Posted on 02/26/2013 2:31:01 AM PST by Kaslin
Dear Dave,
I’m 27 and married, and we have two kids. I make $90,000 a year, but we have $80,000 in consumer debt—$48,000 of which is in car loans. The rest is credit card debt. My wife’s parents have offered to let us move in with them so we can get out of debt faster. Do you think this is a good idea?
Kevin
Dear Kevin,
If I were in your situation, I would not move in with the in-laws. You’ve got an absurd amount of money wrapped up in those cars. I’d sell the stupid things, start living on a budget and paying down debt, and keep my dignity.
In my mind there are only two scenarios where you’d even consider taking the in-laws up on their offer. One is where they’re absolutely wonderful people and you have a great, non-toxic relationship with them, where everyone involved knows their boundaries. Even then, I’d only consider this if it were for a very short, agreed-upon amount of time.
The second scenario would be if moving in with the in-laws were the only way to accomplish your goal. And you don’t pass that test. You guys can get out of debt pretty quickly if you’ll just lose these ridiculous cars! Think about it. If you had two little paid-for beaters, your lives would be so much different. You could even save a little money on the side while you were paying down debt and buy a better car as soon as the debt was gone.
If you can’t tell, I’m pretty big on maintaining dignity. You might love your cars so much that you’re unwilling to make the sacrifice. Not me. The money going into your automobiles is insane, and that’s your biggest problem!
—Dave
Dear Dave,
What do you think about the HARP program, and what exactly is it?
Ivy
Dear Ivy,
The Home Affordable Refinance Program is designed for people who have made their payments on time but are underwater on their mortgages. Being “underwater” means they owe more on their homes than the homes are worth. So basically it gives them the opportunity to refinancetheir home loans.
The HARP program is the only part of the Clinton administration’s Making Home Affordable program that actually worked. And to be honest, it has worked well. In contrast, the recent Home Loan Modification program is a piece of junk and all about political posturing. About 93 percent of the people who applied for a home loan modification didn’t get one. It was just another case of the governmentpretending to do something.
I’d advise looking into the HARP program if you’ve got a good credit history and you’re underwater on your current home. Lots of HARP program applications are being approved, and the deals are closing. That’s what really matters when you find yourself in a situation like this.
—Dave
I’ve been through that. I have not changed my own oil in about 20 years. I do my own brake jobs, however. I consider the cost to have it done vs how long it takes me to do it. It’s very cost effective. Anything that is easy to do, but costly to have done, I do myself.
I seem to know more about fixing cars than any of the people I know who don’t do it as their day job.
I’m about to have my brakes done. With the Prius, you don’t have to do this often, since the motor/generator does a lot of the stopping for you.
But I’m at 8 years and 140,000 on the one car, and I’ve worn them pretty good — to the point where I think they’ll recommend replacing the rotors (or maybe just turning them).
I don’t expect to drive the car past 250,000 miles, so I think this will be my only brake job. So it will cost me a bundle, and I’ll be done with it.
I did my own brakes in my older cars, and would buy rotors in a local junk yard where they would turn them for like $10.
I replace the rotors when I have brakes done now. They are not that expensive. I do my own brake jobs because it usually takes me about 15 minutes per wheel. I use dust free pads that don’t really cost all that much.
Oh, and I just did the first job on my Scion xB. It had 115k miles on it. When you commute 122 miles a day on open highway you get a lot of miles out of your brakes. :-)
Yes, I can see that. My daily commute is 3 miles one way. A lot of stop and go. Obviously, most of the miles on the car are not my commute, but family vacations, where I pretty much ignore the existence of a brake.
In Seattle, my commute was 8 miles one way, but I rode my bike. ;-)
Meanwhile my wife’s 300m needed new brakes every 30k miles. The first time I bought new rotors. Then, after I did the brakes, I had the old rotors turned and stored them in the garage. The next brake job, I swapped them out and repeated. I just did a brake job at 170k. I threw the old rotors away this time.
buy more
Interestingly, that is the same advice for the question "So if gold goes up, what then?" Also "So, if gold hits a new record, what then?"
In this fashion, gold is a lot like Global warming. No matter what the temperature or weather does, it's because of global warming.
The real fear is this -- the day when the world wakes up, rubs their eyes, and collectively states "What do we need Gold for? It is pretty much a useless metal that isn't even all that shiny, has a supply that far outstrips the known actual needs in manufacturing, and was only popular because in ancient times, it was the easiest metal to use to make things pretty."
Maybe that will never happen. But supply and demand can be a harsh mistress, and right now the biggest demand for gold is people who want to take it and bury it in their back yards -- kind of like recycling, returning it to the ground from whence it came. When people decide it would be easier to just leave it in the ground to start with, gold will end.
The Bible of course says that will happen in the end times, when a piece of bread would buy a bag of gold.
I'll say this for Beanie Babies -- at least you could play with them.
buy more
Relevant story via drudge today:
“New Cars Increasingly Out of Reach for Many Americans”
http://finance.yahoo.com/news/cars-increasingly-reach-many-americans-145957880.html
Dave Ramsey ping
Dave Ramsey Ping list. Kaslin has been busy!
What the hell IS this thread? ‘Car Talk with Click and Clack?’ LOL!
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