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Budgeting decision - would you help?


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My Dh and I are avid Dave Ramsey fans. We are working down our debt - really just getting started with this, since he just started working full-time. We have only one car right now, because we gave our (very old) Honda to a couple with three children and no transportation. We will use our tax return to buy him something in the $2000 range.

 

The question is this - Do we sell our Jeep, making about $4000, and also buy me a car for about $2000? We could then use this extra money to pay down debt. We have three children, so packing for trips will be tight. But, on the other hand, we won't be taking any big vacations until we are debt free anyway. The only other "big" travel that we do is to Dh's mom's about 2 hours away, which is do-able with a car.

 

Buying the car will also help with gas prices being so high. But a part of me just wants to keep my big truck!!

 

What do you think? Is this something we should do? Would you do it if in our position? Dh is in ministry, and we really want ot save to buy the house we are currently living in.

 

Thanks all! :)

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Is it a reliable car? And is it all paid for? I don't know WWDRD, but I would be nervous about getting rid of the Jeep if it were reliable and paid for. Not only because, in general, a $2000 car is less reliable than a $4000 car, but because you never know about the car you're getting. A $2000 lemon can get very expensive very fast; a $4000 car that's been well taken care of might be cheaper in the long run. You know your car's repair record--you don't necessarily know what you're getting into with the car you would buy.

 

That's my leaning, anyway. My motto is "The cheapest car is the one you already own. Except when it isn't."

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is just really high in which case I might consider selling the Jeep and purchasing something for about the same amount that gets better gas mileage. I don't know what type of jeep you are referring to, but if it's a Cherokee or something, they really don't have more room than most cars. The used car market is good, and you may find a really good deal on something that has been a one-owner and well taken care of. In fact, with cash in hand, you can probably find something in the $5000 range and get it for your $4000 cash. Money talks!!

 

OTOH, if you've had it a while, and you know it is reliable, that's a huge plus! We sold our Suburban this year and purchased a 6 years newer minivan for the same amount we sold our burb for. Our burb was in GREAT mechanical condition, and my dh was nervous about giving up that reliability, but I just hated filling the tank and it was getting uncomfortable for me to drive. I LOVE my minivan. It needs a few minor details fixed, but is in otherwise GREAT shape. I'm very happy with our decision.

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Oh! Just remembered a rule of thumb from Dave--your paid-for vehicles (all of them) shouldn't ever total more than half your annual income.

 

Link to where you can hear him say the same thing.

 

So, unless you only make $8K a year, a $4K, paid-for Jeep is not an unreasonable thing for you to own.

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Thanks everyone for the perspective!! For those who asked, it is a Cherokee, and no they are not any more roomy than a car, however I can haul/pack more in it. When we moved, I could lay the seats down and pack tons in the back. When we went on vacation last summer, we could take tons of stuff with us that we would not be able to take in a car trunk.

 

I really don't drive far day-to-day, and it does run well, so I think I will present your advice to Dh, and we will probably keep it!!

 

Thanks again!!:D

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