So Sick of Debt

Ok, so things have been going pretty well. So of course, something has to come up to rock the boat a little, doesn’t it?

Ihave a little car that we owe no money on. It isn’t worth much but it is a very reliable car. I ‘ve never had a breakdown in all the time we’ve had it (8 years) and it generally doesn’t cost much in repairs.

However, the paintwork is a different story. We live in a hot climate. In fact, it’s so hot that a lot of Aussie car companies do testing in my city to see how their paintwork handles the sun! Consequently, the roof of my car has been starting to discolour quite markedly. Obviously, I can handle driving a crap-looking car so I never worried about it. Then my husband backed into my car with his `tank’. My car has had a noticable dent since then (of course, not a scratch on his car). Needless to say, everyone jokes about me and my driving now, which grates on me when it was his fault!

Anyway, we’ve had some heavy rain recently and suddenly, the other day I noticed water had gotten under the acrylic covering the paintwork on the bonnet.  The paint has `bubbled’ over the centre of the bonnet now and seems to be getting rapidly worse.

OK, I’m strong but now people are starting to stare as I drive past. I’m starting to get embarassed when I drive it. So, even though I know repainting is an expensive job, I went to get a quote.

The estimated cost of fixing everything? $3500! This includes fixing a couple of other bad scratches and little dents on one side of the car.

What makes it worse is that without the dent my husband made, the cost would be halved. I asked the guy about just painting the bonnet and the roof, but as he pointed out, why bother fixing those if you are still going to have a big ugly dent on one side? And I have to agree.

I feel I’m in a predicament. If I fixed the car, I would probably still only get $3500 in trade-in value for it. At the moment, I’d get virtually nothing as it wouldn’t be worth doing up by a dealer. But even if I write it off, get rid of it and buy a $6000 car (thereby needling a loan), there’s no guarantee that the car I get wouldn’t be a lemon. I don’t even know what I would get for $6000 these days.

So part of me is inclined to get the car fixed so I can keep it for another 4-5 years. I definitely won’t keep it that long in its current condition - every girl has her limit to frugality. Does anyone have a point of view to share on this? I’ll try to post a photo of the way it looks later today so maybe readers will understand my situation!

Do other personal finance enthusiasts ever find themselves in a quandary like this? We have all our money in and out planned out for the next year - which debts we’ll pay off, how much we’ll be able to save for a house and what expenses we know we’ll have along the way. We keep a billpaying account that automatically deducts a set amount from our main account each week. Then as the bill falls due, we pay for the item. It’s different to an emergency fund because we constantly access the money, and also because often we still have to jiggle a bit (pay that bill this week, then pay that bill a few weeks later, depending on the current balance). We have also learnt to add costs like Christmas presents/food, family birthday gifts and clothing to the bill-paying account formulation, because otherwise we have to figure out how to pay for them from the tiny amount we leave for miscellaneous/fun each week. So anyway, we realised this week that my husband was going to get cash back in his tax return this year. That hasn’t happened for a long time … usually we owe them money! The question is, what do we do with it? I know  you are screaming that we should put it towards our debt, and I am inclined to agree, but then I think … may be we should buy some clothes. And I’m not trying to convince myself, out clothing situation is dire … my husband has two pairs of shoes, one of which is falling apart. We haven’t bought new clothes for ages and it really is starting to show. My husband needs to look pretty professional now he is in upper-middle management, and he also has so few casual shirts that he tends to wear old work T-shirts on the weekend (he says they’re comfortable). Meanwhile, I need to look decent when I turn up to the hospital (I’m a medical student), and none of my clothes look quite right at the moment. Maybe we should devote a little cash to fixing our clothing crisis?? It’s really hard for me to say that because the $800 would make a huge difference to our debt level and/or our savings. However I’m acutely aware that as soon as our debt is paid off (in about a year) we will hopefully buy a house, and until I start work as an intern six months later (18 months’ time), we won’t have a spare dollar once the mortgage on that is paid.  And I also know that when you’re on a budget as strict as ours, and its nt going to change any time soon, you need to let loose occasionally. I guess we’ll make the decision when the money actually arrives. In the meantime, we should just enjoy the fact we’re getting any money back at all!