s 2009 and 2019 1-year American Community Surveys.
First, we ranked each city in both metrics. Then we found each city’s average ranking and used the average to determine a final score. The city with the highest average ranking received a score of 100. The city with the lowest average ranking received a score of 0.
Tips for Buying a Home
- Never too old for some expert guidance. No matter what age you are, buying a home is a big step, and a financial advisor can help you get ready to take it. Finding the right financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
- Meticulous mortgage management. Chances are you’ll need a mortgage to facilitate buying your home. Use SmartAsset’s free mortgage calculator to see what your monthly payments might be based on your financing rate and down payment.
- Taxes don’t always have to be taxing. If you’re moving to one of the cities on this list, your tax burden might change. Use SmartAsset’s free income tax calculator to see what you’d owe the government each year if you pick up stakes and move.
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As more Americans turn to home cooking and entertaining, the functionality of a kitchen is more important than ever when choosing a home.
Over the past half-century, kitchens have become somewhat fetishized; a place to display high-tech appliances and high design cookware, a social hub for friends and family, and a continuation of home style that showcases elegance and considered design choices. Pare it back to basics, though, and today’s kitchen is still essentially what it always has been: a place to prepare food. And homeowners, spurred recently by stay-at-home orders, but also inspired by home-cooking television shows, health concerns and the rising expense of dining out, are increasingly relying on their kitchens in times when eating out is not an option, as well as using their kitchens as additional entertainment space; somewhere to try their hand at cooking for their friends and family. For house hunters who relish the opportunity to regularly entertain and prepare food for guests, it pays to know what to look for when assessing kitchen space during your house search—and the best person to ask is an expert.
Edouard Massih is a private chef and caterer in New York City. He hosts intimate dinners in his own home, giving local diners the experience of enjoying his food in a less formal, more personal way. Massih, who was born in Lebanon, found his love for cooking in his grandmother’s kitchen. Sharing food and creating community has always been the driving force behind Massih’s cooking, and he has discovered a way to do that in his own backyard—literally.
“I wanted to invite people into my backyard, because I had a very unique space in Brooklyn, and not a lot of people [in New York] get to have dinners in a backyard,” Massih says. To bring to life his vision of cooking for the community, Massih extensively renovated his Greenpoint backyard, creating a lush urban escape where guests can enjoy the exquisite food that he prepares in his own kitchen—each dish enhanced by a dash of his grandfather’s olive oil, all the way from Lebanon.
Having worked on his kitchen to ensure that it had everything that he needed to support his at-home dining experiences, Massih has the knowledge of both a professional chef and a home cook. We asked him for some tips to help aspiring culinary hosts to choose the right kitchen space, starting with the five kitchen elements that he finds to be indispensable. First, Massih says, is “the right fridge, or the right fridge space.” Part of taking the pressure off yourself when entertaining, he says, is making sure that you’re prepared in advance. “Entertaining is all about making it simple for yourself when people are there— being able to prep ahead and batching the drinks; having the pitchers of water ready in the fridge; and having everything ready to go. Maybe serve more cold stuff than hot. You can do a pasta salad and an orzo salad, and make it two hours in advance.”
Preparing food in advance, chilling drinks and ensuring that all of your produce is fresh all comes down to having the right fridge. And while interactive fridges with weather forecasts and recipe databases can be useful, the main thing is space—and plenty of it. If you want to get fancy, you could go for a hot-water dispenser and temperature-adjustable drawers, both of which assist in various cooking processes; just make sure that you have enough shelf space to hold all of the food and beverages that you’ve prepped for your guests.
Because you can’t make a lot of food without creating a lot of mess, Massih insists that having two sinks is vital: one dedicated to food prep, and one to cleanup. You can keep your prep equipment near your prep sink (think bowls, colanders, appliances), and dishes near the cleanup sink (which should ideally be close to the dishwasher). In addition, having two sinks creates more flexibility for multiple cooks, and streamlines the flow while you’re cooking.
The third must-have for Massih is “a lot of prep area—lots of counter space.” You need space for laying out, preparing and organizing ingredients, which most people consider when thinking about counter space; but if you’re planning on entertaining groups of diners, you also need enough counter space to plate all of the meals at once. Nobody wants to be balancing plates on top of kitchen stools because there’s not enough room for everything on the countertop.
