What Car Are You Driving

Recently I met up with an old friend from high school. He asked me to come over and help him with his continuing debt and budget problems. In fact his problems were that bad that he only had around $10 in his bank account.

He was paying all his bills each week but only just!

From sitting down with him and talking over his money problems it was easy to see that he was in trouble.

However when I walked into his house he had a great big 1999 V8 Commodore sitting in the driveway. He explained that he was still paying off the car. In fact the car was worth less than what was owed on his car loan.

My first piece of advice was that he had to sell the car and buy something cheaper. This would allow him to pay off 70% of the car loan. Plus save money on fuel and insurance. And he would be able to keep $1000 cash as a fall back situation.

Now he didn’t like this piece of advice. He gave me many reasons why he couldn’t give up the car. He seemed to be attached to the car (as some people are).

Sure selling the car was not the answer to his money problems. However it was a big piece of the puzzle. It would have gone a long way to completely getting rid of one creditor. Plus it would have given him some buffer room on his cash situation.

I give my friend credit for asking for help which is generally the first step. However trying to change your life does come with big decisions. This was one of them.

Even before calling me I’m sure he knew that the car was part of the problem. However he needed to be told this fact.

I’m working on him to get rid of the car. Next will be to give up the smokes. But one step at a time.    

Sometimes the answers to your biggest money problems are staring you in the face every day. Or driving you to work!