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Not being financially literate could cost you a bundle

When people shop for a new car, they usually ask the dealer what the monthly cost will be. Wrong question. Don’t just think about the sticker price or the monthly payment when you scout how much you can afford each month.

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Based on the financing, the dealer says it will be $300, and people can see that fitting into their budget, Edelman says. But they are not factoring in how much it will cost to buy fuel based on that vehicle’s miles per-gallon ratio. Other costs to consider: tolls, parking, insurance, general maintenance, garage fees. Don’t forget that some vehicles cost much more to insure than others.

Without looking at the total cost picture, you could take on an expense that seems affordable at first, but really isn’t when you add up the other fees.

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About Virgie Powell

Virgie B. Powell writes for Reiterment Planning and Tax Advice sections in AmericaRichest.

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