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Hope’s Debt Update – August, 2019

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While I did pay off my credit card this month…yeah!!! I did take on the responsibility for a car loan. A car that my daughter and I will share. A car that is in fantastic shape, has years and years of warranties and roadside assistance and one that will take care of all our needs for the foreseeable future.

Without further ado…here are my new debt numbers.

Creditor
Balance

(as of 10/14/17)
Interest
Min. Payment
Student Loans$34,3782.88%$306
Honda HRV$21,2003%$0
Credit Card$017.00%$0
Total$55,578$306

While the required minimum payment for the car is $0 until June per the agreement with my uncle. My goal is to have the car paid off in 3 years so I plan to start payments this month.

I think the BAD community misinterpreted my reveal of the car. I am in no way shackling my daughter with this loan. But yes, I do expect her to contribute. There is nothing wrong with that. I do not feel like I need to defend that. Many of her friends are expected to buy their own cars. Some of them help pay house bills. After the volleyball season, she will look for a job. And she will work part time.

My new budget will be published later this week. I guess what I have to decide now is how to prioritize my two debts.


30 Comments

  • Reply Laura |

    What year is the car? $21,200 is a lot for a used car, even an SUV. I thought the loan was interest free?

    • Reply Jen |

      The base price on a NEW HRV is 20,620. She financed as much, if not more, than the price of a new car.

      • Reply csdx |

        So about that amazing deal by the uncle for not a 2019 Honda? Does $21k really sound like a great deal? Admittedly it’s been a minute since I’ve been in the car market.

        Maybe they added in a bunch of extras, Hope does mentions warranties so maybe she bought extended warranties?

  • Reply Angie |

    Wow. You had no business buying that new of a car. The only good thing is you didn’t get dealer financing which surely would have been at a much higher rate (and risk!). Were you prepared for that?

    Our car just bite the dust and we’re looking for a replacement. I’m looking at cars no more than 10,000 as a replacement, 12k as an absolute splurge. And my husband and I are both engineers! We’ve both gone through periods of unemployment and remember the struggle and stress of having to pay car loans on top of that. So learning from that we don’t plan to buy a car nicer than is necessary or more than we can afford. Don’t you remember that stress? I know times are good now, but you more than anyone else should know that it doesn’t last.

    Can you still return the car?

  • Reply Joe |

    Trying to inject a dose of reality without being too critical — Hope, if you look back at your July 15 post on debt from the start of blogging until now, the total debt had gone down by 43K, an impressive number. But given that 31K of that original debt was in the form of a car loan, and that you only fully retired that debt by retiring the car, it was concerning to me and others that you did not seem to understand that fact. That was not as big a problem when you seemed determined (even up until last week) to make do without a car replacement.
    Now, you’ve added 21K of car debt, which makes your total debt reduction over the last 5 years still substantial but nowhere near as dramatic.
    3% interest on 21K is $600+ in the first year; you’ve had weeks of blog posts in the past dedicated to saving similar amounts through very extreme measures! Now all just tossed aside for the sake of…?

    Maybe not everyone would agree, but this is where a lot of the exasperation comes from!

  • Reply Jennifer |

    If your uncle is so great at finding car deals, why couldn’t he find you something more realistic for you? You didn’t need a car a few weeks. Why do you now need something as extravagant and reliable with a price tag of $21,000!?!?!?!
    Again I drive a 2003 Toyota Matrix. We bought it 4 years ago for 6,000. We have put some work into but nothing horrendous
    My six children share a 2005 matrix bought for 2,000 a couple years ago. We have put 1,500 into the car and it runs like a charm.
    We have been employed without interruption for 30 years. Finally after raising six kids, all through college, house has will be paid for in 5 years, And a very healthy retirement fund….my husband bought his dream car which cost used $30,000. It took a lifetime for us to feel like we were ready to take on that car note. Our income is over $100,000 with no defendants How do you sleep?

  • Reply Kay |

    $21,200 at 3% interest paid off in 3 years is $616.52 a month. Even I can’t afford a car payment like that and I’m well off. Good luck!

  • Reply Jessica |

    Wow. That’s enough for a downpayment on a house. Good work, way to dig yourself deeper

    • Reply Cwaltz |

      *Sigh* What will you actually be paying monthly on this car? I sure hope that it is not above $400 since you struggled with your payment last go around. I’m afraid to ask what your insurance is going to look like too particularly since you have not added the under 18 driver yet. I hope you at least considered that when you priced out this vehicle.

