That does brighten the day (slash car musings)

My freelance check showed up! $1250. Not life-changing but also not bad. I immediately transferred it into the “life fund” which is now over $13,000 again. (It was up to $15,000 or so last year before I moved some of it into my IRA.) Even with that, I am still under $60,000 though! Between the car repair bill, paying rent, and taking my cash draw out…. Close, though, and when I get paid next week I’ll be back over $60K, and also be able to transfer $650 into the life fund and $190 into the emergency fund.

It really does make a difference to be out of debt. I’ve been hesitating lately over my car. It’s kind of on the border of money-pit status, where I have to put $500-1000 into repairs every year, so part of me says “sell it while it still has a bit of value” — maybe $1500, $2000 if I’m lucky — and get a newer used car. But doing that would require either putting an enormous dent in my cash savings, or taking out a loan. Both of those things make me uncomfortable. I really like having a lot of cash on hand. And I really like that, when I get a ‘windfall’ like this freelance check, I don’t have to immediately throw it at debt. I might save money in the long run by switching out cars now (projecting fewer repairs basically) but it would be a big hit on my finances in the short term: both paying for the car, and presumably paying a higher insurance rate. (My current insurance is all of $45.90 a month, including renters’ insurance.)

I just don’t know!!!! Expect this to take up a lot of my thought in the near future 🙂

9 thoughts on “That does brighten the day (slash car musings)

  1. Angie says:

    We’re in a similar place – replaced the transmission on that car last year and this year they’re projecting about $2k in recommended repairs. I’m inclined to make the repairs and keep going. Partially because I’m an optimist that maybe next year there won’t be any repairs, but also I did the math and figure we’d pay at least $4k a year if we took out a car loan, so we might as well keep this car until we reach that point.

    1. thesingledollar says:

      That’s a good metric. Car decisions are SO HARD. My mechanic wants me to invest $1200 in new struts as preemptive maintenance (the current struts are original to 1998.) I take his point but I also just don’t want to drop money into it unless it’s *absolutely necessary*. Inclining more and more towards moving on. But the thought of taking on a loan is depressing.

      1. Angie says:

        Preemptive maintenance is not something I would do with a $2k car, but it is hard to know where that line is sometimes.

        Right now we don’t have any debt besides our mortgage and I would definitely prefer to keep it that way. We could afford to buy a similar car (late model, low mileage import sedan) in cash, but we probably want to upgrade to a car that is a better long term fit for our family, so then the question is whether we take on a car loan to get some newer safety features or spend what I’m willing to part with in cash.

  2. Jason says:

    Glad to see you writing again. I can understand about the car being a money pit. I have to spend $500 today on new plugs, coolant flush, etc. Last year I think I spent over $1000 on it. However, when I think about what it would cost to buy a new one I actually come out ahead. It may seem like a money pit, but when you think about how much you spend monthly on it. It is probably a lot less than a new/used car.

    1. thesingledollar says:

      Yeah, that’s the issue. It’s hard to predict how much you’ll spend each year! For me it’s partly that I don’t like my car. It runs and is mostly reliable but I don’t like the ride. Price is right for now though.

  3. Steve from Arkansas says:

    It’s easy for me to say because I’m on the other side of FI and could go buy a Porsche with cash tomorrow if I wanted to but you really can’t afford to borrow money to buy a car, ever, for any reason. Cars drop in value like a brick dropped on your foot. Even now I buy used cars with cash, and nothing fancy. Car payments will keep you enslaved forever, please don’t go there. The broke people who worked for me, back when I was still working, mostly had way better vehicles than me, and they are still broke, still working while I am retired and wealthy.

    1. thesingledollar says:

      Hi Steve, thanks for the comment. Actually, I could afford to buy a car in cash. I don’t want to, though, because it would take too big of a bite out of my available cash. A good used car that would last a really long time (the kind I would want) would run around $10K, and I have about $18K in cash outside of my retirement accounts. Under those circumstances, *if* I bought (which I very well may not until this one just flat-out dies on me) I’d prefer to put a substantial down payment down and take a smallish loan with a low interest rate in order to spread things out some. I’m not talking about a $30K loan for a new car.

  4. Your freelance work is really paying off!

    “I really like that, when I get a ‘windfall’ like this freelance check, I don’t have to immediately throw it at debt.” Sigh. I can’t wait for this to be me.

    I don’t have a car, but I plan to buy one at some point after I’m out of debt. I worry about buying a used car that turns out to be a money pit. I’d love to get one of those tiny subcompact cars. I could get a new one for like 13-15K, even less if used. The downside is that I doubt they hold their value at all.

    Hope your car troubles work out.

    1. thesingledollar says:

      Unfortunately the freelance check is less impressive than it sounds. It’s really an advance on royalties for a book I worked on and the hourly rate probably works out to about $.50 🙂 However, better than nothing!

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