Positive Thinkings Outside the Box
Me and my wife finally filed Ch7 a week ago. Very much a no assets case, anything we're keeping is exempt. We're now waiting for our 341 meeting, but don't really anticipate any big issues. Pretty sure our ducks are in a row!
I thought I'd post up some of my thoughts, since they're relevant to this forum. Plus, it's a bit of advice / food for thought instead of gloom and panicking
I'm learning to think about things differently... hopefully some of my ramblings will be helpful to someone else.
Within four days of filing, we had no less than FOUR letters come from car dealerships, begging us to come buy a car. One even advertised specifically that they can get us "into a new $34k car BEFORE your 341!" I found that kind of surprising. I wondered, are people really that gullible? Then I recalled a thread here some weeks back, from someone who didn't want a used car, as they 'broke down too much,' 'cost too much to fix,' and they 'didn't want to inherit other people's problems.' Here's my take on it.
New cars will always break your heart, and are bad investments. They drop $5k in value when you leave the lot; the first ding or scratch, and you're either sad, or pay to try and keep it pristine; chances are VERY good you'll be upside down on your loan within five years, end up paying a lot more than it's worth, and will have repair costs on top of that. You have to pay on it every single month, regardless of your finances, or else it's gone. If you get tired of it, the only way to get rid of it is to somehow pay the difference and take a loss on a private sale, or trade it in and have your value gap added to your new car loan... which instantly makes that one upside down... and the cycle continues until you owe $45k on last year's Civic.
So what if you buy a used car? Well, instead of a monthly payment (likely $200+) you'd just have maintenance / repair costs. If you keep the $200/mo. you'd be making in new car payments, after just five months you'd have $1k saved for any needed repairs. If your car can go ten months without breaking down, you've saved $2k. Now the transmission could blow out and you can swap it without blinking. At this rate you could completely replace the vehicle in a few years, or be well on your way to buying a new one outright, minus the interest rates, loans, fees, and monthly deadlines! Plus, if you can't afford your 'payment' for a month or two, there's no dings on your credit. No threat of a repo. No falling into a hole, unable to catch up.
Is it really worth it to drive that flashy '09 instead of an '01? People used to save up to buy things. They'd put money in the bank each paycheck and EARN income off it. Now we push our monthly budget to the max with high-interest loan payments, making huge commitments without saving a dime. As soon as a job is lost, an accident occurs, a payment is missed... we end up in hell. No wonder everyone is so stressed out and on edge. We're all living on borrowed time, just waiting to stumble. This economy is a huge trip-wire for everyone, which is why we're here on this forum. Hopefully it will be a wake-up call, not a bail-out.
Everyone wants a piece of our income now that our debt has been subdued. I think we have a better plan. Firstly, our house. It's a manufactured home worth about $117k two years ago. There's $100k and 18 years left on our loan. Doing the minimum $1k/mo. payments, we'd end up paying over $180k. So instead, we're going to pay $1,500 a month. That will save us about $50,000. If we throw tax returns at it too, we can have our place completely paid off in about eight years. Yes, it's a long term goal. It's not nearly as flashy as an iPhone, a new car, or a 1080p HD tv... but isn't it the intelligent thing to do? I look around at my friends and do envy their nice toys. But in twenty years, they'll still be doing the same thing they are now; working 40+ hours a week to pay down massive accrued debt. Is that where I want to be? Will I look back and think that my 'fun' expenditures were worth staying in that rut?
In eight years I'll be about 41. My goals are to relax, be able to spend most of my time with my family, and semi-retire; paying all my bills working part-time. This may sound impossible, but I'm going to do it by thinking outside the box.
'Real' houses here are $200k - $300k. For that, you get little to no yard. You live in a planned community, and likely have a commute. If we sold our 3 bedroom place for $100k (hopefully it won't drop that much, but I'm trying to be realistic with this economy), we would still need to get a $100k+ loan. That's another decade or two of working, and for what? The best job I can find here now is manual labor, as the labor pool is completely flooded with tech-savvy IT gurus. I don't want to be killing myself at 60, and my wife and son deserves more. So what to do?
I'm reminded of what people used to do in earlier times, before this modern flawed mentality. A person would train with a blacksmith until they were good enough to be on their own. But they didn't open up shop right next door like we seem to try and do. They found a nice place that needed their services and set up their home there. It's simple supply and demand. Nowadays with a 14% unemployment rate, a lot of cities have hundreds of people with your qualifications (or better) seeking work.
Three hours north of us is a smaller town where my wife grew up. For $100k you can get a six bedroom house with land and outbuildings. We could buy it outright (no loans, no interest rates, banks, etc) and only have to pay for utilities, food, and yearly taxes. Everything is in a 2 or 3 mile radius. Here, I'm one of many. There, I'm an IT hero. I've got quadruple the experience and know-how of anyone else. I could run a little shop from my home, or supply cheap services to schools and business in the area. We could live off next to nothing. The recession also hasn't hit the smaller towns nearly as much. Heck, they have a Wal-Mart, if nothing else. I could be a part-time greeter and more than make ends meet, if it came to that.