Fourth for Massih is storage, in terms of both kitchen cabinets and a decent pantry. You want plenty of space, and also space that complements your cooking flow. Pots and pans should be as close to your stove as possible—either on a rack above or in a cabinet below—and serving utensils like spoons and tongs should be close to where you do your plating, to minimize the number of steps you have to take to collect your cooking tools, which helps with efficiency when you’re cooking for a group of people. A walk-in pantry is ideal, with various shelf sizes and storage options for appliances that are not in regular use. For chefs, there’s nothing worse than a cluttered cooktop.
Lastly, Massih emphasizes the importance of, as he calls it, “legit trash.” “You want a trash can that’s near the sink or accessible around [where you’re working], and not one of those little tiny trash barrels that fits nothing,” he says. “Otherwise, every two minutes, you’ll have to take the trash out when you’re prepping.” Massih also spends a lot of time cooking in other people’s kitchens as part of his catering and private-chef business, and the one feature that he is always delighted to see is a back kitchen.
“What is really nice about some of [the private homes that I cook in] is they have a back kitchen, like the ‘help’ kitchen,” he says. “That really does help a lot. If I [had the resources], and I was looking for a house to entertain in a lot or to do a lot of dinners in, then that’s definitely something that I would look for. “A lot of these kitchens nowadays are very open-plan, because the idea of it is that it’s really fun. But it gets annoying when you’re [hosting] a formal dinner, and you can’t do dishes [or hide them away] while your guests are eating. Having a small back kitchen really helps, because then you can hide all of the stuff that you don’t want people to see.”
There’s nothing wrong with a kitchen as a style statement, and most people whose interests lie in kitchens will admit to some fetish-like reverence. Just keep practical concerns in mind, particularly when you have culinary aspirations; remember, you can have a waterfall countertop AND legit trash. That’s what we call the best of both worlds.
For more information on Edouard Massih and his home-style cooking, visit www.edouardmassih.com.
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There’s nothing like falling in love and finding the person you want to spend the rest of your life with. But when it’s time to shop for rings, it’s easy to get discouraged by the price tags. Just how much should you spend on an engagement ring? We’ll dive into the topic and discuss ways to save on the big purchase.
Find out not: How much do I need to save for retirement?
What the Average Engagement Ring Costs
Maybe you can’t buy love. But if you’re in the market for an engagement ring, you’ll quickly realize that it won’t be cheap. According to the Knot’s 2016 Real Weddings Study, Americans spent an average of $6,163 on engagement rings, up from $5,871 in 2015. Wedding bands for the bride and engagement rings combined cost between $5,968 and $6,258.
If you want your wedding to happen sooner rather than later, keep in mind that on average, couples spend more than $30,000 to tie the knot. That’s roughly how much you can expect to pay for everything from your wedding reception and DJ to your cake and your photographer. Location matters when it comes to weddings, however, so you might be able to save some money by choosing a more affordable place to host your ceremony.
How Much Should I Spend?
Conventional wisdom says that anyone planning to propose to their partner should prepare to spend at least two or three months of their salary on an engagement ring. But spending too much isn’t a good idea for various reasons.
A recent study conducted by Emory University connected pricey rings to divorce rates. Men who spent more money on rings for their fiancees were more likely to end their marriages. That’s a possible long-term consequence of overspending on an engagement ring. In the short term, using a large percentage of your money to buy a ring might prevent you from using those funds to pay bills or stay on top of your debt, which can hurt your credit score.
If the marriage doesn’t work out and your ex-spouse decides to sell their diamond engagement ring, its value won’t be nearly as high as it was when it was first purchased. That’s why diamond rings can be such bad investments.
So exactly how much should you spend on an engagement ring? It’s a good idea to make sure that the price you pay doesn’t prevent you or your partner from accomplishing whatever you’re planning to achieve in the future, whether that’s buying a house or having a child. Rather than following an old-school societal notion that says you should spend x amount of money on a ring, it’s best to spend an amount that won’t compromise your financial goals or jeopardize the status of your relationship.
