Dave Says: Don't go back into debt
BY DAVE RAMSEY
We paid off our cars a few months ago, and that freed up almost $800 month. We have two small children, and we'd like to take a camping trip in a few months, but we would need a roomier vehicle. We found a used van, and we think we could have it paid off in 12 months. We'd still have more money left than before, so would this be OK?
I'm confused. Are you telling me that you just got out from under $800 worth of car payments each month, and now you want to go right back and pick up another one? I think you've missed the point of my plan. The point is to get out of debt because living debt-free is less stressful. Live like no one else, so that later you can live like no one else!
What you're saying is you're thinking about putting your family's financial future in jeopardy because you want to go on a little camping trip in a roomier car. This is a really bad plan. You're talking about a luxury item. I went without a vacation for four years trying to get my life back together after I went broke. Now, I'm not suggesting that you live with this attitude for the rest of your life, but I'm pretty sure there are other ways to make this trip happen.
You don't need a different vehicle to go camping. Buy a couple of tents, throw them in the back of the car, and head for the woods. If your cars are really just too small to handle everything, then rent a bigger car for the weekend. I'd rather you spend a couple hundred bucks on that instead of picking up another car payment.
I think you need to do some soul searching on this one, Melissa. Your mind-set worries me because it's just not logical. If you want to get out of debt so you can have a better life, then why in the world would you go out and saddle yourself with more debt all over again?
I think I made a big mistake when I bought my car. I'm having a hard time affording the $500 a month payments because I only make minimum wage at my job and work 35 hours a week. My boyfriend, who was supposed to help me pay for it, has moved out and left me. I owe $20,000 on the car, but I know it's still worth about $19,000. What can I do?
Sell the car! You went car crazy and bought a vehicle that was way out of your league.
Right now, your entire financial world is wrapped up in paying for this thing and depending on a boyfriend to help make the payments was a mistake, too. When he left, so did the financial support.
At this point, all you need is enough credit to cover the hole that you dug. Go to your local bank or credit union and try to get a very small loan from them - about $3,000. If the car will sell for $19,000 then get it sold and use $1,000 to cover the difference.
Then, take the remaining $2,000, and buy yourself a little beater. We're not talking about anything cool, just basic, ugly transportation. After that, pick up a part-time job on the side and work like crazy for a few months to get that loan paid back as quickly as possible!
For financial help, visit daveramsey.com