Author Topic: Reader Case Study - Should I sell my car?  (Read 4105 times)

ojwil

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Reader Case Study - Should I sell my car?
« on: September 20, 2015, 04:45:43 PM »
Life Situation: 2 adults in what would be considered domestic partnership, file independently.  Lived in Louisiana all life, recently moved to Texas in the past 2 months.

Gross Salary/Wages:
Me: ~1400 monthly
Her: ~1200 monthly

Pre-tax deductions: None

Taxes: We normally net around $2000 a month

Current expenses monthly:

Rent: $850
Car Insurance (both): $190
Car Payment (my car): $128
Health Insurance (me): $44 - ACA subsidized
Cell Phone (both): $167
Food (both): $300
Misc: $75
Medicine (her): $115
Fuel (both): $75

Liabilities:
Car Payment 2005 Kia:
Original Date: Nov 2014
~$2700 original
~$2100 left currently

Credit Card - Capital One Mastercard
175 dollar line right now

Student Loan Payment
Original Date: August 2010
~1600 left currently

Specific Question(s):
Okay, so as you can see I'm in a bit of a situation.  I need more money and I'm not exactly sure where to start.  I have been reading the blog and I was thinking about selling my car.  I went without a car for about a year and a half before I bought my car and I know how to navigate even the most non bike friendly streets.  I live 8 miles from work and usually start around 330 am.  so I would need to wake up at 230am every day which would be a bit of an adjustment but I think I would be alright.

Blue book Value of my car is around $2600 in my current area and I feel like I could lower that a couple hundred, pay off my loan and still have some left over to get my bike up to commuting standards (lights, mirrors, spare tubes, etc.).  That would free up around $350-$370 monthly to give me some breathing room.

As far as everything else goes, I am looking in to articles about my grocery spending, like killing your $1000 grocery bill.  My phone is locked in to a contract so no luck there.  Also we rent someone's garage unit with utilities, cable, internet included.  It is as cheap and convenient as you can find in this area.  It's on a very private street at the end of a cul-de-sac in an affluent area with no crime.  I'm not moving to a different area and risking the peace of mind we have now with a safe place to stay with a very understanding, quiet, and accommodating landlord with whom we have a great relationship.

My goal right now is to enroll back into CC to get my AAS in radiography to bump my salary up to a respectable level and hopefully squirrel away some money to invest.

Also, this is not just about the car.  If you can find any other way to kill my budget please let me know.

Be easy on me,
Otis

Valetta

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Re: Reader Case Study - Should I sell my car?
« Reply #1 on: September 20, 2015, 05:21:59 PM »
Do you typically get a tax refund? If so, you probably should change your withholding. Your income is so low that you should be paying very little in taxes. That will improve your cash flow.

wordnerd

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Re: Reader Case Study - Should I sell my car?
« Reply #2 on: September 20, 2015, 05:28:08 PM »
With your limited income, it seems to make sense to sell the car. Leaving at 2:30 am sounds terrible, but you're already somewhat used to the schedule. At least at that time of day, you have fewer cars on the road.

I would also look into reducing your cell bills. Check out I.P. Daley's excellent threads on this:
http://forum.mrmoneymustache.com/share-your-badassity/communications-tech-son-of-the-superguide!/msg230579/#msg230579
http://forum.mrmoneymustache.com/share-your-badassity/communications-tech-discussion-thread-1/
http://forum.mrmoneymustache.com/share-your-badassity/communications-tech-son-of-the-superguide!/msg230579/#msg230579

ojwil

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Re: Reader Case Study - Should I sell my car?
« Reply #3 on: September 20, 2015, 05:30:51 PM »
Do you typically get a tax refund? If so, you probably should change your withholding. Your income is so low that you should be paying very little in taxes. That will improve your cash flow.

usually a pretty small refund, $200-$300

Matt_D

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Re: Reader Case Study - Should I sell my car?
« Reply #4 on: September 20, 2015, 05:40:22 PM »
What are your marketable skills? Sounds like a situation asking for some side income!

That, or look into changing up jobs? What can you do to get a salary increase? Are there promotion opportunities, could you switch companies, etc.?