How to Save on the Ring
If you don’t want the engagement ring you’re buying to break the bank, it’s a good idea to learn as much as you can about the rings and what makes some more expensive than others. Diamonds are the gems most commonly used in engagement rings, and if you’re buying one for your significant other, it’s important to familiarize yourself with what jewelers refer to as the four C’s: clarity, cut, color and carat weight.
In terms of clarity, the best diamonds are flawless, meaning that they don’t have any blemishes when viewed under a microscope with 10 power magnification. Since no one’s eyesight is that powerful, you can get away with choosing a diamond with a lower clarity grade that costs less. Getting a diamond that has fewer carats (meaning that it weighs less) or getting one that isn’t completely colorless can also lower its overall price.
Or don’t get a diamond at all. Your partner might be just as happy with a simple band, a white sapphire or an emerald ring and it probably won’t cost as much as a diamond engagement ring. Shopping for your ring at a vintage store, looking for one online rather than in-person and getting a ring with a series of smaller stones surrounding the center stone (also known as a halo ring) are a few additional ways to save when buying a ring.
There’s no need to spend a fortune on an engagement ring. And you don’t have to feel guilty about cutting corners in order to find one that you can afford to buy.
Like any other major purchase, it’s a good idea to take time to save up for a ring. If you have to take on more credit card debt or a personal loan in order to buy an engagement ring, it’s a good idea to find out how long it’ll take to pay off your debt. It isn’t wise to begin a marriage by digging yourself (and your partner) into a deep financial hole.
Tips for Getting Financially Ready for Marriage
- If you haven’t already, start talking about money. It’s important to establish an open dialogue and make sure you understand and respect each other’s money values.
- You might also consider sit down with a financial advisor before the big day. A financial advisor can help you identify your financial goals and come up with a financial plan for your life as a married couple. A matching tool (like ours) can help you find a person to work with to meet your needs. First you’ll answer a series of questions about your situation and goals. Then the program will narrow down your options from thousands of advisors to three fiduciaries who suit your needs. You can then read their profiles to learn more about them, interview them on the phone or in person and choose who to work with in the future. This allows you to find a good fit while the program does much of the hard work for you.
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How far you live from work, school and other places you frequent can cost you time, money and health. The U.S. Census says that the average commute takes Americans 27.6 minutes each way. That’s more than 240 hours annually, if you commute twice every workday in 2021. And now that many people have cut back their commutes by working from home during the COVID-19 pandemic, you might be thinking about how to save money by carpooling or biking, or you might consider moving to shorten the commuter distance. In either case, SmartAsset examined the largest cities in America to uncover the worst commutes in 2021. Find out how your commute measures up against them.
We compared data from the 100 largest U.S. cities and ranked the worst commutes by six key metrics: commuters as a percentage of workers, average travel time to work, five-year change in average travel time, percentage of workers with a commute of more than 60 minutes, five-year change in percentage of workers with a commute of over 60 minutes, and transportation as a percentage of income. For details on our data sources and how we put all the information together to create our final rankings, check out the Data and Methodology below.
This is SmartAsset’s second study on the worst commutes in America. Check out the 2020 version here.
- California leads the country as the state with the worst commutes. Eight out of the 11 cities on this list are located in the Golden State, averaging 33.6 minutes in travel time to work. Commuters in those cities need twice as long as those with the shortest commute – in Lubbock, Texas, which averages a little more than 16 minutes on a trip to work.
- The overwhelming majority of workers in America are commuters. On average, 94.3% of workers in the 100 largest U.S. cities are commuters, based on the most recently available Census data from 2019. Scottsdale, Arizona has the smallest percentage of commuters, but it still has 82.1% of its workers traveling to their jobs. Newark, New Jersey has the highest percentage, with 98% of workers averaging almost 35 minutes commuting.
- The Midwest still offers better commutes. Cities in Northeastern, Southern and Western states tend to rank in the worst third of the study for their less-than-ideal commutes. While Chicago, Illinois and Cincinnati, Ohio crack the top 35 cities with the worst commutes, all other Midwestern cities rank in the bottom half of the list for their relatively short commutes.
1. Riverside, CA
Ranked as the worst commuting city in America, Riverside, California takes the greatest toll on its workers in transit, with 18.6% of them averaging more than 60 minutes on a trip to work. And data shows that commutes are getting longer, with a 3.7% five-year increase (2014 to 2019) in workers traveling for more than one hour. Riverside commutes average 33.9 minutes each way, and this travel time has also increased 13.38% over the same five years.
