Knowing how much car you can afford is the first step to buying one.
Also, water is wet.
If you’re confused about how much you should spend, don’t worry. Just use this rule-of-thumb: Spend no more than 10% of your gross monthly income on your car expenses. That includes things like the car payment, interest, insurance, and even gas.
Of course, the 10% rule isn’t exactly a one-size-fits-all solution. That’s why I want to take a deeper look at buying a car — and show you tactics to get the most out of your car negotiations.
Find how much car you can afford with 20/4/10
I love financial back-of-the-napkin tricks. They can help you roughly answer hairy finance questions quickly so you don’t slave over calculations and waste time.
The 20/4/10 is a good example of one. It can help you get solid starting numbers to help your car buying decisions.