Author Topic: Shedding the second car- are we being too intense?  (Read 4217 times)

mrsbabs

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Shedding the second car- are we being too intense?
« on: October 28, 2016, 02:22:45 PM »
Hi everyone! First post here, long time lurker.

My husband and I got married 2 years ago and were both in hellacious financial shape when we met. Student loans, credit cards, garnishments, you name it. We had an "OMG we just got married now we have to be adults and have adult finances" moment, so we knee-jerkingly filed chapter 13. We have 4 years left on that and have been living in EXTREME frugality ever since. I'm talking about reusable everything except toilet paper, pasta 3 meals a week, and washing baggies. Amy Dacyczyn stuff.

Anyway, we were able to save up about $5000 in an emergency fund last year because we are obviously paying our debts in one consolidated payment and have allocated savings items in the budget the bankruptcy trustee assigned. 

We have had a couple major car repairs that wiped out our savings, plus we had to move out of our cheaper townhouse because our neighbor was running a crackhouse. No joke.

Now that we have a whole $8 left in savings, we are kind of freaking out. We have a bare-bones budget as it is, and everything else is going into savings. My husband came up with the idea to sell my car and put that money in savings to get a jumpstart. We have 2 paid for Swedemobiles that are both worth around $3000.

My first thought is that this is great. We'd save about $800/year on insurance, $100/year on registration, plus gas and maintenance. Then we would get a jumpstart on our savings and not feel like we are panicking.

Are we doing the right thing here? Thanks for any input!

terran

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Re: Shedding the second car- are we being too intense?
« Reply #1 on: October 28, 2016, 02:40:43 PM »
What would it do for each of your commutes? Can either of your walk, bike, take public transit, or get a ride from a coworker to work? Could you carpool with each other, or do you live in opposite directions with long commutes? If you have any other options for getting to work then going to one car sounds like a great idea.

MsPeacock

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Re: Shedding the second car- are we being too intense?
« Reply #2 on: October 28, 2016, 02:41:06 PM »
1.  Do you need the car for getting to work (and other means of transport are not available)?

2. How about ditch both Swedenmobiles for one reliable car that is less expensive to repair and insure?

nereo

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Re: Shedding the second car- are we being too intense?
« Reply #3 on: October 28, 2016, 02:49:25 PM »
FWIW, here's our experience.  When we first started dating my wife and I were both very independent and each of us own our car. We continued to have 'our-car' and 'your-car' for the first two years despite the expense... besides neither of us wanting to giveup our car we worked in opposite directions.
When we decided to move to a new city and finally didn't need a car for daily commuting we hemmed and hawed but ultimately decided to sell one and become a 1-car family.
best. decision. ever.
Seriously, once the option of using two cars at the same time was gone our lives almost magically shifted so we never needed them. We've become more efficient about errands and its saved us more than we anticipated (parking permits, registration, taxes, extra fuel, extra repairs, depreciation... not to mention the $6k we got for selling one car).

Now - this wouldn't have worked if we both had a commute; currently she is able to walk and I either bike or take the bus.
In the end I'd say if you're considering it, just do it.  Cars are commodities - if the experiment ends up not working out for you, you can always find another car to buy.

mrsbabs

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Re: Shedding the second car- are we being too intense?
« Reply #4 on: October 28, 2016, 03:01:36 PM »
Thanks for your answers! Luckily, I don't commute. I have a tiny little etsy shop, but my real gig is homemaker. Our new neighborhood is 10 minutes from my husband's office. I do have to drive 15 minutes Weds-Fri to pick up my stepson at school, but other than that, I am able to stay home and go to town 1-2x for groceries, etc...

Once we do shed the car, our plan is to have him take the car to work Monday, Tuesday and Wednesday, come home for lunch on Weds, and then I take the car that afternoon and for the rest of the week. I'm really excited about the idea, because I think it'll simplify things even more, and make us feel less guilty about having 2 cars that mostly just sit in the parking lot or garage.

I appreciate the input, and @nereo, I'm so happy you have had a positive experience! We did this once before, but he had a 40 minute commute one-way, and it just didn't work. I'm so happy to hear of someone who is doing this and isn't constantly fighting for use of "the car".
« Last Edit: October 28, 2016, 03:05:16 PM by mrsbabs »

cchrissyy

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Re: Shedding the second car- are we being too intense?
« Reply #5 on: October 28, 2016, 03:30:56 PM »
I don't think you can sell a car during chapter 13

v8rx7guy

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Re: Shedding the second car- are we being too intense?
« Reply #6 on: October 28, 2016, 03:31:17 PM »
Thanks for your answers! Luckily, I don't commute. I have a tiny little etsy shop, but my real gig is homemaker. Our new neighborhood is 10 minutes from my husband's office. I do have to drive 15 minutes Weds-Fri to pick up my stepson at school, but other than that, I am able to stay home and go to town 1-2x for groceries, etc...