2. Stockton, CA
Ranking second-worst, Stockton, California saw an increase of 18.68% in average travel time over the five-year period from 2014 to 2019. Data shows that 17.8% of workers in this Central Valley city average more than 60 minutes on their commute to work, the fifth-highest percentage for this metric across all 100 cities we studied. The average travel time for residents there is 32.4%, ranking 11th overall.
3. Hialeah, CA
Commute times in Hialeah, Florida, a Miami suburb, have spiked more than any other city in the study with a 26.81% jump between 2014 and 2019. Hialeah has also seen the biggest percentage 2014-to-2019 increase for workers commuting longer than 60 minutes, a 6.1% uptick. However, it is important to note that the city’s percentage of commuters is relatively small: With just 91% of all workers traveling to work, this city ranks 90th out of 100 for this metric in our study.
4. Glendale, AZ
Between 2014 and 2019, the number of workers in Glendale, Arizona with commutes longer than an hour increased 5.6%. This is the second-highest uptick for this metric overall. The percentage of workers with a commute longer than 60 minutes is 12.1%, ranking 16th-highest out of 100. Data shows that with 94.9% of Glendale workers commuting, they average 31.5 minutes on each trip.
5. Los Angeles, CA
Los Angeles, California has seen a five-year (2014 to 2019) increase of 3.3% in workers commuting longer than 60 minutes, the ninth-biggest jump for this metric in the study. With 93.5% of the workforce commuting, 15.4% of Angeleno workers need more than one hour each way to their jobs, the 11th-highest percentage for this metric overall. That said, they only spend 7.91% of their income on commuting, ranking 77th out of 100 for this metric.
6. Oakland, CA
Workers in Oakland, California average 34.4 minutes on each trip to work, the seventh-longest travel time in the study. Oaklanders also rank seventh-highest for the percentage of workers with trips longer than 60 minutes, with 16% of them making treks longer than an hour to the office in 2019. However, Oakland has one of the cheapest commutes, as workers there spend only 5.45% of their income on travel to work, the fourth-lowest rate for this metric overall.
7. Fremont, CA
Fremont, California has seen a 4.3% increase in five years for workers commuting longer than 60 minutes on each trip, the fifth-highest in the study. Residents there also have the third-longest travel time, averaging 36.4 minutes on each commute, and the second-largest proportion of the workforce commuting longer than one hour, at 20.2%. Fremont workers, however, spend only 5.45% of their income on travel to work, tying for fourth-lowest for this metric.
8. San Jose, CA
Located in the heart of Silicon Valley, San Jose, California has the most affordable transportation on our list. Workers there spend only 5% of their income on travel to work. Despite those relatively low costs, San Jose still ranks as the eighth-worst commuting city on our list. Workers average 31.7 minutes on each commute, and they have seen a 14.44% increase in travel time over the five-year period from 2014 to 2019. Data also shows that San Jose has seen a 4.8% increase over that time period in commuters traveling more than one hour per trip.
9. San Francisco, CA
San Francisco, California averages 34.7 minutes on each commute, the sixth-longest travel time in the study. The Bay Area city also has one of the largest groups of workers commuting the longest, with 15.7% needing more than 60 minutes to commute one way. That said, San Francisco workers have a relatively affordable commute, as residents there spend only 5.45% of their income on travel for work. The city ties for fourth-lowest out of 100 for this metric.
10. New York, NY (tie)
New York City ties with Long Beach, California for the final spot in the 11 cities where residents have the worst commutes. The average travel time for New Yorkers is 41.7 minutes, the longest travel time in our study. New York City also has the highest percentage of workers who travel more than 60 minutes each way, at 27.2%. Despite the duration, the city ranks 16th-lowest out of 100 for transportation costs, with workers spending less than 8% of their income on commuting.
10. Long Beach, CA (tie)
Long Beach, California ties with New York as the 10th-worst U.S. city for residents’ commutes. Residents there have seen a 2.1% increase over the five-year period from 2014 to 2019 in the number of workers traveling more than one hour to work each day. Long Beach has the 12th-longest commute on our list, averaging 32 minutes for each trip. And 14.9% of the workforce is traveling for longer than 60 minutes during each trip, the 12th-largest for this metric in the study.
