Debt relief

Curious, how much more do you have to go on the truck?

Sound advice especially the known quantity, I just had this conversation the other day. My college car was a 1988 Chevy Celebrity I paid $200 for (was worth about $1500) and one year it had a lot of repairs, all but one was routine stuff. A classmate told me to get a new vehicle. I replied if I was buying brand new perhaps that's another story, but I'd be getting the same basic age of vehicle I currently had and I know what all has been done on mine. That other vehicle could need all that stuff in 3 months or less.

 

Dave Ramsey would say sell the truck, drive a beater. Dave Ramsey's also out of touch on car prices though.

But I think you need to look at your financials beyond just this scope. Housing, food eating habits/spending habits. If you sell the truck, drive a beater, maintain *possibly* bad habits that got you into your situation, you're likely to just get back to where you are.

reddit's personal finance subpage may be helpful for you as well.

Info is too limited to give meaningful advice

 

If you can't be trusted with your own money, go to Dave Ramsey. If you're just trying to make a few changes and tweak your lifestyle of luxury that isn't sustainable to a lifestyle of being contempt and comfortable, consider not having a truck at all. Obviously we know 1/1,000,000th of your circumstances, but it sounds like you don't need a truck, and would prefer to use that money elsewhere. I'll probably go against the grain and say either don't have a truck at all, or keep the 3rd gen over the 2nd. With today's pricing, the difference in price between a used 2nd gen and 3rd gen aren't really all that different.

 

they told you to keep the tacoma tho right

 

Much truth re the habits part. My sister got in 12K of credit card debt before she was 21 years old. She had a few times been motivated and started chipping down the balances but kept right on going out to dinner, shopping, whatever. She got a consolidation loan (not one of the fee-laden traps, this really did help her a ton) and got out of it eventually but never really altered the root causes and lost her house in her 30s.

 

RIP Chris Farley



edit: You could market and sell that soap. Make some money...

 

Dave Ramsey site shows resources they trust (ramseysolutions.com) Find a local resource you can talk confidentially with and give them details you do not want to (and should not want to) share in this publicly accessible forum.

His books are in the library as well, so no need to buy them.

To remove debt you must accept change in habits, just like losing 150 lbs in weight is a shift in lifestyle. But stop listening to the voices (even in your head) that say "never gonna work".

Good luck.

 

This is the right answer.

I went through the Dave Ramsey courses 10+ years ago at the insistence of my then-girlfriend.

This was 2009, as the housing market was beginning to tank. I was doing home theaters, for a company 60 miles away. My car at the time had a broken heater core, leaked trans fluid due to repeated bad engine mounts, and was a convertible with bad window seals.

As the market tanked, it took my job with it. The boss tried keeping us around for the eventual market upswing again. But I would end up driving 120mi a day to work 2 hours cleaning up the shop... stupidly, I tried doing this for 4 months.

Due to the obvious, I ended up with no money in my pocket, no job, and $1800 in credit card debt in mostly gas to go to that job. That was with a girlfriend that wanted to go out every weekend, and then complain I had no money to go out...

That was the stage I took Dave Ramsey's class for.

The reality is that his program is not for people down on their luck in a recession like I was, it's for people that have compulsive spending or "keeping up with the Jones" problems.

Now I can't say where the OP falls within that spectrum, but one of the things I already said, but I did learn from Ramsey was setting aside money for the "stupid spending" as I called it.

A lot of people looking to get out of debt will make the mistake of budgeting strictly only to correct their debt, and forget about their morning coffee stop, weekly groceries, and how they go out with friends every other weekend to catch up. They don't change their routines, spend everything on paying the debt, only to end up further in debt, with no clue how they got there.

Ramsey's class reinforced the idea of budgeting for safely paying off debt, whole also creating a safety catch of at least 3 months income, and physically setting aside some cash for personal enjoyment(everyone's different, i do this by taking $100 cash out for frivolous expenses, and pay all my bills online/via check, and physically set my debit card deeper in my wallet to force me to think really hard as I go to use it for non-necessary purchases), because absolutely no one is robotic enough to not blow a few dollars on fun living every once in a while.

But there's also plenty I don't agree with Ramsey on. Driving nothing but old used cars, I absolutely don't agree with. My experience is that old used cars require lots of additional maintenance, and also have more surprise breakdowns, which can effect job stability, which easily effects the level of debt one is under.

As soon as I could afford a new cars down payment, I got one. The financing helped me to later secure a good rate on my mortgage, and having reliable transportation to work to make back the money has proven to work everything out in the end. The times I've had older cars, I usually end up spending $8-15k in repairs regardless of the purchase price anyways, most often due to the previous owners neglect(because they intended to sell it soon anyways).

Getting out of debt is a great goal. But keeping out of debt should be the larger goal, and is part of the ethos that Ramsey tries to instill in people that otherwise have perpetual debt problems for various reasons.

His series is good, just don't follow it to the letter, as it's not great one-size-fits-all advice like he makes it seem

 

Lot of wisdom. I really liked the part you mentioned about it being a rounded thing, and while not one size fits all there's some pieces at least that most anyone can get.
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I did the old car thing for a long time, being younger I couldn't afford something new. I've long believed in the Click and Clack Tappet theory that you buy something new and keep it at least 10 years. I slightly modified that, bought my Tacoma 3 years old with under 7K miles 11 years ago. Long said if I ever have to have a payment I will keep it at least double the time that the loan is.

I didn't rush to pay mine off b/c it was $201 at 60 months, 0.9 percent. My wife's 2014 Rav4 we got in 2019 had 16K miles..had to take a 5 year but paid a little more each time to get it to 4.

 

Dave Ramsey and his guidance is awesome for people who are new to finances, digging out of a financial hole, or simply need a strong/strict regimen to follow.

Now, I've got degrees in Finance and Accounting, but I'll admit when it comes to living within means and financially planning for a future, I've learned more from my mother and wife than from my college professors. My mother pinched pennies to make ends meet on my dad's logging/mill income, and my wife has taught me how to take advantage of credit card points, ESPP programs, Roth IRAs and 401ks. There simply isn't a one-size fits all financial plan. Some people can't handle debt, but some folks can use it their advantage, and that's fine whichever works for them.

But finally back to the mortgage without credit. Yes, you can get them, but I've never heard of a manually underwritten loan having a lower mortgage rate than a top tier credit score loan. It also requires many more hoops to jump through, with all the long work/pay and rent history required. Using a credit card that is 0% if you pay it off monthly will give you credit, and can even gain you some points/cash back.

oh... and debt always being negative: If you can buy a car in cash for $40,000, OR put that $40,000 into a 5% CD and buy the car for 0 down and 3.5% interest, which is the better financial decision? Not saying these are real/realistic numbers today, just putting out a thought experiment.

 

Same..my folks were very thrifty. We lived in a new house on a dead end stret in a nice area and went to private school. Otherwise, they never spent on things they didn't need and even then spent as little as possible. No new cars, name brand clothes, etc. We didn't have cable TV or a VCR until I bought a VCR.

My truck was a debt as I mentioned earlier but at 0.9 and $201 a month I wasn't in a rush to pay it off versus power paying on my mortgage of course.