Author Topic: Convinced myself we deserved more, looking to right our ways wisely  (Read 4978 times)

goremet

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There's quite a bit of backstory to mine & my wife's current situation, but it's mostly irrelevant as we can't alter the past, but only make different choices moving forward.  As we have our 1st on the way, due in a couple months, I'd like to do whatever I can to allow my wife to be home with the child.  Most straight forward & immediate way I can see this is cutting our overhead on vehicle loans.

We currently have 3 vehicle loans:
A @ 27k @ 0% - 459\Month
B @ 19.7k @ 1.9% - 438\Month (current resale 17,000)
C @ 12k @ 0.9% - 224\Month (current resale 10k)

We have the cash reserves to offset the sale of B & C.  B is my daily driven truck, C is a second motorcycle.  Given my work situation, we can handle dropping down to 1 car (A) as I can either bicycle to work, or ride my other motorcycle.  This would allow us time to replenish the bit of cash reserves from the sales of B &C.

I am looking to make sure we make the most ideal decisions moving forward.  Both my wife & I are in agreement that nothing future is purchased unless we can pay cash, so its a step in the right direction.

If there are any other pertinent details that would help assess the situation, let me know.  I appreciate the feedback.

-Goremet


researcher1

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Re: Convinced myself we deserved more, looking to right our ways wisely
« Reply #1 on: February 27, 2017, 07:37:47 AM »
A = ???
B = Daily Driven Truck
C = Second Motorcycle

What is vehicle A?

goremet

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Re: Convinced myself we deserved more, looking to right our ways wisely
« Reply #2 on: February 27, 2017, 07:40:09 AM »
A is my wife's car.

NoStacheOhio

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Re: Convinced myself we deserved more, looking to right our ways wisely
« Reply #3 on: February 27, 2017, 07:47:10 AM »
Is there a better choice between first and second motorcycle? Is second motorcycle newer/more reliable? It's already a sunk cost, so you might as well keep whichever one going to serve you best going forward (if your plan is to be a one car/one motorcycle household). If you keep second motorcycle, use the proceeds from sale of first motorcycle to pay down/pay off the loan. But yeah, sell/pay off loans and move on. You could stagger the sales to avoid totally depleting cash reserves. I would say sell the truck first, but with spring coming maybe motorcycle first would be the way to go?

goremet

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Re: Convinced myself we deserved more, looking to right our ways wisely
« Reply #4 on: February 27, 2017, 08:17:58 AM »
Is there a better choice between first and second motorcycle? Is second motorcycle newer/more reliable? It's already a sunk cost, so you might as well keep whichever one going to serve you best going forward (if your plan is to be a one car/one motorcycle household). If you keep second motorcycle, use the proceeds from sale of first motorcycle to pay down/pay off the loan. But yeah, sell/pay off loans and move on. You could stagger the sales to avoid totally depleting cash reserves. I would say sell the truck first, but with spring coming maybe motorcycle first would be the way to go?
Logical* - better choice right now would be keeping the 1st of the 2 bikes.  Given it's age & use, it's worth around 5500$.  It also allows me to use it for commute to work as well as for the occasional race I can get to.

The 2nd with the loan I picked up last August for my wife and I to do trips on, and then 2 weeks later....pregnant.  The pregnancy wasn't a total surprise, but has had me second guessing the second bike since.  Funny how real things get when things get real :D

Eliminating these 2 loans still allows us to keep around 6 months of emergency funds on hand, but still a healthy punch in the gut reminder to "don't do that again".  I imagine we'll likely eventually go back to 2 cars, but will be something as noted above, will be paid cash for.

-goremet

*I hate using the word "logical" with motorcycles.  Being a lifelong motorcycle addict, there is very little logical about them especially given where I live.  They are however my therapy, so there is that.

NoStacheOhio

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Re: Convinced myself we deserved more, looking to right our ways wisely
« Reply #5 on: February 27, 2017, 08:40:43 AM »
*I hate using the word "logical" with motorcycles.  Being a lifelong motorcycle addict, there is very little logical about them especially given where I live.  They are however my therapy, so there is that.