Data and Methodology
To find the cities with the worst commutes, we compared the 100 largest cities in the country across the following metrics:
- Commuters as a percentage of workers. Data comes from the Census Bureau’s 2019 1-year American Community Survey.
- Average travel time to work in 2019. Data comes from the Census Bureau’s 2019 1-year American Community Survey.
- Five-year change in average travel time. Data comes from the Census Bureau’s 2019 and 2014 1-year American Community Surveys.
- Percentage of workers with a commute of longer than 60 minutes. Data comes from the Census Bureau’s 2019 1-year American Community Survey.
- Five-year change in percentage of workers with a commute of longer than 60 minutes. Data comes from the Census Bureau’s 2019 and 2014 1-year American Community Surveys.
- Transportation as a percentage of income. Data comes from the Census Bureau’s 2019 1-year American Community Survey and the March 2020 MIT Living Wage Study.
First, we ranked each city in each metric. We then found each city average ranking, giving all metrics an equal weight except for average travel time, which received a double weight. Next, we ranked the cities based on this average, giving the city with the highest average an index score of 100 and the city with the lowest average an index score of 0.
Tips for Managing Your Money While on the Go
- Locate a one-stop shop for expert financial support. Need something to do on a long commute? Think about finding a financial advisor. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now
- Take a new route in your budget management. If transportation is eating up a lot of money, consider creating a budget using SmartAsset’s free budget tool.
- Plan your road to retirement. It’s never too early – or too late, for that matter – to start saving as much as you can for retirement. Get ready for your golden years by saving using a 401(k) or other workplace retirement plan.
Questions about our study? Contact firstname.lastname@example.org.
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The sad thing about cars is that like boats and diamond rings, they’re depreciating assets. As soon as you drive yours off the lot, it immediately begins losing value. Some people are lucky enough to live somewhere with a reliable public transportation system. And others can bike to work. If you don’t fall into either of those categories, however, a car isn’t something you can put off buying.
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If you’re preparing to purchase a new or used vehicle, you might be wondering, how much should I spend on a car? We’ll answer that question and reveal ways to make sure you’re not overpaying when you buy your vehicle.
The True Cost of Buying a Car
Next to buying a house, buying a car is likely one of the biggest purchases you’ll make in your lifetime. And if you want a quality vehicle that isn’t going to break down, you’re probably going to have to pay a pretty penny for a new ride. The average cost of a brand new car was about $33,543 in 2015, compared to $18,800 for a used one.
When you buy a car, of course, you’re paying for more than just the vehicle itself. Besides the fee you’ll pay for completing a car sales contract (known as a documentation fee), you might have to pay sales tax. Then there are license and registration fees, which vary by state. In Georgia, for example, you’ll pay a $20 registration fee every year versus the $101 that drivers pay annually in Illinois.
The amount you pay up front for a car can rise by 10% or more when you add taxes and fees into the equation. And if you need a car loan, you might have to put 10% down to get a used car and 20% down to get a new vehicle. If you decide to roll the sales tax and fees into the loan, you’ll cough up even more money over time because interest will accrue.
Once the car is in your possession, you’ll have to pay for insurance, car payments, parking fees, gasoline and whatever other costs come up. In a 2015 study, AAA found that a standard sedan cost Americans $8,698 annually, on average. As convenient as having your own car might be, it’ll be a huge investment.
Related Article: The True Cost of Cheaper Gas
How Much Should I Pay?
The exact amount that you should spend on a car might change depending on who you ask. Some experts recommend that car-buyers follow the 36% rule associated with the debt-to-income ratio (DTI). Your DTI represents the percentage of your monthly gross income that’s used to pay off debts. According to the 36% rule, it isn’t wise to spend more than 36% of your income on loan payments, including car payments.
Another rule of thumb says that drivers should spend no more than 15% of their monthly take-home pay on car expenses. So under that guideline, if your net pay is $3,500 a month, it’s best to avoid spending more than $525 on car costs.
That 15% cap, however, only applies to consumers who aren’t paying off any loans besides a mortgage. Since most Americans have some other form of debt – whether it’s credit card debt or student loans that they need to pay off – that rule isn’t so useful. As a result, other financial advisors suggest that car buyers refrain from purchasing vehicles that cost more than half of their annual salaries. That means that if you’re making $50,000 a year, it isn’t a good idea to buy a car that costs more than $25,000.
