Wednesday, 05 September 2012 20:36

Fix It or Sell It?

Written by  Dave Ramsey
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Question: My old car has been having lots of problems lately. Do you have any advice on how to decide when it’s best to just fix an old car or get a newer one instead?

 


Answer: This is a good question! Mathematically, the first thing to look at is the car’s worth if you don’t make repairs. Should you spend $1,000 to increase the value of the vehicle $500? Dumb question, right? At that point, you sell the car as-is and put the $1,000 it would take to fix it toward something newer.
On the other hand, let’s say you’ve got a little hooptie worth $1,000 but by putting $500 into it, you can have it up and running again. Suddenly it’s worth $2,500. That’s money well-spent, because what you’ve done has significantly increased the value.

The other side is that at some point, the hassle factor of an old car can turn it into a money pit. If you can’t get anywhere because the car’s always busted, then you need to find something else for the sake of safety and reliability. If this happens, though, you should still pay cash for a better car. Even if you’re not taking a step up in price or fanciness, it’s still better than taking on a car payment. I’d walk or ride a bike everywhere before I did that!

Question: I’ve been working the Baby Steps and doing a budget most months. But how does someone who is single stay motivated and focused with something like this? It feels sometimes like it would be easier if I had someone holding me accountable.

Answer: The first thing is to make sure you do a written budget each month. Not once in a while, not most months—every single month. If you don’t draw the out-of-bounds markers, there’s no way to know when you’ve stepped over the line, right? A monthly, written budget becomes your self-accountability tool, especially when you’re single.

Still, there’s nothing wrong with introducing a little accountability into your life. You don’t have to be married to be accountable to someone other than yourself. Ask a good friend or maybe even your pastor to have a look at your plan and see what they think. Just make sure this person is someone who knows a little something about money and finances.

Honestly though, I think doing the Baby Steps and following my plan can be easier for single people. Think about it this way: You don’t have to talk someone else into coming along for the ride. You also don’t have to come to an agreement with someone else on everything financial. All you have to do is get serious, look in the mirror, and say, “Quit being stupid with money!” In other words, you just have to do it.

Admittedly, you don’t have the built-in accountability in a singles situation. But on the other hand, you don’t have someone calling you a doofus when you mess up!

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