Hello all!
So I'll start right into it. I'm 25 years old and I've been living a fairly non-frugal lifestyle for the past three year as a Paramedic. Over those the past two years I have started saving some money (at the daily pestering advise of my friend and work supervisor) and have started the long journey towards financial independence. I opened up a Roth IRA with Vanguard (target retirement fund) and have maxed it the past two years, contributed 2% to a company 457b ($375 match, pitiful sadly), and have mandatory 8% pre-tax state pension. All good things, though I know very little about investing and should probably be contributing/doing more in that area.
I owned a 2008 Subaru Legacy that I bought 3 years ago for 14,500.00, at the time it had 18,000 miles on it. When I got a better job a year ago I thought to my young dumb self, "you can buy a faster car now!" So in December of 2014 I purchased a 2015 Subaru WRX for 27,552.00 from the dealer. I put $10,800 down, traded in the Legacy (owed $4050, net equity towards trade in was $5950) so I financed $12,206.06 at 2.49% for 72 months. Why did I do this? Because I love the feeling of being pressed against the driver's seat and rowing through a 6 speed transmission, and I'm young...and dumb.
So today I'm sitting at my computer looking over my YNAB spreadsheet, and I think "What the hell am I doing with this car?" I could drive something more reliable, that gets much better gas milage, has a cheaper insurance payment, and no monthly car payment. So I go looking and find a 2010 Mazda 3 speed with a 5 speed. 36,000 miles. $8,000. Perfect daily driver, cuts my total monthly car expenses in half.
So my question is: Should I sell my 2015 WRX and take a loss of about $2k - $4k to rid myself of this debt/burden?
Finances at present.
$11k - Roth IRA
$2k - 457b
$16k - Savings (12.5k is emergency fund)
2k - Checking
Monthly income (take-home after taxes, 401(k), etc): Avg $3,500.00 ($2,600 without OT, lots of OT available)
Here's my budget:
Rent $590.00
Electric $50.00
Water $15.00
Phone $90.48
Car Insurance $158.33
Internet/Cable $58.69
Car Payment $188.64
Food $120.00
Restaurants $60.00
Gas $100.00
Netflix $8.99
Total (roughly, some months I go over): $1440.13
Rest of money goes towards Roth IRA to max, and general saving fund (need to get more specific about what "job" the money gets assigned to).
Thanks in advance, feel free to be critical/harsh. I'm new to the idea of being fiscally responsible, so lay the hard truth on me.