I think of cars as consumable objects with no resale value, just like a box of cereal. I drive the thing until the wheels fall off, then duct tape them back on and drive some more.
I feel the same way about my car now. I'm single and have no kids, and so a sports car is "reasonable". I see no reason why I wouldn't own it for the next 22-24 months. I may even hold on to it for longer than that. As I said, my goal is to clear my debt and save up for a round the world trip. So, I will probably sell the car before I leave to finish the loan off and maybe make some money.
I do like my car a lot, and I spend a ton of time in it. Now that winter is over and I'm back to driving windows down and I can actually grip the road, it's much more enjoyable.
I think I'm going to continue to avalanche my money into the credit card debt and then revisit the car issue then. By that time, I'll have paid down an additional 3-4k on the car anyway, and would likely be even with the remaining loan balance. Also I plan on looking into refinancing the car as soon as possible.
My credit score was something like 605 when I bought the car, it's 630 now, and I believe that the more money I pay into my debts I should continue to go up. So hopefully by the time I pay off the credit cards I can refinance with a better rate.
With all this going on I just wanted to tell you that you are in the right direction. I realize that the only thing that can make us feel better is time. We all wish we found this website earlier than when we did.
Pay your credit cards first. then decide on the car. One thing you wont have to worry about is the reliability of the ford. They are one of the leaders in fuel efficiency as well. Try to figure more things you can cut if you can and continue dropping that credit card debt!
Thank you for the encouragement. I'm feeling silly for not having done anything about this sooner. I literally knew I was burning my financial house down, but ignoring it was as simple as not logging into my online account and not answering the phone when unknown numbers called. I can't believe I let it go so long.
I ended up with $15,000 of credit card debt, and the only things I can remember actually buying on those cards is a $600 mountain bike and a $1,500 computer. I guess I nickel and dimed myself out of $15,000 I could be putting toward my savings today.
Ah well, gotta forgive past me, he was a fool.
I'm continuing to learn where to get the best deals and I've already cut my grocery bill significantly. I also took control of the common household goods in my shared house (detergent, trash bags) and instead of paying for the stuff we need myself, I'm having everyone contribute equally.
I've learned a lot in the 4 months I've been at it, and it's been a tremendous relief already. It does suck seeing $1500 leave my bank account every month that could be saving up for my goals, but I'm doing the time for my crimes :)
I think of cars as consumable objects with no resale value, just like a box of cereal. I drive the thing until the wheels fall off, then duct tape them back on and drive some more.
+1 to this.
I am 3 months in here - so also just starting out - different starting point but similar issues. I have accepted that I bought a stupid car - but I drove my last car for over 100,000 miles and kept it for 10 years. Plan to do the same with the new one. Similarly, when I am out from under my cc debt and car will be paid off.
Your car insurance is crazy high. Have you shopped around? Do you have ridiculously high personal liability on your policy or something? I would suggest called USAA and seeing if there is any way to get that rate down.
Are you finding the process a bit exhausting? I am just finding the process of reorganizing my finances, adjusting spending, really taking account - tiring, and some what desperation inducing. From the sounds of it you are doing well - its just a matter of hanging in for the long haul. You have cut your expenses. You are actively attacking your debt. You are taking an honest accounting of your choices. GOOD JOB!
If anything I'm impatient. I really, really don't like how much I look forward to getting paid. I get excited for my paycheck to post, so I can allocate it in YNAB. It's good, but I don't like the way it makes me feel like time is flying. I'm trying to be much more "mindful" of the present moment, and I think once I get out of financial hell I will be able to live more relaxed again. I just get a little depressed by my lack of flexibility in my current situation. I'm focused on my mission of having a net worth above $0, but it is difficult to show to work week after week knowing that your next 15 paychecks will be transported back in time to pay for the chinese food you didn't even need.
I literally have dreams where I pay off my debt in full. I saw a $15,000 watch last night and I thought of it like this: "Wow.. if I stole that watch I could be out of debt tomorrow."
Any way - good job to you too. I look forward to being debt free with you, and eventually, financially independent and TRULY free.
Can't transfer between my cards unfortunately. But I am not paying any late fees. I pay every dollar I can that I have extra directly into the credit cards. I probably post 5 or 6 payments a month as I receive reimbursement checks and get paid. I've been attacking this like a wild man. I have dreams where I pay off these cards. DESTROY IT.
Mint estimates my credit score at 630. I have 2 "marks" for paying late on one of my credit cards back in 2012. The real cause of the poor credit is that I've had both of my credit cards maxed out for two years. I maxed them out and only paid minimums. So far in 2015 I've already reduced that by nearly $5000, so hopefully my credit is on the way up. Also, I closed a credit card in 2013 that had one mark on it for late payment.
I don't necessarily feel like the car is a noose, but I do think about it and feel that it's unnecessary. I like driving it, and I spend a lot of time in it.. but it's existence in my garage is a bit contrary to my goals.
Call up the credit card company and ask if they will lower your interest rate. Mention that you haven't had a late payment in over two years and that you have been making large, steady payments. If you've had them maxed out for the past two years, I'm assuming that you've been using these cards consistently. Say that you have been a loyal customer to the credit card company. The worst they can say is no. If they reject your request for a lower interest rate, then ask them to increase your credit limit. This will help your credit score by giving you a better debt ratio.
I called them back in October of last year, when I was still carrying a basically full balance and they said no. I've paid down about $5000 of that. So I've paid about 30% of my debt down. Think it's an appropriate time to call and ask again? Later this week I'll be applying another $1500 payment to the balance. Once that clears maybe I should call.