Selling the car sounds like it could be a good move for now (heck, I'm always encouraging of going car-free if you can do it!), but ultimately you're going to need some additional income too.

Kaikou

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Re: Reader Case Study - Should I sell my car?
« Reply #5 on: September 20, 2015, 06:50:43 PM »
I would focus more on the income side of things. What can change right now to up your income? Deliver pizzas or drive for uber?

I am in the same focus right now.

ojwil

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Re: Reader Case Study - Should I sell my car?
« Reply #6 on: September 21, 2015, 06:07:57 AM »
What are your marketable skills? Sounds like a situation asking for some side income!

That, or look into changing up jobs? What can you do to get a salary increase? Are there promotion opportunities, could you switch companies, etc.?

Selling the car sounds like it could be a good move for now (heck, I'm always encouraging of going car-free if you can do it!), but ultimately you're going to need some additional income too.

We'll definitely one of the things I have looked into is walking dogs in the side. My area is pretty affluent and I think there is definitely room to open a side gig for dog walking and pet sitting. I walk for a couple people right now every now and then, I have references and even mocked up a website using wix. My only thing is I'm terrified of starting something like that only to fail. I'm not a good salesman and I have no idea how to market my services. It just seems silly to me because I know people make money doing it but I would never pay someone to walk my dog. And I sometimes think if I wouldn't buy it why would anyone else?

As far as promotions go I work retail so I can always work my ass off and get some sort of promotion but it would likely lead to a 1-2 dollar raise max. 

ShoulderThingThatGoesUp

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Re: Reader Case Study - Should I sell my car?
« Reply #7 on: September 21, 2015, 06:22:52 AM »
What are your marketable skills? Sounds like a situation asking for some side income!

That, or look into changing up jobs? What can you do to get a salary increase? Are there promotion opportunities, could you switch companies, etc.?

Selling the car sounds like it could be a good move for now (heck, I'm always encouraging of going car-free if you can do it!), but ultimately you're going to need some additional income too.

We'll definitely one of the things I have looked into is walking dogs in the side. My area is pretty affluent and I think there is definitely room to open a side gig for dog walking and pet sitting. I walk for a couple people right now every now and then, I have references and even mocked up a website using wix. My only thing is I'm terrified of starting something like that only to fail. I'm not a good salesman and I have no idea how to market my services. It just seems silly to me because I know people make money doing it but I would never pay someone to walk my dog. And I sometimes think if I wouldn't buy it why would anyone else?

It seems like the cost of failure in dollars here is pretty low. Buck up and do it.

Quote
As far as promotions go I work retail so I can always work my ass off and get some sort of promotion but it would likely lead to a 1-2 dollar raise max.

At your income level, a $1/hour raise is pretty big! $136 extra a month, about, assuming you work full-time and are in the 15% bracket. That's your car payment.

Your rent seems unnecessarily high. I know you love where you live, but there are a lot of decent apartments for less than that.

ojwil

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Re: Reader Case Study - Should I sell my car?
« Reply #8 on: September 21, 2015, 08:07:42 AM »
What are your marketable skills? Sounds like a situation asking for some side income!

That, or look into changing up jobs? What can you do to get a salary increase? Are there promotion opportunities, could you switch companies, etc.?

Selling the car sounds like it could be a good move for now (heck, I'm always encouraging of going car-free if you can do it!), but ultimately you're going to need some additional income too.

We'll definitely one of the things I have looked into is walking dogs in the side. My area is pretty affluent and I think there is definitely room to open a side gig for dog walking and pet sitting. I walk for a couple people right now every now and then, I have references and even mocked up a website using wix. My only thing is I'm terrified of starting something like that only to fail. I'm not a good salesman and I have no idea how to market my services. It just seems silly to me because I know people make money doing it but I would never pay someone to walk my dog. And I sometimes think if I wouldn't buy it why would anyone else?

It seems like the cost of failure in dollars here is pretty low. Buck up and do it.

Quote
As far as promotions go I work retail so I can always work my ass off and get some sort of promotion but it would likely lead to a 1-2 dollar raise max.

