Debt Emergency Car Question

[lindsayk]

Hello,
Im a newbie to this forum but have lurked around the MMM blog a few times and was really intrigued by what I was reading.
Im newly divorced and in my early 30's and really need/want to be debt free and stashing money so Im not still doing the 9-5 when im 65!
Here's my situation...and its not pretty. Well, its pretty stressful but not pretty fun or pretty good.

I take home around $30,000 from my full time job. I have a photography business that is part for my enjoyment/hobby but is also set up as a legit business. After expenses I profit around $2000 a year from it the last 3yrs. I could do a lot more with this (make more $$$) but get stuck in making business decisions to push it forward vs. keeping it more fun for myself.

My debt is around $30,000 and is mostly student loans. $6500 in credit card debt. $6400 on a car loan. I also only have about $500 in savings(i know, not good). The car KBB's at $7300 for private party sale or $5300 for trade-in. It's a 2010 Jeep Patriot with decent gas mileage and only 79,000 miles on it. I moved after divorce and now live about 1.5miles from work so commuting is easy and close. I do drive  about 45mins away once a week and if picked up the photo business would be driving for photoshoots. Ive considered trading it in and finding something even cheaper to get my loan smaller so it can be paid off faster. Ive also considered selling it myself and getting a $1000-$2000 car....what would you guys suggest? I really want the loan gone and dont care about having a newer car but it is reliable for when i do need it and am afraid of getting something much cheaper that is older/more miles since I have almost zero savings. Just looking for some feedback/help on this one. I really hope I can get to where a lot of you are that I have been reading about. Thanks so much for your help!

LindsayK :)

[girly mustache]

Hi Lindsay - would you consider going car free and use bike/public transportation as needed? You could rent a car a few times a month for significantly less than owning... Then you could save the car payment, gas, insurance, repairs, license fees, etc to help you get farther on your debt pay down...

[lindsayk]

 I would definitely consider that but I drive one day every week about 45 minutes away for some medical appts. I checked into car rental that is close by (within walking/biking distance) and it was going to be like $40 each time for a small economy car - so about $160 a month just to rent the car and I'd have to put gas in it. My car payment is only $204 and I would still have to keep some insurance to get a car rental.

Ive decided to throw a for sale sign on it as I work on a busy Maint St. area and throw it up on some Facebook websites to see if I have any luck selling it and can get $1000/$1500 extra out of it to put towards a $2000-$2500 car. Just so nervous buying a car on my own...especially an older cheap one....afraid i will "get taken" cause Im a girl who knows nothing about cars.

Thanks for your repsonse!

[Sibley]

You've got a side business going which you can ramp up for extra money. I'd do that, at least for a while. Take the extra money and throw it at the loan/credit cards. If you decide to cut back in a couple years, you can.

Regarding the car, I'm a girl who knows nothing about cars as well. Can you get help from a friend or family member to find a decent used car? If you know someone who likes that sort of thing, then they'd probably will to help.

[Retired To Win]

In your situation, I would actually keep the car.  If you sold it, at best you would clear $900 and to get any other car you would have to plunk down more money.  And you could be buying a pig-in-a-poke headache.  I would resolve to keep the car once it's paid off.  And I would find ways to beef up car-related tax deductions connected to that photo business.

Good luck.

P.S. -- You're going to need "some" vehicle for that business.

[lindsayk]

Thanks for the responses guys. I really appreciate the feedback.
I am going to try and ramp up the side business and think I will keep the car.
I dont think i have a car problem but more of an income/spending problem.
I dont have enough savings to be able to get free of a car loan even if i sold/traded mine in
and i dont make enough money at my full time job to get rid of my debt quickly so
that means i need to use the photo business to ramp up my income and I will need
a dependable car for that. Im going to keep the car and work on paying it off as fast
as i can while maintaining it hope that it will last me a long time after its paid off.