Do We Need Two Cars?

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Crowded CarWe’re in a bit of a pickle right now.  Our second car is on its last leg… finally.  I mean, what did we expect?  It’s a 1993 Toyota Corolla and it has been in my family for years!  I think my oldest sister learned to drive in that car.  We’ll be ok though, right?  We don’t need more than one car. That is, if we don’t ever have to go anywhere as a family.  Our other car is a reliable 2004 Honda Civic that we purchased about 6 years ago in a moment of weakness.  We’re still paying for it, although not for much longer.  Everyone keeps telling us that we need a van, and I guess they’re right.  We are a family of 6 after all.  We need to be able to get to church on Sundays.  No question about that.  And, I’m definitely not going to be asking my parents to help us out every week.

So, I guess we’ll have to put our house hunting off a while longer in order to stay on track with our financial plans.  We just did some landscaping, which added a few thousand dollars onto our credit card balance.  So, we’re set to have all of our cards paid off by April of next year.  Once we have those paid off, we should be able to save for a down payment on a house.

It is very tempting, though, to just refinance and include all of our credit card debt in that.  But, we only pay 1.99% on $5000 of credit card debt at this point.  So, to refinance that balance into, let’s say, a 3.5% interest 30 yr mortgage would be stupid to say the least.  We just need to be patient and help each other stay on track.  It will all be worth it in about 5 years when we own a rental property (our current home) and have only our mortgage on our nice new home with plenty of space for our 4 children… make that 6 children in another 5 years.

Now we just have to find a van that is reliable and doesn’t cost more than $3500.  Good luck with that, right?  Maybe we can swing having just one vehicle?  Would it be worth it to sell the Honda for a few thousand dollars and get a van when my husband would have to take it to work every day?  There aren’t many fuel efficient vans out there to my knowledge.  What to do, what to do?

Option #1:  Sell the old car for $500 and buy a used van for $3500

  • Pros:  We would have two cars and a vehicle that our entire family would fit in
  • Cons:  We would have to buy the van on credit and would have to hold off on buying our second home

Option #2:  Sell both cars for $4500, buy a used van with cash, and use the bus for work

  • Pros:  We would have a larger vehicle that our entire family would fit in and we may end up with some extra cash
  • Cons:  All of that extra cash would go toward gas!  NOT fuel efficient at all.  Inconvenient to only have one vehicle.

Option #3:  Sell the old car for $500 and just keep other car

  • Pros:  We would have some extra cash and no additional debt
  • Cons:  We would not be able to go anywhere as a family and would only have one small vehicle

Are you in a similar situation?  Please share your vehicle woes and put in your two cents about the above options.  Which one will it be?  Option#1, 2, or 3?  Our fate rests in your hands!  Until we take it back into our hands of course.

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Debt Reduction Progress

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We paid off a credit card!!!!!!

The month of March was full of uncertainty.  My husband had just found out that he would be unemployed as of April 1st if he didn’t find a job by then.  So, we were hesitant to take our tax return and apply it to our debt reduction efforts.  We kept the $8000 in a savings account until he was hired by one of the premier marketing companies in Milwaukee.

Once he started his new job, we felt it was a good time to pay off one of the credit cards.  So, we’re excited to announce that we’ve paid off about $5000 more of our debt!!  Plus, we now have an emergency fund of $1500 and another $1500 set aside to do some landscaping this spring.  And, last but not least, our income has increased!!!!  So, we are now planning on applying at least $700 a month toward what is left of our credit card debt.  We should be “debt free” (not including our mortgage) by the end of the year!!!

We have two cards left to pay off.  One is still at a 0% APR until the end of August, so we will pay that one off first.  And, the other one is a fixed 1.99% for the life of the balance.  I will have mixed feelings about paying that 1.99%APR credit card off.  Once we pay off that balance, there will no longer be a 1.99%APR.  That credit card offer was a Godsend!  It came at the perfect time too.  I remember when we were considering buying a house and we couldn’t afford it because of our car payment.  Then, we got a balance transfer offer in the mail from our bank credit card.  The balance on our bank credit card was $0 at the time, so I could tell that they were trying to hold on to us as a customer/consumer.  They offered us 1.99%APR for the life of the balance with a transfer fee of 3%, which would end up making our transferred balance nearly $12,000!  Although our balance increased by about $300, the APR decreased along with our monthly minimum payment.  Our monthly payment decreased so much, actually, that we were able to qualify for a mortgage.  About a month later, my sister called to say that the house next door to her would be up for sale soon.  It was all perfect timing, so we made an offer on the house before it even went on the market.  The seller was eager to close and we got the house at a steal of a price.  So, even when the housing market crashed, we still came out of it with equity.

Through all of our financial ups and downs, I can see the Lord’s grace and guidance that has lead us to this point.  Praise the Lord!  Living debt free is just around the corner!

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Debt Elimination Progress

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Well, January is here and tax season is just around the corner.  I’m excited to get a huge chunk of our debt paid off.  Still, there’s nothing like the present when it comes to reaching that wonderful land called debt free.  We’ve done well this past month and were able to pay $700 toward the credit cards.  Over the holidays, we saved money on groceries by taking all the leftovers we could get from the holiday parties we attended.  We also received meals from friends and family after Timmy was born on December 7th.  Little side note:  Having a baby will get you free food! 

Before the holidays hit, I told everyone who normally buys us Christmas gifts that we could really use some gift cards to our local grocery store and Target.  And, what do you know, we received over $100 in gift cards!  It has been wonderful knowing that we could use those to help pay off our debt.  Just one step closer to reaching our goals.

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Debt Elimination Progress

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We’re making progress! I really can’t believe we’re making any progress in the month of December. Normally, we go a little overboard around the holidays and get in the spending mood.  But, since we’ve chosen to opt out of all holiday party gift games and exchanges, we only have our children to think about.  We’ve spent $30 on each of our older children and about $10 on our younger ones who don’t really know what’s going on quite yet.

So, with all of the cutting back, we’ve been able to make an accumulative payment of $300 toward our credit card debt.  Plus, we’ve paid off the midwife!  So, next month we should have an additional $250 to poor into our high credit card balances.  And, once we file our taxes, we should be able to pay off a big chunk.  If we keep sticking to our budget, we may be able to pay off all credit card debt much sooner than expected.

Now let’s just pray that Jesse gets a huge raise in February!

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