<prompt> Human: Evening everyone, I have a bit of dilemma I was hoping you could help me with. Years ago, I got a 2008 Honda Civic. I had it for about a year before I lost my job and my car was repossessed. I owed 10k after it was sold at an auction. Recently, a collection agency has sent me a letter offering a settlement of 2,052. More currently I bought a 2014 Dodge Dart brand new in December 2014 and owe 22k on it right now. The interest rate is insanely high at 18. My plan was to save up 10k and put it on my new car and either selling it and being rid of a car note for a year or two and recoup my 10k. The 10k used to put towards the car would be the foundation to owning a home in the next three years. Is there any advice you could offer me to help me make the best decision?  <response>: Hi Migzors- you are going about your finances all wrong, Taking on a 22,000 car loan 18 when you have other outstanding loans and goals to buy a home is a recipe for disaster. If you want to truly get ahead financially you need to be asking bigger questions of yourself.You need to identify a how much you can sustainably save each month without compromising you ability to cover future expenses.Then you need to channel all those funds into building a 5,000 to 10,000 cash reserve for the just in case scenario loss of employment for example.Once you have a cash reserve through every spare cent you have at paying off your debt, start with the collection agencies offer and tick that debt off your list.Sell your 22,000 car and buy a 2nd hand car for 5,000 with cash!!With the car loans paid off you your savings capacity will skyrocket, you can then either save to buy your 22,000 car with cash or you can keep driving your perfectly good 5,000 car and save for your home unencumbered by high interest loans.Lifestyle debt like car loans are destructive to your financial future, yes everyone does it but that doesnt make it right. 