So a close train wreck friend posted a picture of her brand new 2015 Jeep Grand Cherokee and how happy she is with it. Of course I said it was nice, but why did she get it? her response was that her husband had been in the dealership before Christmas looking around and they called him since vehicles were not moving and therefore they got a great deal.
So some backstory to put things in perspective:
1. She believes she has no debt, even though she has a line of credit and a car loan.
2. In 2014, they sold their home in Southwestern Ontario, for minimal equity, and packed up and moved to Alberta (she was originally going to move to BC because she wanted to live in the mountains, I at least managed to get her to come to her senses that at the time jobs were more readily available in Alberta)
3. To move, her and her husband purchased a minivan to take their belongings and a uhaul to drive across the country and figure out where they wanted to live, with no destination in mind or secured job. This van was paid for in cash with the proceeds of the home.
4. 3 months after the move, and after her husband found a job (she doesn't work, stays home and watches tv and is on fb most of the day), they proceeded to buy a 2014 fully outfitted and lifted dodge ram 1500 with crazy bells and whistles because "everyone out here has a truck", and in the process traded in the fully paid van and took out a loan.
5. fast forward to last week, and while her husband is still working and making great money on the oil patch (no warning bells going of for them at all), he gets the call and they decide that because she always wanted a grand Cherokee and it was a great deal they traded in their truck (which is now too big for what they need). As I gently inquired about it, and was it expensive, she said, oh no, its an amazing deal because they consolidated their $8000 of debt from high interest cards into the loan, plus got $7500 off because of knowing or being related to someone at the Chrysler plant, and the trade in value of the truck came out to the new price of the Cherokee. But in total they got $16,000 off the price. At least (?) its only 3.49% interest...
Anyways, it makes me cringle a lot when I hear this stuff from her, because they have no money saved (except for the company match RRSP he just started to invest in that does a company match thank god), they used his tax return to get her motor bike a custom paint job (I was hoping they would put it into an RRSP for her, but alas priorities), and while she says that they are "saving", I have no idea how. They are 45 and 43 with no thoughts of planning beyond what they are going to do when he comes home for his week off before he goes away for another 2 weeks of work.