Checking in with an August update! As you can see below, I did really well with my August budget. We went over on home improvement but it was mostly because our fridge’s water filter needed to be replaced and they are so expensive. A and I also put a combined $1900 toward debt making the balance on that specific loan only $4000!
What the August budget does not show is that the power steering went out on my car on Tuesday. Fortunately, power steering is covered under a recall. Unfortunately, according to google, the recall doesn’t permanently fix the problem. It’s more of a band aid. I figure I have three options: stay with my car and hope google is wrong, buy something inexpensive, or go all in on the car I’ve been wanting.
I don’t love the idea of staying with my car. It’s important to me to have something that is reliable since I travel for my job. I also really hate my car. There’s not any one big thing wrong with it (other than the power steering right now) but there are a ton of little things that drive me crazy. And they have all shown up in the last two years. It’s like its just started falling apart.
If I was truly following the Dave Ramsey baby steps, I would buy a junk car and ride it out until I could cash flow a car I really want. I’m not sure that’s realistic because of the travel issue. It is definitely the most fiscally responsible option but I don’t like putting money into a car just to trade it in for something I really want in a year or two. So right now it looks like I am going with option three: buy a new car.
I have been day dreaming about owning a Lexus for several months now. In theory, getting a Lexus was going to be my reward for my next promotion which is approximately eight-ish months away assuming I don’t fail the testing process (fingers crossed). I really like the IS and I test drove one on Friday. I like how it drives but it has the smallest trunk on the planet. Refer back to problem one, travel. My car has to be able to fit a couple of suitcases. The Lexus ES is a larger sedan than the IS and is more comparable in size to my current car which has a lot of cargo space.
When I am not aggressively paying off debt I have about $600 of wiggle room in my budget. Obviously my payment has to come in under that. Assuming a 4% interest rate, I can afford a car that is $22k to $27k making my monthly payment $400-500. This definitely rules out a new Lexus since they start out around $40k. I found a 2016 ES for $27k that I will probably test drive sometime this week. If I can get about $4k for my car that should cover taxes. At this point, I’m really regretting that I didn’t save the mileage reimbursement checks from work because I would have a sizeable down payment if I had. Cliché about hindsight being 20/20 and stuff.
I’m not excited about financing something when I have been trying so hard to become debt free. It’s a tough pill to swallow. However, I think it’s the right thing for me in this situation. There is also a small part of me that is holding on to hope that the new part will fix my car and it will run for 18 more months. I will know more on Tuesday this week. Tune in next week for an update about my car situation!