At your income level, a $1/hour raise is pretty big! $136 extra a month, about, assuming you work full-time and are in the 15% bracket. That's your car payment.

Your rent seems unnecessarily high. I know you love where you live, but there are a lot of decent apartments for less than that.

That's the thing though, there isn't. I live in what is now basically an extension of Houston and before I found my current landlord I was looking at 1 BR decent apartments that were at the lowest 750. This area is very expensive. And yeah I could move but we moved to this area to be closer to my sister and my cousin and so we wouldn't be too terribly far away from home. Where I'm from you can get a decent 1br for 550 but it's just not possible around here. 850 with utilities and Internet included around here is a damn good deal. Especially considering the peace of mind. I could move farther away from the area to where I was still in driving distance but honestly I don't want to be much farther from work or I won't be able to possibly. commute by bike

MissStache

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Re: Reader Case Study - Should I sell my car?
« Reply #9 on: September 21, 2015, 08:13:36 AM »
Your car insurance seems VERY, VERY high!  Have you tried shopping around and/or lowering deductibles?

Also:  Dog Walking:  Don't be afraid of failure.  No one who ever succeeded let a fear of failure stop them.  So you fail?  So what?  You'll learn what to do better next time.  Even if you can bring in an extra $100/month it's a huge increase for you!  Launch your website today.

HairyUpperLip

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Re: Reader Case Study - Should I sell my car?
« Reply #10 on: September 21, 2015, 08:40:09 AM »
Hey - what's the second car?

Just curious because maybe it's worth selling the other car and keeping the best of the two.

ojwil

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Re: Reader Case Study - Should I sell my car?
« Reply #11 on: September 21, 2015, 09:07:47 AM »
Hey - what's the second car?

Just curious because maybe it's worth selling the other car and keeping the best of the two.

Other car is my GF's and her mom's.  Both names on the title.  it's a 2009 Jeep Liberty I think KBB has it upwards of 10k but she needs it for her job.  She works for a cleaning service and drives to 1-2 locations sometimes in Houston.  They reimburse for gas at a pretty solid rate.  If I sold my car I would be relying on her car and my bike, which would be fine because the only time I drive my car is to work and back.  Any other time and we are in her vehicle.

Quote
Your car insurance seems VERY, VERY high!  Have you tried shopping around and/or lowering deductibles?

Also:  Dog Walking:  Don't be afraid of failure.  No one who ever succeeded let a fear of failure stop them.  So you fail?  So what?  You'll learn what to do better next time.  Even if you can bring in an extra $100/month it's a huge increase for you!  Launch your website today.

Insurance is both of ours combined, mine is 100 hers is 90.  I'm a 22 year old male with a couple of speeding tickets in an older car.  I could look around but I don't think I'm gonna do much better than what I'm at now.

And yeah I think you're right.  My only costs upfront would be a domain name, leashes, treats, and maybe some low-tier advertising.  I think I'm gonna at least give it a shot.   Thanks.

HairyUpperLip

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Re: Reader Case Study - Should I sell my car?
« Reply #12 on: September 21, 2015, 09:34:58 AM »
Good luck. Seems like you are willing to make the right choices.

ojwil

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Re: Reader Case Study - Should I sell my car?
« Reply #13 on: September 21, 2015, 03:15:11 PM »
Good luck. Seems like you are willing to make the right choices.

Thanks man.  I think with my current health and situation selling the car is something I should do and am able to do, but just reluctant due to the difficult adjustment and mindset it's going to take.

MissStache

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Re: Reader Case Study - Should I sell my car?
« Reply #14 on: September 22, 2015, 06:15:58 AM »
Good luck. Seems like you are willing to make the right choices.

Thanks man.  I think with my current health and situation selling the car is something I should do and am able to do, but just reluctant due to the difficult adjustment and mindset it's going to take.

I'm going to recommend that you just take the plunge!  If you think about it too much you will justify yourself out of it, but I bet once you go a little while without a car you will kick yourself for not doing it sooner!  And if it turns out in a few months that you are really regretting it, you can buy a cheap used car with all the cash you're making from your dog-walking :)