Personal Debt...Part 1
February 6th 2009 20:37
On January 15, I was involved in an auto accident on a freeway. Lucky everyone was OK and always buckle your seat-belt. The airbags were also lifesavers in that all parties walked away from what would seem like there were casualties involved due to the damaged vehicles. Lucky there is always mandatory insurance in my State, or the lawsuits, if any, would be aimed at you. Hospital bills, too!
The thing is that my car, even though it was 13 years old, was a reliable mode of transportation. I couldn't be without a car, so although I had been debt-free for 5 years, I had to look for a reliable vehicle. Yes, I can become a green-energy user by riding a bike or walking, but my job is 6 miles away and you can't bike in the blizzard!
So I had to get a reliable mode of transportation, meaning I either buy a reliable vehicle or a junker that will break-down and cost me more in the long run. Cut to the chase, I bought a 2006 vehicle for a bit over $10K.
Let me go back in time when I bought my last car that was only a year old...
The car was $9K. I got financed from the dealer. I bought the extended warranty(that can be lifesaver!). When it was all said and done, I paid close to $20K for that car. The percentage rate was at least 19% at the time. I got nothing extra like floor mats, etc.
Back to the present...
I highly recommend that you join and borrow through a credit union. The car came with a lot of extras including mats, automatic starter, alarm, XM, etc. My loan rate is 7.25%, and when the car is paid off it will have cost me a little over $13K.
I am also going to get the extended warranty from the credit union because it was substantially less than the dealer.
Another downside that will cause me more debt is that now my insurance will increase because you are required to purchase full coverage on vehicles that aren't paid for.
Yes, I'm back in substantial debt, but I feel that with a few changes in personal behaviors, I can make it. I'm going to work more overtime at work when it is offered, I'm going to try to cut back on my food bill, etc. Consider this a personal journey that will show if I really can practice what I preach. From time to time, I will keep you updated.
Watch for Personal Debt Pt. 2 in the future.
The thing is that my car, even though it was 13 years old, was a reliable mode of transportation. I couldn't be without a car, so although I had been debt-free for 5 years, I had to look for a reliable vehicle. Yes, I can become a green-energy user by riding a bike or walking, but my job is 6 miles away and you can't bike in the blizzard!
So I had to get a reliable mode of transportation, meaning I either buy a reliable vehicle or a junker that will break-down and cost me more in the long run. Cut to the chase, I bought a 2006 vehicle for a bit over $10K.
Let me go back in time when I bought my last car that was only a year old...
The car was $9K. I got financed from the dealer. I bought the extended warranty(that can be lifesaver!). When it was all said and done, I paid close to $20K for that car. The percentage rate was at least 19% at the time. I got nothing extra like floor mats, etc.
Back to the present...
I highly recommend that you join and borrow through a credit union. The car came with a lot of extras including mats, automatic starter, alarm, XM, etc. My loan rate is 7.25%, and when the car is paid off it will have cost me a little over $13K.
I am also going to get the extended warranty from the credit union because it was substantially less than the dealer.
Another downside that will cause me more debt is that now my insurance will increase because you are required to purchase full coverage on vehicles that aren't paid for.
Yes, I'm back in substantial debt, but I feel that with a few changes in personal behaviors, I can make it. I'm going to work more overtime at work when it is offered, I'm going to try to cut back on my food bill, etc. Consider this a personal journey that will show if I really can practice what I preach. From time to time, I will keep you updated.
Watch for Personal Debt Pt. 2 in the future.
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