Dear Dave: My husband and I work and live in an RV. The vehicle is paid for, and I’d like to upgrade to a larger one, but that would mean taking out a $30,000 loan. We have $30,000 in savings, including our emergency fund, and we make $55,000 a year. What are your thoughts? — Renee
Dear Renee: I think what you’re doing with your lives is kind of cool. But I can’t advise financing something that will go down in value as quickly as an RV. I wouldn’t even do it on the basis that it’s going to be your primary residence.
Let’s look at things from a different angle. First of all, I think your emergency fund is a little high. I recommend three to six months of expenses, and on a household income of $55,000, holding $20,000 in reserve would be a lot. If you kept $15,000 in the bank, that would leave you with $15,000. If you’re talking about a $30,000 upgrade, you’d only need to save up another $15,000.
See where I’m going with this? With a little patience and planning, you can have your upgrade in the not-too-distant future and still have the peace of mind that goes with knowing you have a reasonable emergency fund sitting in the bank!
VIA http://www.thespectrum.com/story/news/local/2015/06/20/ramsey-need-something-matters/29046079/
