The "Get Out Of Your Car!" Fund

Monday, April 28, 2014

Spring Break Damage

April 23, 2014

So, I budgeted for the spring break trip, and now I have to do a review of my spring break expenses.

I didn’t have a realistic goal of how much a rental car would cost. I aimed for $20 a day, and got the car for that amount, but that doesn’t account for taxes and fees so it looked like I went over when actually I got a really good deal.

While I budgeted well for getting nieces and nephews college gear, I didn’t plan (in writing) for getting parents or my sister – although that was always in the back of my mind somewhere. When we went into the store I gave everyone a $25 limit and everyone stuck within the limit. So, the overall expense seemed to be twice what I planned for even though everyone stayed within limits.

I was under the amount I budgeted for gas and the hotel. I went over the food budget. I chose to cook while I visited – which was a smart move. However, we should’ve eaten before going to that baseball game and packed snacks before going to College Day at my alma mater. That could’ve saved me $30 at least.

Overall I was happy with my money management. I’m especially proud that I even kept tabs of spending at all. I don’t recall ever doing that for a trip before.

Prepared for Car Repairs

April 23, 2014

I got the car brakes repaired. It felt good to know that I saved for that back in December (remember when I added an extra $1000 to the EF because I needed to take extra measures to protect my car-home).  

Because of the EF, I can afford to fix the car and still have $1000 in the EF for other emergencies. That' good, too, because another emergency popped up. 

Every year I get a tax refund and I pay the tax preparer out of the refund. Today, I sat down with the tax man for 2.5 hours (the last meeting out of several this past 12 months). When we were done revising or completing taxes for the past 3 years, I owed taxes for last year. Then I had to pay tax prep fees out of pocket because I wasn't eligible for automatic deposit on the previous years' refunds. 

That means I get no refund money right away, but the tax man and the IRS have to be paid TODAY. 

That was my emergency, and I was prepared. 

Before getting the brakes repaired, I rolled around the idea of getting a used car and getting rid of the Honda, but now I think I’ll keep the Honda another year. I’ll add my tax refund to the sinking fund so I can pay cash for this next car. I really do not want more debt. 

Here is my "car philosophy": Buy a car (new or used) and keep it for 10 years.  Keep making car payments all my life and only pay cash for cars. $300/mo for 5 years = $18,000 before interest and trade-in.  $400/mo for 5 years = $24,000

Michelle Singletary suggests fixing up your old car, making it safe and decent, then giving it to family members who need a car. I would give mine to Aunt and Uncle Theo. While I was on spring break, he patched up the dent in my car and sealed it with gray duct tape (matching the gray paint on my Honda). I didn’t ask him to. He did it while I was gone on spring break. It’s not a bad job, and now the items in my trunk won't get wet when it rains. He has put a lot into helping me keep that car running, so I would definitely give it to him. The only question is, Would he appreciate it or be turned off that I'm giving him a car that's close to rundown.

Friday, April 18, 2014

Credit Card Debt Is Gone!

I just paid off the last credit card today!
$6500 in credit card debt paid off in 8 months.

I also started a sinking fund for a new car. I will make car payments into a savings fund until I have enough to pay cash for a decent pre-owned vehicle (plan B: make a sizable down payment on a car and pay it off as quickly as possible).

I did a review of how much I changed financially in the past 6 months:

1. no savings
2. was trying to pay debts first, even at the expense of eating
3. seldom paid cash
4. was not able to give to help others
5. made minimum payments (and sometimes I couldn't even do that)
6. was not walking in Financial Peace

1. Have a little more than one month emergency savings
2. I eat before paying debts (Dave Ramseys' Four Walls)
3. I use cash for most purchases
4. I have given 4 times in the past month to help others (broken car, homeless person, child with cancer, friend developed a gospel album and needed help promoting it)
5. I make above the minimum payments
6. I'm not walking in peace yet, but I am out of the hole (big time!) and crawling.