Once we do shed the car, our plan is to have him take the car to work Monday, Tuesday and Wednesday, come home for lunch on Weds, and then I take the car that afternoon and for the rest of the week. I'm really excited about the idea, because I think it'll simplify things even more, and make us feel less guilty about having 2 cars that mostly just sit in the parking lot or garage.

I appreciate the input, and @nereo, I'm so happy you have had a positive experience! We did this once before, but he had a 40 minute commute one-way, and it just didn't work. I'm so happy to hear of someone who is doing this and isn't constantly fighting for use of "the car".

Do you have kids that you are staying home with?  If not, getting another full source of income could help your situation out big league.

Sibley

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Re: Shedding the second car- are we being too intense?
« Reply #7 on: October 29, 2016, 09:50:07 PM »
If you don't have kids at home, or if they're in school, you getting a job would help your situation a lot. Part time, full time, whatever.

solon

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Re: Shedding the second car- are we being too intense?
« Reply #8 on: October 29, 2016, 09:54:05 PM »
In general I'm in favor of taking radical steps to achieve stability. It's scary, I know, but after you get rid of one of the cars, you'll find ways to live on the other one. I think this is one of those "have faith" moments.

frugaliknowit

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Re: Shedding the second car- are we being too intense?
« Reply #9 on: October 30, 2016, 05:13:30 AM »
Absolutely get rid of the Swedemobile.  You'll love when you see your numbers improving and your fitness level increasing due to more walking and biking:)

Villanelle

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Re: Shedding the second car- are we being too intense?
« Reply #10 on: October 30, 2016, 06:19:45 AM »
Ditch a car.  And get a job.  Homemaking is a lovely choice, but you aren't in a position to make that choice.  You are in a hair-on-fire emergency.  Get a job.  If there's a kid at home with you, find something part time and/or opposite hours of your DH.  While that may suck, you can't afford not to have a second income right now.  This problem is far bigger than just selling a car.  When you are stable again, you can go back to homemaking with an Etsy side gig. 

And if you now live 10 minutes from your DH's work, he should be biking.  Every day.  Why would he drive three days a week?

CarrieWillard

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Re: Shedding the second car- are we being too intense?
« Reply #11 on: October 30, 2016, 08:18:42 AM »
I don't think there is anything "too intense". One sometimes has to create "Escape Velocity" to get somewhere in life. Then, you can coast a little.

Being a stay at home mom doesn't mean you can't earn income. Yes it's harder to do without childcare, but many figure it out. I have a friend who clears $500 a week on Rover.com while homeschooling her kids. I earn money blogging and writing.

I know many women who do virtual assistance work, clean houses (baby is in a backpack or trade off babysitting with a friend/neighbor/grandma), babysit other people's kids, etc... it can be done. I say this because for me, putting my kids in day care was an unacceptable option, therefore I made it work without it.

Cycling Stache

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Re: Shedding the second car- are we being too intense?
« Reply #12 on: October 30, 2016, 08:49:49 AM »
I don't think you can sell a car during chapter 13

A quick Google search suggests that you should look into this before selling the car.  You might need court approval. 

That said, if you can, sell the car.  We have a family of four and my wife and I work close together.  We dropped the second car a few years ago, and haven't needed a second car since.  We just work the schedule around each other, and quite frankly, do more things together.  I also occasionally take my bike or the metro if I need to get somewhere while my wife is out with the car. 

If something comes up, you can take an occasional Uber, which would be much cheaper than having the second car.  But even that will likely happen much less often than you think once you get used to having one car.  Not only will you (potentially) generate money from the sale, you will cut out the recurring cost of insurance for the car and routine maintenance, and unpredictable costs if something goes wrong with the car.  And it's one less thing to worry about.

Good luck!

Lake161

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Re: Shedding the second car- are we being too intense?
« Reply #13 on: October 30, 2016, 10:34:19 AM »
We found it pretty easy to go down to one car. The biggest learning we had was the importance of keeping a shared google calendar. That way I could check where he needed to be before making any commitments that required driving.

mrsbabs

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Re: Shedding the second car- are we being too intense?
« Reply #14 on: October 30, 2016, 11:22:56 AM »
Thanks so much for your input, everyone! I agree on checking with the court about selling the car- I'm emailing our attorney tomorrow. If we are allowed, we aren't going to waste any time. I didn't know about that- so thank you for pointing it out!

