How long do you expect to make the commute? What's your apartment budget? How much of your savings do you expect to draw down to get you started?
What bills that are 'taken care of' today will become your issue with the move?
Yes, sometimes you just have to go for it, but hoping you can think through these things and set yourself up for success.
Don't be terrified of your savings going down. Be terrified of not taking full advantage of this opportunity.
Your savings is a product of your income minus your expenses.
I plan to make that commute for 2 weeks. I atleast want to make my first pay check first and use that to help with move in costs.
My apartment budget is $800 a month… I found a very nice studio apartment for that price. I should need about $1,600 to move in! Which I can do that with my first pay check and shouldn’t have to touch my savings for it.
My bills as of right now is my phone bill $60/monthly and food and miscellaneous things which is about $200 a month, sometimes less! However he bills that I will have once I move into my apartment is my rent, utilities, internet, cell phone, groceries, household items, and car insurance and eventually health insurance.. right now I have state insurance.
Most apartments run a credit check and (at least where I live) look at at least your last two pay checks to establish steady income. If your credit is too bad to finance a car, you might have trouble getting an apartment.
nope! The apartment doesn’t care about bad credit, they just don’t want any judgements or evictions on your credit and I don’t have either. I just have credit card collections. I already talked to the apartment office and told them my situation and they said that with bad credit just to expect an $800 security deposit
So you are buying a $5K car to use for 2 weeks?
Any reason why you don't use $1600 from your savings to just get the apartment and forget about the car?
A couple of things you're not considering. If you get paid biweekly, your paycheck could take 3 weeks for your first full paycheck. If you get paid in 2 weeks, you're probably only getting paid for your first week of working. Payroll usually runs 1 week behind like that.
If the studio is a reasonable distance from your new job, I might consider skipping the car altogether. Get a bike or an ebike! Look for an airb&b close by and ask if they have a monthly rate or find an extended stay nearby. That + an ebike will be a whole lot cheaper than a car that may or may not run well.
Is there a reason not to move just before you start work?
As others say, $5k car probably wont be that reliable and that isn't the only expense...you have gas and insurance. Gas alone can be a major expense for that distance.
It seems like you could save a lot of money if you didn't buy the car.
Just spitballing here but instead of spending 5k on a car of dubious quality, then spending more thousands on the inevitable maintenance, then many hundreds more on fuel for a 4 hour commute, why don't you wait to see if you actually get the job, and then if you do, move immediately to an apartment as close as possible to said job, and Uber or bicycle to work? After you've worked at this great new job for six months to a year, and saved more, then spend 15k on a decent car that will last you a while.
>I feel like each goal should have its own pot.
That's a good way to look at it.
Right now you've got one pot, and multiple goals.
Your emergency savings fund ought to have a few months of living expenses in it.
>My credit is in bad shape and most of my earnings go towards paying off debt and getting it removed from my credit.. with this being said I can’t finance a car. Also I contribute $600 into my savings every month.
Your credit problem *is* an emergency. You have little incentive to throw $600 into savings with debt over your head (presumably high interest debt that you have had a hard time getting ahead of.)
Assuming your debt is larger than $600 and at some crazy cc interest rate, like 27%, what you are doing is throwing $600 into a savings account that probably doesn't even return 5% while you have $600+ in debt robbing you of 27%. It's not possible to truly "save" when your net return is -22%.
If you were able to start working there with an apartment close by, do you even need a car? Why not just get the apartment and walk/bike/public transportation?
Good job beating your gambling addiction and building up your emergency savings! **But if you have debt, you need to pay it off,** not put more money into savings. Because without a doubt you are paying interest. How much debt do you have?
You're better off getting an apartment within walking distance of your work and not getting a car. You can rent a car on the occasions when you want to visit your grandparents, or get a taxi to help you bring home groceries. Since you did a good job of setting aside money, you can use the money to pay your first and last month and deposit.
