Student Loan Planner How Much Do Big Ticket Items Cost When You’re Doing Forgiveness?
Aug 19, 2025
Ever wondered how big purchases affect your life beyond money? Dive into the hidden costs of big-ticket items when you're on income-driven repayment plans. Discover how to reconsider spending to safeguard your goals while still enjoying life’s pleasures. Learn practical strategies for managing housing and car costs to reduce financial stress. The discussion also highlights the importance of job satisfaction and how it can influence purchasing behaviors. This episode encourages financial mindfulness and smart decision-making.
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IDR Raises Your Real Cost Of Purchases
- Income-driven repayment effectively raises your marginal tax-like rate by 10–15% on top of regular taxes.
- That makes untaxed purchases much more expensive in pre-tax hours than their sticker price suggests.
Make Major Purchases Tax-Efficient
- Run big purchases through a business or use tax deductions when possible to lower after-tax cost.
- Work with a qualified CPA to use bonus depreciation or lease deductions to make luxury items more affordable.
Sticker Price vs Pre-Tax Time Cost
- A $75K car can cost ~ $160K of pre-tax income if your effective rate is ~55%.
- That translates to months of work traded for a single purchase, so evaluate time-cost, not just sticker price.