DR - when do u save for a car

**Wendy99** · 08-08-2008, 10:34 AM

I'm following DR, but have only read one of his books - Total Money Make Over. So what I was wondering right now I'm on BS #3. But when does he suggest saving for another car or things like that? I want my EF built up to $10,000 eventually, but that could take us awhile , so I should I build it up a couple more thousand (from $1,000), then save for another "new to us" car/van (ours may not last a lot longer maybe 1-3 years - who really knows anyways). I just wondered where does he fit all that in ... I dont seem to have a lot of spare money to do both at the same time or just grow my EF then use that when I need a newer car ... just looking for suggestions on what you do .. I'm afraid of taking out a loan for one want to avoid that.

**emily_hope** · 08-08-2008, 11:14 AM

I've only read The Total Money Makeover myself. I'm not sure where cars come in to play, but I have seen this video about car payments. He says if you are thinking about buying a car and you are planning to make car payments, save the payments first and then buy a better used car and then continue in this manner and you can eventually get the car you want with no payments. Here's the video:

Drive Free, Retire Rich

**Wendy99** · 08-08-2008, 11:19 AM

unfortunately with dial up it's too slow to d/l and see the video, but thank you!

... I do remember that in his book to save up $4000 buy a car, then save up another $4000, sell the 1st car buy and $8000 car etc ...

**Greebo** · 08-08-2008, 11:41 AM

You could do it one of two ways, really.

1) Save the payments up in a separate fund (either a sep account or on separate on paper)
2) Snowball it

If it's a "sooner or later I want to change cars" fund, do #1. If it's, "this car is going to fall apart on us soon" fund, do #2, IMO.

**Wendy99** · 08-08-2008, 11:47 AM

Originally Posted by Greebo

You could do it one of two ways, really.

1) Save the payments up in a separate fund (either a sep account or on separate on paper)
2) Snowball it

If it's a "sooner or later I want to change cars" fund, do #1. If it's, "this car is going to fall apart on us soon" fund, do #2, IMO.

It's definately a #2

... so if I'm "snowballing" it I treat it like a debt and stop the EF at $1000 until the car is funded correct?

**Greebo** · 08-08-2008, 11:50 AM

Yep - you stay in "scorched earth" mode, putting every available dollar into the "NEED CAR NOW" fund.

**Wendy99** · 08-08-2008, 11:58 AM

Sounds good .. I keep saying to dh we need to have $ ready for that as there are so many signs (in my eyes) thats its getting to it's death

.. think dh is thinking it will last 2 more years, I'm thinking probably 1 more (but of course I'm hoping for longer) .. it's so much less stressful to have the money sitting there ready and waiting when it does happen ... dh has hinted he wants 2 vehicles on the road (ie. when van gets bad buy a 2nd, but continue the 1st on the road until it's dead), but imo him taking the bus & taxi (totalling about $50 a month) is far less expensive than insurance, gas, upkeep etc etc .. although its not as convient ... at least I have a year or so to work on him & he has noticed the financial change here for the best so i think i'll win

**Greebo** · 08-08-2008, 12:27 PM

DR Rule of thumb, from the radio show.

If the cost to fix the car is more than the bluebook value of the car, its time to get rid of the car. Otherwise, fix it.

So - whats wrong with it and what will it take to fix, and whats it worth?

**Wendy99** · 08-08-2008, 12:45 PM

Originally Posted by Greebo

DR Rule of thumb, from the radio show.

If the cost to fix the car is more than the bluebook value of the car, its time to get rid of the car. Otherwise, fix it.

So - whats wrong with it and what will it take to fix, and whats it worth?

... the van is prob worth about $2000. My husband says it's still doing ok and "we will keep patching it for now". He figures we will get another 150,000km out of it (has about 225,000km on it right now). It stutters when it's damp (usually first thing in the morning) you press the gas and it acts like it's trying to go, but pulls back at the same time (my techo talk LOL), dh is pretty handy with most things (general up keep, brakes etc and some minor repairs).. major repairs we have done at the garage as DH has little time and I work out of town and it's our only van so sometimes need it done right away. it doesnt need anything right now - not broken down etc. I just have a sick feeling in my stomach (gut feeling) that something will happen within in the next year or so and we'll be screwed with having nothing ready. I need something as I work about 30min out of town so I dont want to be stuck. I would feel so much better knowing that we had the money in the bank so when it does break down to the point of needing a "new to us" car that we are prepared. Maybe just the financial stress of the past still haunts me and I'm trying to avoid it.

**Greebo** · 08-08-2008, 12:54 PM

Yeah, then I'm thinking you put the EF on hold and put a few thousand in the bank as the new car fund, and then hold onto that money as long as you can, and DON'T use that money to repair the van.

If you had an untouchable $5k in the bank as the "Wendy needs a working car" fund, would your security gland then ease up at the thought of DH trying to keep the van running "for now"?

**Wendy99** · 08-08-2008, 01:06 PM

Originally Posted by Greebo

Yeah, then I'm thinking you put the EF on hold and put a few thousand in the bank as the new car fund, and then hold onto that money as long as you can, and DON'T use that money to repair the van.

If you had an untouchable $5k in the bank as the "Wendy needs a working car" fund, would your security gland then ease up at the thought of DH trying to keep the van running "for now"?

I would feel TOTALLY at ease with $5,000 in the bank for a "new to us" car fund and then DH can try to keep the van running "for now" as long as he wants (without using the $5,000 to fix it). He is reasonable in that he wouldn't spend more than it's worth to fix it so I do give him that credit. But yup I need that security in the bank ready, so that I can sleep at night should something happen.