Much has happened since my last post, some good, some bad, but overall I think we have reason to celebrate.
On December, 4th our car broke down again. Of course, we had just poured $2500 into the car back in September, so to have it break again so soon was disheartening. We basically had three weeks to get it fixed before Christmas and I had to be back at work. After several attempts to fix it ourselves, we found that we still couldn't get it running, and if we took it to a shop it would take several days before we got it back. Plus, we hadn't had the cash in hand to take it to a shop previously anyways. We were out of time, and since my job is finally picking up again, I knew I needed a reliable car to get me to work. We made the decision to buy a new car.
Up until now, I have been vehemently against buying a new car because I didn't want to add any payments to our budget, and I definitely did not want to see our insurance go up. However, after getting a few quotes on insurance, pricing out cars and doing a lot of research, we managed to find something that would not put us too far off budget. I worked strictly on what our maximum payment could be each month, and arranged everything else around that number. So, in the end we took on a fairly large new debt that we will be making payments on for the next 5 years.
On the other hand, when I took this job I planned on only making $4-600/month. Instead, I have been consistently making twice that amount. I took this job with the intention of applying my entire income to paying off our student loans. So, being that I am making roughly $1000-1200/month (except for the down time in December), I am able to make the car payment and make up the difference in insurance, and still apply the same amount to our student loans. Naturally, I would have loved to use the entire thing for debt instead of only half, but the point is that I even with this purchase, my original plan has not been affected. Plus, I am moving up in my company again starting next week, so I may still be able to apply even more to the student loans than I had planned for. The downside is that we will have to wait a minimum of six months before applying for the mortgage on the house, but as long as we are paying rent on time my mother doesn't seem too bothered by when we decide to actually buy the house from her.
I will also note that our Explorer is getting very close to 200k miles, and it is starting to show it's age. We have been a single car family for 5 years now, and it has had its ups and downs. After checking the price of insurance with and without the Explorer on there, it turns out that the Explorer will only change the insurance rate by $24/month, so we have decided to keep it. There are no payments on the Explorer, and it will be nice to have a backup vehicle, or just a second vehicle for Jason on his days off since I am never home on those days. However, the Explorer still isn't running, so we will eventually have to take it to a shop to get it going again, but at least now the pressure is off, and we have some time to get it done.
Now for the biggest news of all!!! I have known for several years that we owed Jason's parents quite a large sum of money. Most of this was accrued while Jason was in school the first time, before we started dating. However, we also owed them a little bit from Jason's court fees and for helping us buy the Explorer in the first place. The total amount of that debt was just over $16000. We had arranged to make payments to them for $300 a month, for the next few years to get it paid down, and those payments were scheduled to start January 1st of 2013. (This is partially why I had such a set budget for buying the car, because I knew the credit report would not show this debt and the payments we are making on it, and I didn't want to get pushed into something more expensive.)
At any rate, after all of the Christmas festivities were over, Jason's dad informed us that they went through all of the debt we owed and forgave anything that was a result of Jason going to school, and called it an investment in his future. The end result is that we now owe roughly $11000 less in debt all in one big act of kindness. So, we are on a new payment plan with them, and the first payment has been made. We are facing a debt of only $5250 now instead of $16000. This pushes our debt payoff date forward substantially!!!!
I have been reading all about the huge parties that people are throwing to celebrate being debt free after years of making payments. I think we are going to have to plan for something similar when we are through with this all because I am ready to celebrate!!!
No comments:
Post a Comment