      As far as prioritizing goes I think you have already made it clear you are prioritizing the car since your “plan” is to pay it off in three years. I also suspect this plan is not super realistic considering you are looking at covering the cost of dual enrollment program and private schooling to the tune of several hundred per month. I’m trying to imagine a $3850 per month budget with little to cut balancing $617 a month for car and $300 a month for next year’s school tuition and activities even with kid contributions. *shakes head* I’m going to guess you have increased the budget and the need to keep contracts.

  • Reply Cheryl |

    Either you are making way more money than you have in the past, someone is helping you alot or you are not telling us the truth. Not long ago you were on food stamps and Medicaid and now no problem. Doesn’t make sense.

    • Reply Cynthia |

      Yes, and even within the past few weeks, you have needed a relative’s assistance to pay for Princess’s school. If I remember your budget posts correctly Hope, you have not showed us an exact income figure. Perhaps it would be helpful to your readers for you to show us your monthly income totals so far this year.

    • Reply Angie |

      She received a gift for half of the tuition. And an Uncle bought the car for her and is delaying payments until June 2020. I’m guessing Hope used her car savings to pay off the credit card debt and other half of the tuition. But she didn’t say that, so it seems like she magically has a ton of extra cash.

      Either way, Hope’s accounting has never made linear sense because she has a big life change every 3 months or so (moves, homeschool, public school, dropped clients, medical emergencies, car accidents, kids in/out of living at home). There are also windfalls, surprises, and switching directions on a whim without a lot of reasoning explained on the blog.

      I honestly don’t think she is lying about income or spending but there are just too many changes between updates that it is impossible to try to match debts, budgets, and whatever else is going on to get an entire picture. I also think maybe she just isn’t the best at written explanations, including her reasoning, and so as readers looking for a clear answer we get frustrated.

  • Reply csdx |

    Well if her intent to pay it off in 3 years holds true, then 21k/36 months, then $580 per month (not including interest). Though a standard amortization schedule of 5 years puts the payment at $377.

  • Reply csdx |

    This kind of thinking is exactly how people get trapped in the consumer debt cycle of endless payments and never quite making it. Between this and one of the older writers mentioning how they had fallen back into debt, it’s a sober reminder to the readers just how easy it is to fall into bad habits (rather than BAD habits).

  • Reply Katie |

    I fail to understand why you couldn’t have found a car for in the $10K range. As someone mentioned earlier, it was a very short time ago that you needed Medicaid and food assistance. I also remember the period of living in a camper-type dwelling. Sigh. What is your insurance payment going to be? You seem determined to self-sabotage.

  • Reply Deb |

    I was wondering how you were going to make the payments on the new to you vehicle when you were very concerned about the 750 dollars that you needed for your daughter’s schooling in addition to the potential fees that you may of been paying for volleyball. I wonder if you are going to end up using the vehicle and writing it off as a “business expense” and have the costs come out of that?

    • Reply Jen |

      That would truly be some impressive mental gymnastics as her business is a web-based one.

        • Reply Jen |

          She has, I think it was her cell phone? Which is a legitimate business expense, even for a web-based business. A car? Less so.

          • Drmaddog |

            Yes. On her first post about this bad solution a couple of pages back I replied to someone else about hope never including health insurance on her budget. I said I wondered if she was still on Medicaid or someone else was paying. Hope said she pays health care through her business.

          • Mistio |

            she could be part of a freelancers union or professional association where she can get health insurance at a discount and write it off under her business

          • Hope |

            Yes, I really can’t write off my car as a business expense. I occasionally track mileage when I meet with a client, but that is not a common thing.

  • Reply Misti) |

    This quote “. Many of her friends are expected to buy their own cars. ” yes, but how many are buying $20k cars? Very few.

  • Reply Cheryl |

    She did mention that her healthcare is paid through her business. I have no idea how that works.

  • Reply Jay |

    I think the biggest thing is that Hope never really posts questions about whether she should do something or not. She details any debt payoffs and then BOOM there is a new computer payment, car, or credit card debt. If you look over the past history since beginning, not much debt has been paid off. Some was gone temporarily when the car payment was gone, but then it came back. Some debts were paid off but student loans increased. Hope is doing the best she can living her life, but to say that she is “blogging away debt” just isn’t true. I think they should get some new people and just have Hope check in occasionally like Beks for an update. I guess the question is “Is this a blog about paying off debt or not?” If its just a life update blog thats ok I guess but it should be renamed.

    • Reply Lucy |

      Jay, you are spot on with your comment! It blows my mind how Hope could even think taking on a $21K car loan was a good idea. How is that getting out of debt?

      I’d love to read blogs about others who are actually battling their debt…not adding to it. I currently follow Rhitter over at PlanetDebtFree.blogspot.com. She is the real deal! If anyone has any other suggestions, please share!

So, what do you think ?