I also see what everyone is saying about earning income. Unfortunately, I can't earn more than 10% of my husband's income, otherwise our Chapter 13 plan has to be recalculated and approved, which means additional attorney fees and court fees. I do pretty well (100-300 extra per month) on the etsy side gig and am planning on starting an ebay purge next week, all of which can go straight to savings without affecting income because we already own the items.

I really appreciate all the replies- sometimes I feel like this chapter 13 situation is so difficult because we can't be as crazy as we want, and we are basically required to stick to an income level set by the court. If we could do it over again, I don't think we would have done it.

Thanks again!

JLee

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Re: Shedding the second car- are we being too intense?
« Reply #15 on: October 30, 2016, 12:37:49 PM »
Have you priced other car insurance companies?  $800/year per car seems wildly excessive for something worth $3k.

ReadySetMillionaire

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Re: Shedding the second car- are we being too intense?
« Reply #16 on: October 30, 2016, 01:12:25 PM »
Thanks so much for your input, everyone! I agree on checking with the court about selling the car- I'm emailing our attorney tomorrow. If we are allowed, we aren't going to waste any time. I didn't know about that- so thank you for pointing it out!

I also see what everyone is saying about earning income. Unfortunately, I can't earn more than 10% of my husband's income, otherwise our Chapter 13 plan has to be recalculated and approved, which means additional attorney fees and court fees. I do pretty well (100-300 extra per month) on the etsy side gig and am planning on starting an ebay purge next week, all of which can go straight to savings without affecting income because we already own the items.

I really appreciate all the replies- sometimes I feel like this chapter 13 situation is so difficult because we can't be as crazy as we want, and we are basically required to stick to an income level set by the court. If we could do it over again, I don't think we would have done it.

Thanks again!

Attorney here that actually moved into the office of a retired attorney who specialized in Chapter 13. I don't know 1/100th of what he knew but I did have to do some work to help him close some of his files, and I'll say this: your logic of intentionally decreasing your income because of a Chapter 13 doesn't add up. Chapter 13 is not meant to be a prison to suppress your earning potential. It's meant to create a balance between paying your creditors and getting a fresh start.

If you got a job but did not increase your reasonable living expenses, then yes, you would likely have to report to the trustee and perhaps have your payments adjusted. The Chapter 13 payment would likely increase. But this is a rather routine process, and we are talking pretty nominal court costs and attorneys' fees.

Say you could make $2,000 per month. You might pay $500 in attorneys' fees and costs and have to pay an extra $200/month on your Chapter 13 payment plan. But you've somehow come to the conclusion that $24,000 in income is not worth it because you might have to fork over $500 in attorneys' fees and an extra $2,400 in payments on your Chapter 13. That doesn't make any sense.

I might be wrong (again, I'm not a bankruptcy lawyer), but the worst thing that could happen from earning more money is having payments increased. But that means you'll be out of the Chapter 13 sooner!

I would call your attorney ASAP.
« Last Edit: October 30, 2016, 01:25:13 PM by ReadySetMillionaire »

ReadySetMillionaire

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Re: Shedding the second car- are we being too intense?
« Reply #17 on: October 30, 2016, 01:14:24 PM »
Also, another note: not working for this long is going to CRUSH your long term earning potential. You are not only foregoing tens of thousands per year right now, but you might be talking hundreds of thousands throughout your earning career.

ReadySetMillionaire

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Re: Shedding the second car- are we being too intense?
« Reply #18 on: November 02, 2016, 02:46:52 PM »
This hypothetical has continued to ponder my interest. I got lunch with a partner here who has been practicing bankruptcy law since 1966. I posed the facts to him and the thought process that OP can't increase her income because of everything stated above.

His response: "Sounds like this person is using the Chapter 13 bankruptcy to cover as a reason not to work." He noted this was especially true since costs, fees, etc. are paid on a going-forward basis.

So OP, if you're still reading this, go and increase your income. It's worth it.

frompa

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Re: Shedding the second car- are we being too intense?
« Reply #19 on: November 02, 2016, 07:25:31 PM »
As you didn't ask whether you should go get a full time job, I won't jump on that one, but as to the question you asked about -- getting rid of one of your cars -- I concur with those who have said, "Do it!"  Your success at being a one-car family depends on the specifics of your situation, but you've provided enough information on that front.  You don't need a car for work, your hubby needs one occasionally for a short commute.  You might also check to see what public transit options you have, or look into ride sharing and the like.  We are a one car family, and it works quite well because we bike and walk many places, and we have the option of a bus or uber ride if push came to shove.  Save your insurance, maintenance, gas, registration $$ on that second car, pronto! Good luck.