Author Topic: Saving for a car -- where do I put my money?  (Read 1684 times)

dmacthedestroyer

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Saving for a car -- where do I put my money?
« on: October 27, 2014, 12:41:33 PM »
I anticipate needing to buy a new (to me) car sometime within the next 2-4 years, so I've been looking to save up for when the time comes.

Does it make sense to have that money in a savings account for that 2-4 year period, or should I just put it into stocks in my Vanguard account and pull it out when I'm ready to buy?

ender

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Re: Saving for a car -- where do I put my money?
« Reply #1 on: October 27, 2014, 12:51:23 PM »
I have a separate checking account I use for all my car related expenses. I transfer an amount per month which should cover gas, maintenance, registration, and replacement costs.

This way I can see more easily what the car related expenses were budgeted at and end up being.

I'd just put it into savings or do something similar to what I do. We're not talking too much money most likely anyways. If you could pretty easily cashflow the car in the future then maybe put it into investments.

NoraLenderbee

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Re: Saving for a car -- where do I put my money?
« Reply #2 on: October 27, 2014, 01:53:28 PM »
put it in savings, money market, or something else that's fairly liquid, like Treasuries. The time horizon is too short for stocks. In the long run the market goes up, but in 2-4 years it could be anywhere.

TN_Steve

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Re: Saving for a car -- where do I put my money?
« Reply #3 on: October 27, 2014, 04:50:45 PM »
Maybe consider Vanguard short term investment grade (or equivalent) Mutual Fund (VFSTX)  if you are willing to take a little bit of principle risk (pretty darn stable over the past three years, but ....).  Better rates than mm or savings account, currently at 1.42%, https://personal.vanguard.com/us/funds/snapshot?FundId=0039&FundIntExt=INT.  Also, vanguard has short term bond index fund with etf option (BSV, VBISX), https://personal.vanguard.com/us/funds/snapshot?FundId=0132&FundIntExt=INT



   

Rage

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Re: Saving for a car -- where do I put my money?
« Reply #4 on: October 27, 2014, 05:09:43 PM »
I have some money set aside to buy a car in the next 6 months to a year - $6K - I put it in BIV (Vanguard Intermediate Term Bond ETF)

I guess I should probably have put it in a short term Bond fund, but the interest on those is just so low I couldn't bring myself to do that.