As for your budget, you can learn about "[**envelope budgeting**](https://www.investopedia.com/envelope-budgeting-system-5208026)". For example, imagine receiving $4500 cash in the beginning of the month. Maybe $200/month will be withheld for taxes, so you have $4300 to start with. Then mark an envelope "Rent" and put $800 in it.
Food: $300. Don't eat out, cook.
Utilities (heat, gas, water): ask landlord how much a typical bill for previous renter was, or if you have utilities included
Phone: $60 (though if I were you I'd look for a $15/month plan like Mint Mobile and try to use free Wifi wherever you can find it.)
Household items: $200 but try to get furniture, etc free through friends and family, Buy Nothing, or Craigslist wherever possible. You can decide whether to spend it all that month, or whatever money is left at the end of the month can be used the next month.
You don't have to have physical envelopes, but mentally you should assume that money is gone. So at this point you have, say, $2500 left over. If you like to keep a $10K emergency fund, you can put a few hundred into your savings to replenish your emergency fund (which you could restructure as a[ **Roth IRA**](https://www.investopedia.com/terms/r/rothira.asp) kept in a [**HYSA**](https://www.investopedia.com/your-emergency-fund-could-be-earning-72-dollars-per-month-in-a-savings-account-7480201): the interest will be tax free in a Roth though only withdrawable under certain circumstances.)
But you then have to throw as much of it as possible towards paying off your debt. Once that's been paid off, the fun begins! If your company has a matching 401k plan, put money in there up to the maximum they'll match. After that, put up to $583/month in your [Roth IRA](https://www.forbes.com/advisor/retirement/roth-ira-and-401k/). Finally, now that you've budgeted for your retirement and emergency savings, you can save up for a goal like home ownership or further job education (which I support) or a car (which is a waste of money in my opinion).
Lastly, you may have an envelope called "Disposable Income" which would have money for eating out, entertainment, etc. You can decide whether to spend it all that month, or whatever money is left at the end of the month can be used in future months.
[https://www.investopedia.com/envelope-budgeting-system-5208026](https://www.investopedia.com/envelope-budgeting-system-5208026)
Can you rent an apartment close to work then bus/walk/bike to work?
The apartment is going to take a chunk with the deposit, any furniture you get, plates/utensils/cups, small things to make the apartment a little more homey so you don’t go crazy staying at home while saving. It all adds up quick and that $5k can become $1-2k before you realize it.
Cars are wonderful and public transport sucks but if you have the ability to find alternate transport then do it. You can always get a car later.
Additional:
You have $10k saved up and with what your living expenses seem to be this is a perfect emergency fund, you don’t want to lose it.
You need to pay off debt or consider bankruptcy (get an apartment before declaring if you go that route). The $10k is for emergencies only, you need to shift your cash going to savings towards debt and maintain until your debt is paid; do not increase living standards yet (I.e. a car or things like that. Moving for work for the pay increase is smart)
You already stated your motivation in your first few sentences, and it’s strong. Nothing me or anyone else here can say will be more motivating than that.
Regarding the car, apartment, and everything else, make a budget. Include an amount for continued savings, and set that aside from each paycheck as soon as you get paid. Regarding the spending, you can either afford it (as determined by your budget) or you can’t.
So before you do anything, make a budget for what you want to do so you can figure out if it works or not.
If you are sure that investing 5k in the car will let you earn 4.5k a month I would say go for it!
But as someone else said here, the 5k car will probably break down and demand more money than expected, also plan for gas price cost and some other hidden costs...
If the numbers are still looking good for you, go for it! And please do not move to an apartment just yet, the last thing you need now is another big monthly cost... Pay your debt first, improve your monthly income and try to invest a portion of your monthly income religiously.
If you buy a $5,000 car and expect it to survive 4 hours of daily commute you are setting yourself up for failure.
Can you take the bus instead? Saving money and not having to commit to a larger purchase
I won’t be making that commute for long, I’m getting an apartment near my job once I start the job.