In this instance, I mean logical in the sense of "which one is going to cost you less money over the time you own it."

catccc

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Re: Convinced myself we deserved more, looking to right our ways wisely
« Reply #6 on: February 27, 2017, 09:31:30 AM »
I think your plan to get rid of vehicles B & C is decent.  But you might even be able to take this a step further.

What type of vehicle is A?  I know it's 0%, but a $27K car (IMO) is expensive and unnecessary.   $459 a month for a car seems like a lot.  Can you sell it for something that costs less and end up with a lower payment?  Or possibly even pay in cash?

When we had our first kid in 2008, our family car was a 3.5 year old toyota matrix that cost $15K when DH bought it brand new.  (We still have this car, had another kid, and it does a good job as our main family vehicle.  Kids are 5 & 8 now.)




goremet

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Re: Convinced myself we deserved more, looking to right our ways wisely
« Reply #7 on: February 27, 2017, 10:07:59 AM »
In this instance, I mean logical in the sense of "which one is going to cost you less money over the time you own it."
Understood.  The 1st bike is most logical, given amount of time I've owned it, overall usability, and it being a "known" factor.  All my riding gear matches it too, and that stuffs not cheap to replace :-)

I think your plan to get rid of vehicles B & C is decent.  But you might even be able to take this a step further.

What type of vehicle is A?  I know it's 0%, but a $27K car (IMO) is expensive and unnecessary.   $459 a month for a car seems like a lot.  Can you sell it for something that costs less and end up with a lower payment?  Or possibly even pay in cash?

When we had our first kid in 2008, our family car was a 3.5 year old toyota matrix that cost $15K when DH bought it brand new.  (We still have this car, had another kid, and it does a good job as our main family vehicle.  Kids are 5 & 8 now.)
A is a Mazda CX5.  We got this not too long ago, as my wifes prior car was coming off lease.  We realized the car lease thing was not for us, but wanted something we knew would be around a long time for my wife.  While I am very handy and mechanically inclined, I am OK with paying a bit of extra on her vehicle knowing that I won't have to worry about it having issues.

I figure with B & C gone, I could then use that extra revenue towards mortgage, rebuilding reserves, or paying down car A quicker.

Appreciate all the quick responses. 

-goremet

catccc

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Re: Convinced myself we deserved more, looking to right our ways wisely
« Reply #8 on: February 27, 2017, 10:49:13 AM »
I can certainly appreciate not wanting to have issues, but like I said, you can get a brand new car for considerably less than $27K.  A Toyota Corolla base (our Matrix, which they don't make anymore, is basically a hatchback version of the Corolla) runs $18.5K for a brand new 2017 model.  That's nearly 9K less.  I'm not suggesting you get a $3K 2005 Honda Civic with 170K miles on it.

If you have convinced yourself that you deserve the CX-5, or "need" this crossover SUV your new baby, or whatever other value you attach to it, so be it.  But if you are trying to be more mustachian going forward, reconsider a $27K vehicle.  If not now, perhaps when it comes time to add a 2nd automobile to your fleet, this advice might be useful.  I promise you many families with 1-3 kids do just fine in a smaller, less expensive vehicle.

p.s., anticipating the arrival of our first baby was one of THE MOST amazing times of my life.  I planned on staying home and we were sitting on $150K cash reserves that we could tap into when we dropped from a joint income of $100K to DH's income of only $25K.  Once you have the finance thing sorted out in a place that you needn't worry about it, sit back (ha ha) and enjoy.  Or even if you don't get it sorted out, enjoy this time.  I found it so special.

« Last Edit: February 27, 2017, 10:53:55 AM by catccc »

goremet

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Re: Convinced myself we deserved more, looking to right our ways wisely
« Reply #9 on: February 28, 2017, 02:04:05 PM »
Well at least my truck will be gone this week and possibly the bike with a loan as well.  Steps in the right direction.

