You Can’t Borrow Your Way to Freedom
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Should I Sell My Car to Stop an Unaffordable Payment?
Okay, so I have one of them huge car payments. It's about $900 a month. I owe $34,000 on it. It is a 2022 BMW. So my question is... It's only valued at $34,000. The auto trader value is $25,000. I would get about $2,000 back in warranties if I sold it back to the BMW dealer. I have $10,000 in my savings account. So my question is, should I get rid of the car? Because it's kind of hurting us financially paying a car payment that high.
Yeah, for sure. I mean, $900, that'd be nice to have, right? Versus it going to a car payment. Okay, so you said it's valued at, I think you said it's valued at $34,000, but then you looked on AutoTrader and it's at $25,000.
Yes. So I owed $34,000. Oh, okay. I'm sorry. I got you. Sorry. I owe $34,000. It's valued at $25,000. Is that like trade-in? Have you? Yes.
Okay. You don't want trade-in value. You want like a private party value. You can check on Kelley Blue Book for that. That's going to be much higher. And that might get you closer to where you're not underwater on this thing.
Yeah. So let's say it gives you like five thousand more just for the fun of it. OK, so that means we'll just say thirty thousand. You owe thirty four. So, yeah, I would take four thousand out of your savings so that it's, you know, you can like after you sell it right, that you can pay off the remaining of the debt, get the title to the new people and you're done free and clear. And then just I mean, I would just go buy like a five thousand dollar car. Yeah.
The rest of your savings leave a thousand bucks in there.
OK, I actually have an extra car like my luxury car. So I do have a beater. Well, there you go. God bless America.
Our cars have cars in America.
Well, then there you go. Well, so now you don't have to. Yeah. So you don't have to you don't have to spend it. And you guys have 10 grand. What other debt do you have?
Okay, so I'm pretty, the past month, like I've canceled, like I've changed phone services. I got rid of the internet. I got rid of streaming. Wow, good for you. I changed my homeowner's insurance. I paid my car insurance for six months. Um, so I have 190 in a home and it's, my home is worth about 650. Um, and then I, I do have, what I'm trying to work on is my 14,000 in credit card debt.
Okay, perfect. Well, what's crazy about this, you know, all of this math that you have, yeah, you'll only have $5,000 of credit card debt left because you'll put nine of your savings towards it. Okay. And, yeah, you'll be doing great. And that's if you're not underwater. That's right. You will have to put – yeah, yeah, yeah. You may have to put $4,000.
But if you could sell exactly what you owe, if you check Kelley Blue Book and you can get private party value, $34,000, I would do that. Get as much as you can. Get top dollar for it so that you're not having to dip into savings.
Okay.
And then use nine of the ten to knock down your credit card debt, and then you're going to be debt-free in a few months. What's your household income?
Um, so I just took a lower payer paying job as a school teacher. Um, so our household income now is, um, 5,000. That's not a month. It used to be about, yes, it used to be eight and now it's five.
And that's, is that after taxes and everything? Yeah. Okay. That's what you're bringing.
And is this two of you? Is there another person involved here?
Um, yeah.
Okay. And what are they doing for work?
Um, uh, My husband's a contractor, but as of right now with the changing market, he may have to actually look for more work.
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Chapters
7 chapters
1
Should I Sell My Car to Stop an Unaffordable Payment?
0:46–11:07
2
How Can I Budget as a 1099 Side Hustle Worker?
11:07–12:42
3
What Are My Options for Managing Over $250,000 in Debt?
12:42–18:35
4
Is Paying Cash for a House Better Than Financing?
18:35–30:38
5
Is Opening a 0% Interest Credit Card a Good Idea for Repairs?
30:38–36:48
6
How Do I Get My Husband to Plan for Retirement?
36:48–41:23
7
When Should I Start Adding Fun Money into My Budget?
41:23–1:28:09