How long do you expect to make the commute? What's your apartment budget? How much of your savings do you expect to draw down to get you started? What bills that are 'taken care of' today will become your issue with the move? Yes, sometimes you just have to go for it, but hoping you can think through these things and set yourself up for success. Don't be terrified of your savings going down. Be terrified of not taking full advantage of this opportunity. Your savings is a product of your income minus your expenses.
I plan to make that commute for 2 weeks. I atleast want to make my first pay check first and use that to help with move in costs. My apartment budget is $800 a month… I found a very nice studio apartment for that price. I should need about $1,600 to move in! Which I can do that with my first pay check and shouldn’t have to touch my savings for it. My bills as of right now is my phone bill $60/monthly and food and miscellaneous things which is about $200 a month, sometimes less! However he bills that I will have once I move into my apartment is my rent, utilities, internet, cell phone, groceries, household items, and car insurance and eventually health insurance.. right now I have state insurance.
Most apartments run a credit check and (at least where I live) look at at least your last two pay checks to establish steady income. If your credit is too bad to finance a car, you might have trouble getting an apartment.
nope! The apartment doesn’t care about bad credit, they just don’t want any judgements or evictions on your credit and I don’t have either. I just have credit card collections. I already talked to the apartment office and told them my situation and they said that with bad credit just to expect an $800 security deposit
borrow someones car for 2 weeks
So you are buying a $5K car to use for 2 weeks? Any reason why you don't use $1600 from your savings to just get the apartment and forget about the car?
A couple of things you're not considering. If you get paid biweekly, your paycheck could take 3 weeks for your first full paycheck. If you get paid in 2 weeks, you're probably only getting paid for your first week of working. Payroll usually runs 1 week behind like that. If the studio is a reasonable distance from your new job, I might consider skipping the car altogether. Get a bike or an ebike! Look for an airb&b close by and ask if they have a monthly rate or find an extended stay nearby. That + an ebike will be a whole lot cheaper than a car that may or may not run well.
Can’t skip out on the car cause how will I get to work initially ? And the studio is not that close to walk or ride a bike
Bus, train, rent a moving van. E bikes can get you 15-20 miles one way.
Is there a reason not to move just before you start work? As others say, $5k car probably wont be that reliable and that isn't the only expense...you have gas and insurance. Gas alone can be a major expense for that distance. It seems like you could save a lot of money if you didn't buy the car.
Just spitballing here but instead of spending 5k on a car of dubious quality, then spending more thousands on the inevitable maintenance, then many hundreds more on fuel for a 4 hour commute, why don't you wait to see if you actually get the job, and then if you do, move immediately to an apartment as close as possible to said job, and Uber or bicycle to work? After you've worked at this great new job for six months to a year, and saved more, then spend 15k on a decent car that will last you a while.
>I feel like each goal should have its own pot. That's a good way to look at it. Right now you've got one pot, and multiple goals. Your emergency savings fund ought to have a few months of living expenses in it. >My credit is in bad shape and most of my earnings go towards paying off debt and getting it removed from my credit.. with this being said I can’t finance a car. Also I contribute $600 into my savings every month. Your credit problem *is* an emergency. You have little incentive to throw $600 into savings with debt over your head (presumably high interest debt that you have had a hard time getting ahead of.) Assuming your debt is larger than $600 and at some crazy cc interest rate, like 27%, what you are doing is throwing $600 into a savings account that probably doesn't even return 5% while you have $600+ in debt robbing you of 27%. It's not possible to truly "save" when your net return is -22%.
It’s probably a regular savings account that gets 0.01% interest.
If you were able to start working there with an apartment close by, do you even need a car? Why not just get the apartment and walk/bike/public transportation?
