So Sick of Debt

I checked my car loan account, and instead of a balance owing of $8265, the balance stands at $8302.

*sigh* Why the extra $35 or so?

Well, first of all it’s time for the all-important half-yearly $25 administration fee. What a crock, they do NOTHING for that money that isn’t more than covered by their profit from the interest. However, it’s part of the terms of the loan, I’ve always known about it and I just have to accept it.

But as well as that, my interest rate has gone up enough to add another $10 or so, based on last month’s balances. By the projected end of this loan (18 weeks and counting by my sped-up timeline) this will cost me an extra $50 minimum in interest. Aaargh!

(On the plus side, I probably would have been more disappointed if I’d thought I’d cracked the $8K mark, only to find this had happened and pushed me back over it again!)

Of course, I could probably cope with this better if I didn’t get a letter almost every month telling me how I am welcome to `redraw the $xx in extra repayments you have made’. Currently I am eligible to redraw $4172. But there are strings attached - that ubiquitous $25 fee is charged for accessing the redrawn funds.

Ha! You don’t suck me back in that easily …

… But what’s that you say? I could pay for new clothes and that `well-deserved holiday’ and maybe even borrow a little extra to get my next car?

La! La! La! La! (*fingers in ears*) I’m not listening!

I am SOOO not borrowing money to buy a car again!! 

I have had lots of ups and downs over the past day or two. I’ve spent too much of my precious time trying to figure out how I can afford another car.

Regular readers will know about the costs associated with returning our cheaper little car to an aesthetically appealing exterior - projected to be about $3500 on a car worth only about $4000 once the work is done! I also currently have a water leak in the engine, causing it to overheat (I have a bill-pay account with enough in it to cover that work though).

The simple answer is that we’ve worked too hard over the past 8 months to return to old habits. I am not going to buy a car with a personal loan, or an extension of my current personal loan (for the bigger car). Or a credit card on a balance transfer, or any other purchase method that involves me not having the actual money in the bank to do it.

I can NOT watch our car debt climb again. I just can’t do it.

So we’re going to `live like no-one else so we can live like no-one else’, as Dave Ramsay says.

I’m going to keep the car, fix the overheating problem, keep the car looking as neat as possible and ride out the year without fixing the exterior. In the meantime, I’m going to save and work an extra shift here and there so we can buy another (but nicer) used car outright.

Every morning when I drop off my son to kindy, we arrive about the same time as this other mum. This woman works at the same place my husband does, where he is in a relatively high-profile position. We say hi to each other now and then.

She always looks at my crappy little car with a truly horrified expression. I’ve seen her stare a little too long multiple times! She is about mid-twenties and drives a beautiful black SUV. I don’t know what she and her husband make but I don’t think it would be that much. I think she wonders why we wouldn’t trade up, given that my husband earns a decent wage, probably a lot better than hers.

I have been a bit embarassed over the state of my car, especially because of the peeling paint (not the age of the car), and seeing her each morning has probably worsened that. But then I think, this is us! This is our decision. She’s not even a friend of ours! We drive an old car to improve our financial future. Get over it!

A lot of people tell me I should get a new car because `you’ll be earning money soon’ and we’ll be able to pay it off quickly.  However between student debt and lack of savings power over the past 6-8 years (and missing out on buying a house in a booming Australian market while I studied) I don’t think my family will be splashing out on a Porsche any time soon!

Anyway, now it comes to the point of this post. I am going to come down hard on this car debt. I want it gone.  That’s because I am SO SICK OF DEBT!

With interest accrued yesterday, the debt currently stands at $10,545. So I am scrounging $600 from our earnings this week to get it down under $10,000! A milestone if ever there was one.

My next goal is to get it under $8000 in one month. Watch us get there!

As you can see I am $10420 in debt for my car (which my husband drives). The car that I drive requires $3500 in aesthetic repairs, plus as of yesterday it appears to be overheating.

(*sigh*)

I so want to be out of car debt but I am also so over the car I drive. If I don’t finance another car within the next 6 months, I know I will (at least) have to make saving for another car my next priority.

So investments seem to be going back down the list …. again.

This sucks!

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!