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      02-21-2013, 06:56 PM   #33
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bplewis24's Avatar

Drives: 2011 E92 335i
Join Date: Dec 2012
Location: Sacramento, CA

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Originally Posted by Diablo335 View Post
I'm a financial advisor...

After taxes...

First set aside $ for all medical expenses for the year (co-pays, deductibles, premiums, etc.)

Second set aside at least 15% into long-term savings (IRA, etc.). More if you are saving for a house or to pay for kids' college.

Live off the rest (disposable income). If you want to spend more on a car than on something else, have at it.

I personally feel that my monthly capital cost for a car (depreciation or lease payment, as the case may be) should not exceed 1% of annual disposable income. ie, if I make $50k after taxes, savings and medical costs, then I would not buy a car(s) that depreciates more than $500 per month. If I need two cars, that's $500 total.
How do you determine or estimate depreciation yourself? Do you use a schedule?

I'm a controller by trade so I do accounting and financial reporting for my company. I just recently made my personal 2013 budget and a 5 year savings plan. At least in theory, I plan on saving 6% of monthly income for maintenance, 6% for vacation/discretionary impulse spending, and 30% towards long-term savings (saving up for a house and/or other investments). This doesnt' count the very small amount ($50) I'm contributing pre-tax to a 401K each month. Now, I don't make a ton of money (above average), but I'm single, never married, no kids and have no debt (got through college on a football scholarship), which is why I'm able to save.

The one thing I can't get a good hold on is how to determine car depreciation. It's nothing like fixed assets, building improvements and other things. Any ideas?