Regarding CX5, I am aware it isn't a total necessity.   We could make do with a lower cost vehicle.  I have however put a personal value on knowing that my wife has a (theoretically) 100% dependable machine whenever needed.  She's probably the most gentle person on cars I know, so we anticipate the car being a long term machine for her.

I on the other hand, do not mind being a bit more outdated, hence the sale of the above bike & truck.  :)

Thanks again for feedback

-goremet

NoStacheOhio

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Re: Convinced myself we deserved more, looking to right our ways wisely
« Reply #10 on: March 01, 2017, 06:15:43 AM »
Regarding CX5, I am aware it isn't a total necessity.   We could make do with a lower cost vehicle.  I have however put a personal value on knowing that my wife has a (theoretically) 100% dependable machine whenever needed.  She's probably the most gentle person on cars I know, so we anticipate the car being a long term machine for her.

I think it's less about the newness, and more about the fact that the vehicle itself is probably more than you need. You'd be getting less pushback with a Mazda3/Civic/Fit/Corolla of the same age.

catccc

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Re: Convinced myself we deserved more, looking to right our ways wisely
« Reply #11 on: March 01, 2017, 10:49:56 AM »
Regarding CX5, I am aware it isn't a total necessity.   We could make do with a lower cost vehicle.  I have however put a personal value on knowing that my wife has a (theoretically) 100% dependable machine whenever needed.  She's probably the most gentle person on cars I know, so we anticipate the car being a long term machine for her.

I think it's less about the newness, and more about the fact that the vehicle itself is probably more than you need. You'd be getting less pushback with a Mazda3/Civic/Fit/Corolla of the same age.

Yes, this is most definitely what I was trying to get at, which is why I gave a 2017 Toyota Corolla as an example .  It's not about the newness.  I understand that you value the dependability of a new car.  It's the size of the vehicle, whatever upgrades made it cost 27K, the continued additional cost of gas, etc. 

Also, note that Consumer Reports ranks Toyota as the #2 most reliable brand for 2017.  Same ranking as 2016.  Mazda is #6 for 2017, down two spots from 2016.  My point is you can get an equally, or even more reliable car for less money.  If you attach some value to the Mazda brand despite these rankings, a 2017 Mazda 3 hatchback would set you back $19K, still $8K less than your current vehicle.  If you would still buy the CX-5 again knowing all this, because you value the size or features, cool, stick with it.  We can all place value on different things.  I have been known to spend stupid amounts of money on vacations for my family.  We value different things and that is okay.

You have taken really good steps!!!  I don't mean to discount that with my responses.  A lot of people wouldn't be willing to make these changes.  They would feel stuck with their past decisions and complain about their finances but not do anything to change them.  You are definitely on the right path!

moonpalace

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Re: Convinced myself we deserved more, looking to right our ways wisely
« Reply #12 on: March 01, 2017, 01:20:13 PM »
There's quite a bit of backstory to mine & my wife's current situation, but it's mostly irrelevant as we can't alter the past, but only make different choices moving forward.  As we have our 1st on the way, due in a couple months, I'd like to do whatever I can to allow my wife to be home with the child.

I'll leave the CX-5 face-punching to others; I just wanted to say that I really admire your perspective about not dwelling on the past. And also prioritizing allowing your wife to be home w/ your first child, while trying to get to a better place financially. It sounds like you're on the right path and the two of you are there together, which is really wonderful.

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Given my work situation, we can handle dropping down to 1 car (A) as I can either bicycle to work, or ride my other motorcycle. 

And a hearty round of applause for biking to work and/or riding a not-new motorcycle! I assume the motorcycle gets amazing mpg and has low maintenance costs, right?

Quote
Both my wife & I are in agreement that nothing future is purchased unless we can pay cash, so its a step in the right direction.

Yes!

catccc

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Re: Convinced myself we deserved more, looking to right our ways wisely
« Reply #13 on: March 01, 2017, 02:12:31 PM »
Given the loan amount ($27K) on the Mazda CX-5:  swapping this for a less expensive smaller car is probably not going to net any gains other than long term in fuel savings. 

