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.