How to Buy a Car Without Busting Your Budget
If you’re trying to figure out how to make your first car purchase happen, know that you can do it even if your finances are currently in disarray. If you look at a website like Kelley Blue Book before visiting a dealership, you’ll have a better idea of what different makes and models cost. From there, you can set a goal and work towards reaching it by saving more and keeping your excess spending to a minimum.
Once you find a car you like (and that you can afford), you can save money by challenging or cutting out certain fees. For example, you can lower or bypass dealer fees for shipping and anti-theft systems. If you’re planning on getting an extended warranty, you can shop around and see if there’s another company offering a better deal on it than your car manufacturer.
Meeting with more than one dealer and comparing offers can also improve your chances of being able to find a vehicle within your price range. So can timing your purchase so that you’re buying a car when a salesperson is more open to negotiating, like near the end of a sales quarter.
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If you need financing, it’s important to make sure you’re not getting saddled with a car loan that’ll take a decade to pay off. Long-term car loans are becoming more common. In 2015, the average new car loan had a term of 67 months versus the 62 months needed to cover the average used car loan.
The longer your loan term, however, the more interest you’ll pay. And the harder it’ll be to trade in your car in the future, especially if the amount of the loan surpasses the car’s value. That’s why some experts suggest that buyers get loans that they can pay off in four years or less.
How much should you spend on a car? Only you can decide that after reviewing your budget and figuring out if you can pay for the various expenses that go along with owning a car.
Keep in mind that getting a new or used car will likely involve taking on more debt. If you can’t make at least minimum payments on the debt you already have, it might be a good idea to get a part-time job or concentrate on saving so you won’t have to take out a huge loan.
Update: Have more financial questions? SmartAsset can help. So many people reached out to us looking for tax and long-term financial planning help, we started our own matching service to help you find a financial advisor. The SmartAdvisor matching tool can help you find a person to work with to meet your needs. First you’ll answer a series of questions about your situation and goals. Then the program will narrow down your options from thousands of advisors to three fiduciaries who suit your needs. You can then read their profiles to learn more about them, interview them on the phone or in person and choose who to work with in the future. This allows you to find a good fit while the program does much of the hard work for you.
Photo credit: ©iStock.com/Eva Katalin Kondoros, ©iStock.com/michaeljung, ©iStock.com/Antonio_Diaz
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A four-bedroom townhouse with park views and tons of charm has recently hit the market, and we’re dying to tell you all about it. The listing, brought to market by Compass’ Michael J. Franco, is right next to Prospect Park, Brooklynâs second largest park, and has plenty of outdoor space (and a rooftop deck to boot).
The townhouse sits in one of Brooklynâs trendiest, most desirable neighborhoods — Park Slope — with its leafy streets lined with brick and brownstone townhouses, many of which were built near the turn of the 20th century and have been lovingly updated over the decades by young families migrating from Manhattan. Much like its neighboring properties, the 2,600-square-foot townhome at 15 Prospect Park was originally built more than a century ago in 1915 and retains its old-world charm — but has been carefully updated to meet modern standards of living.
With 4 bedrooms, 3.5 baths, a generously sized living room, and a finished basement, the Brooklyn townhouse also comes with a few rare features for a New York home: ample outdoor space and private parking (that includes a private garage and its own driveway).
The layout is split on three levels, with the first floor housing a large living room and open dining room — both with distinctive pre-war features like classic moldings and arches — and a renovated kitchen that opens up to a lovely terrace.
The second floor is home to 3 bedrooms and a sizeable landing which is perfect for either a library or a home office, while the third floor is dedicated to the primary bedroom suite and its massive walk-in closet, renovated bath with skylights and soaring ceilings, with a separate sitting area/den. The third level also provides access to the townhouse’s own rooftop deck, which adds more outdoor space and looks like a perfect place to entertain guests.
The property is listed for $4,400,000 with Compass associate real estate broker Michael J. Franco.
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The post Newly Renovated, 1915-Built Townhouse in Park Slope Asks $4.4 Million appeared first on Fancy Pants Homes.