Student finances isn’t a popular subject unless covering student loans. But it was for me. I was a single mom planning a career in healthcare. The schooling required would demand all of my attention leaving no room for work. As a PA student, I would be on a fixed income; so reducing expenses and increasing my savings was crucial. I knew that most of my money would end up going towards childcare and unexpected emergencies, leaving very little funds for any non-essentials such as a monthly car payment. After carefully reviewing my finances – I decided that I had to get rid of the car!
Let’s backtrack a little…
July of 2016, I purchased my 2015 Infiniti QX60. She was a 6 cylinder, liquid platinum painted beauty … But she had to go. There was no reason for a single parent, full time student and employee to be spending over $800 per month -including the monthly payment, insurance and fuel costs- on a vehicle that was depreciating in value by the second. It took two months to come to my senses and in September 2016, I ditched the car.
To do this required a few quote comparisons and securing a replacement
First I had to locate some prospects for a new vehicle. This had to be a smooth and seamless transition from one mode of transportation to the next. One evening during a small group at church, the topic of cars came up. One of the elders mentioned she was planning to trade in her 2005 Ford Focus Station wagon for some new wheels. Call it coincidence or Divine intervention, either way, everything was falling into place. We spoke for a short while and the next morning, we drove her car to my mechanic for inspection of any needed repairs. Everything was in tip top shape and the price she asked for was more than fair.
And just like that …
My luxury SUV was about to downgraded to a not-so-luxurious station wagon… but who cared? It was in good shape, the parts were cheap, the car was well cared for and would get me to and from school – which would be a 100mi commute per day.
Once the car was secured it was time to hustle up the funds
With a Clean car fax report and no major cosmetic blemishes. I knew that I could get very close to if not more than the original purchase price. After visiting several dealerships, the best offer on the table was a little over $29,000. My car debt was just over $25,000 – so not only would I be paying back every dime of that loan – I had an extra $4,000 to go hog wild with. The transaction took about 3 weeks to complete. Here’s what I did with the money:
• $500 set aside as play money – a girls gotta shop
• $1,000 for the Ford
• $400 for DMV related costs, taxes, repairs, etc.
• Remainder used to pay off other debt – credit cards, iPhone and iPad (Installment plans are the worst – see my rant below).
A BRIEF RANT - We’ve all seen those advertisements - Get the new iPhone today and pay in installments over the next 24 months. Doesn’t sound too bad right? Wrong! That extra $20+ per month, along with a whole bunch of other crap they don’t mention, shows up on your next statement feeling like a gut punch. My once $70 phone bill became nearly $120 every month with the iPhone and iPad installments. Needless to say, the moment I got my hands on some extra cash, It was time to pay those devices in full.
Okay… I’m done
So there it is folks. How I was able to pay off nearly $30,000 of debt in less than a month. From the moment I made the decision, found a new car and sold my platinum beauty was a total of 3 and a half weeks. The Ford was a real trooper, but she only lasted until June 2017 (car accident) I’ll tell you all about that in another post.