Likely they have a 2016 CX-5 Grand Touring (or similar high level of equipment) with maybe 15,000 miles and they may be able to sell it for ~$23K (did a Kelly BB lookup with standard equipment, grand touring model and "very good" condition).  Now they are $4K in the hole and have to go buy another new car?  That doesn't make any sense.  I'd just keep the CX-5 at this point since you owe more than what it is likely worth and still need a vehicle.

He's not going to sell it, which is fine.  He and his wife like it, think it is worth it, etc.

But... $4K in the hole from the sale, and then buying an $8K less expensive (Mazda 3, for example) car means $4K in your pocket, right?.  IDK, I think it makes sense from a numbers standpoint.

goremet

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Re: Convinced myself we deserved more, looking to right our ways wisely
« Reply #14 on: March 03, 2017, 06:54:13 AM »
Well my truck is officially gone.  Although I did pick a pretty bad time of the year to go carless :).  It's been a long time since I've commuted to work via motorcycle in sub 20 temps.  At least the sun was shining and no snow (knock on wood).

On the upside too, truck payment + insurance = $470\month savings. 

Time to get the bike sold.

-goremet

moonpalace

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Re: Convinced myself we deserved more, looking to right our ways wisely
« Reply #15 on: March 03, 2017, 07:49:01 AM »
Well my truck is officially gone.  Although I did pick a pretty bad time of the year to go carless :).  It's been a long time since I've commuted to work via motorcycle in sub 20 temps.  At least the sun was shining and no snow (knock on wood).

On the upside too, truck payment + insurance = $470\month savings. 

Time to get the bike sold.

-goremet

*HIGH FIVE*

Awesome! And super bad-ass to do this in March. Put those savings to work!

PJ

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Re: Convinced myself we deserved more, looking to right our ways wisely
« Reply #16 on: March 03, 2017, 07:52:44 AM »
Well done!  I agree, that's total badassity :-)

What's the next step, to righting your financial ship?  Is the bike already listed?

catccc

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Re: Convinced myself we deserved more, looking to right our ways wisely
« Reply #17 on: March 03, 2017, 09:35:40 AM »
Well my truck is officially gone.  Although I did pick a pretty bad time of the year to go carless :).  It's been a long time since I've commuted to work via motorcycle in sub 20 temps.  At least the sun was shining and no snow (knock on wood).

On the upside too, truck payment + insurance = $470\month savings. 

Time to get the bike sold.

-goremet

Rock on!  (Also, one month's worth of savings will probably go far if you need to get some better gear to make the commute doable on a motorcycle in those temps.)  Ride safe!

goremet

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Re: Convinced myself we deserved more, looking to right our ways wisely
« Reply #18 on: March 06, 2017, 10:02:47 AM »
Bike is currently listed.  Selling bikes around here this time of year is only done at rock bottom prices.  I'm OK holding off another month or two and not taking a more significant loss right now.  This weekend & remainder of the month appears to be snow filled, so far from ideal for 2 wheeled commuting.

Regarding gear, I am overdue on some items, but undecided to which setup I want to go with.  I've got some other gear that has proven to be less than ideal for most of my riding, so I'll likely sell this to offset the cost of some new gear.  Not a major rush as all my current gear is still working.

Next steps have been implemented.  We don't really eat out much (at all really), but I've made an effort to make sure I've brought some form of lunch with me on a daily basis.  Our main food cost is usually random trips to the grocery store when you need an extra ingredient.  That turns into 10 things and an extra 50$.  So we've setup bi-weekly major grocery runs.  Only thing that isn't totally panning out with is fruits and veggies with how quickly we go through them.

It's quite odd for me without a car right now.  I don't think I've not had my own car since I started driving.  I've done some searching for a less expensive car, and am quickly reminded of the joys of used car purchasing.  Good times. :)

-goremet