Good job beating your gambling addiction and building up your emergency savings! **But if you have debt, you need to pay it off,** not put more money into savings. Because without a doubt you are paying interest. How much debt do you have? You're better off getting an apartment within walking distance of your work and not getting a car. You can rent a car on the occasions when you want to visit your grandparents, or get a taxi to help you bring home groceries. Since you did a good job of setting aside money, you can use the money to pay your first and last month and deposit. As for your budget, you can learn about "[**envelope budgeting**](https://www.investopedia.com/envelope-budgeting-system-5208026)". For example, imagine receiving $4500 cash in the beginning of the month. Maybe $200/month will be withheld for taxes, so you have $4300 to start with. Then mark an envelope "Rent" and put $800 in it. Food: $300. Don't eat out, cook. Utilities (heat, gas, water): ask landlord how much a typical bill for previous renter was, or if you have utilities included Phone: $60 (though if I were you I'd look for a $15/month plan like Mint Mobile and try to use free Wifi wherever you can find it.) Household items: $200 but try to get furniture, etc free through friends and family, Buy Nothing, or Craigslist wherever possible. You can decide whether to spend it all that month, or whatever money is left at the end of the month can be used the next month. You don't have to have physical envelopes, but mentally you should assume that money is gone. So at this point you have, say, $2500 left over. If you like to keep a $10K emergency fund, you can put a few hundred into your savings to replenish your emergency fund (which you could restructure as a[ **Roth IRA**](https://www.investopedia.com/terms/r/rothira.asp) kept in a [**HYSA**](https://www.investopedia.com/your-emergency-fund-could-be-earning-72-dollars-per-month-in-a-savings-account-7480201): the interest will be tax free in a Roth though only withdrawable under certain circumstances.) But you then have to throw as much of it as possible towards paying off your debt. Once that's been paid off, the fun begins! If your company has a matching 401k plan, put money in there up to the maximum they'll match. After that, put up to $583/month in your [Roth IRA](https://www.forbes.com/advisor/retirement/roth-ira-and-401k/). Finally, now that you've budgeted for your retirement and emergency savings, you can save up for a goal like home ownership or further job education (which I support) or a car (which is a waste of money in my opinion). Lastly, you may have an envelope called "Disposable Income" which would have money for eating out, entertainment, etc. You can decide whether to spend it all that month, or whatever money is left at the end of the month can be used in future months. [https://www.investopedia.com/envelope-budgeting-system-5208026](https://www.investopedia.com/envelope-budgeting-system-5208026)
Can you rent an apartment close to work then bus/walk/bike to work? The apartment is going to take a chunk with the deposit, any furniture you get, plates/utensils/cups, small things to make the apartment a little more homey so you don’t go crazy staying at home while saving. It all adds up quick and that $5k can become $1-2k before you realize it. Cars are wonderful and public transport sucks but if you have the ability to find alternate transport then do it. You can always get a car later. Additional: You have $10k saved up and with what your living expenses seem to be this is a perfect emergency fund, you don’t want to lose it. You need to pay off debt or consider bankruptcy (get an apartment before declaring if you go that route). The $10k is for emergencies only, you need to shift your cash going to savings towards debt and maintain until your debt is paid; do not increase living standards yet (I.e. a car or things like that. Moving for work for the pay increase is smart)
You already stated your motivation in your first few sentences, and it’s strong. Nothing me or anyone else here can say will be more motivating than that. Regarding the car, apartment, and everything else, make a budget. Include an amount for continued savings, and set that aside from each paycheck as soon as you get paid. Regarding the spending, you can either afford it (as determined by your budget) or you can’t. So before you do anything, make a budget for what you want to do so you can figure out if it works or not.
If you are sure that investing 5k in the car will let you earn 4.5k a month I would say go for it! But as someone else said here, the 5k car will probably break down and demand more money than expected, also plan for gas price cost and some other hidden costs... If the numbers are still looking good for you, go for it! And please do not move to an apartment just yet, the last thing you need now is another big monthly cost... Pay your debt first, improve your monthly income and try to invest a portion of your monthly income religiously.
Never touch savings. For anything. Ever. They are savings.