I know this likely isn't the answer for everyone, but I wanted to share it. You don't have to be caught up in a perpetual monthly rat race. You can escape in less time than you think. What is your lifestyle costing you? In ten years I'm going to be relaxed. Happy. Peaceful. I'll own my car and home outright. No more working ten hour days or overnight. "Getting behind on bills" will mean I forgot to mail the $25 car insurance in, not a $50,000 bankruptcy. My favorite restaurant may be a few hours' drive away, yes, but I consider that worth it. If we're all so willing to sacrifice our health, our futures, our stability, and our common sense for a couple perks, why not do the opposite? And who knows, I may even have time to enjoy cooking instead
-Michael
I thought I'd post up some of my thoughts, since they're relevant to this forum. Plus, it's a bit of advice / food for thought instead of gloom and panicking
I'm learning to think about things differently... hopefully some of my ramblings will be helpful to someone else.Within four days of filing, we had no less than FOUR letters come from car dealerships, begging us to come buy a car. One even advertised specifically that they can get us "into a new $34k car BEFORE your 341!" I found that kind of surprising. I wondered, are people really that gullible? Then I recalled a thread here some weeks back, from someone who didn't want a used car, as they 'broke down too much,' 'cost too much to fix,' and they 'didn't want to inherit other people's problems.' Here's my take on it.
New cars will always break your heart, and are bad investments. They drop $5k in value when you leave the lot; the first ding or scratch, and you're either sad, or pay to try and keep it pristine; chances are VERY good you'll be upside down on your loan within five years, end up paying a lot more than it's worth, and will have repair costs on top of that. You have to pay on it every single month, regardless of your finances, or else it's gone. If you get tired of it, the only way to get rid of it is to somehow pay the difference and take a loss on a private sale, or trade it in and have your value gap added to your new car loan... which instantly makes that one upside down... and the cycle continues until you owe $45k on last year's Civic.
So what if you buy a used car? Well, instead of a monthly payment (likely $200+) you'd just have maintenance / repair costs. If you keep the $200/mo. you'd be making in new car payments, after just five months you'd have $1k saved for any needed repairs. If your car can go ten months without breaking down, you've saved $2k. Now the transmission could blow out and you can swap it without blinking. At this rate you could completely replace the vehicle in a few years, or be well on your way to buying a new one outright, minus the interest rates, loans, fees, and monthly deadlines! Plus, if you can't afford your 'payment' for a month or two, there's no dings on your credit. No threat of a repo. No falling into a hole, unable to catch up.
Is it really worth it to drive that flashy '09 instead of an '01? People used to save up to buy things. They'd put money in the bank each paycheck and EARN income off it. Now we push our monthly budget to the max with high-interest loan payments, making huge commitments without saving a dime. As soon as a job is lost, an accident occurs, a payment is missed... we end up in hell. No wonder everyone is so stressed out and on edge. We're all living on borrowed time, just waiting to stumble. This economy is a huge trip-wire for everyone, which is why we're here on this forum. Hopefully it will be a wake-up call, not a bail-out.
Everyone wants a piece of our income now that our debt has been subdued. I think we have a better plan. Firstly, our house. It's a manufactured home worth about $117k two years ago. There's $100k and 18 years left on our loan. Doing the minimum $1k/mo. payments, we'd end up paying over $180k. So instead, we're going to pay $1,500 a month. That will save us about $50,000. If we throw tax returns at it too, we can have our place completely paid off in about eight years. Yes, it's a long term goal. It's not nearly as flashy as an iPhone, a new car, or a 1080p HD tv... but isn't it the intelligent thing to do? I look around at my friends and do envy their nice toys. But in twenty years, they'll still be doing the same thing they are now; working 40+ hours a week to pay down massive accrued debt. Is that where I want to be? Will I look back and think that my 'fun' expenditures were worth staying in that rut?
In eight years I'll be about 41. My goals are to relax, be able to spend most of my time with my family, and semi-retire; paying all my bills working part-time. This may sound impossible, but I'm going to do it by thinking outside the box.
'Real' houses here are $200k - $300k. For that, you get little to no yard. You live in a planned community, and likely have a commute. If we sold our 3 bedroom place for $100k (hopefully it won't drop that much, but I'm trying to be realistic with this economy), we would still need to get a $100k+ loan. That's another decade or two of working, and for what? The best job I can find here now is manual labor, as the labor pool is completely flooded with tech-savvy IT gurus. I don't want to be killing myself at 60, and my wife and son deserves more. So what to do?
I'm reminded of what people used to do in earlier times, before this modern flawed mentality. A person would train with a blacksmith until they were good enough to be on their own. But they didn't open up shop right next door like we seem to try and do. They found a nice place that needed their services and set up their home there. It's simple supply and demand. Nowadays with a 14% unemployment rate, a lot of cities have hundreds of people with your qualifications (or better) seeking work.
Three hours north of us is a smaller town where my wife grew up. For $100k you can get a six bedroom house with land and outbuildings. We could buy it outright (no loans, no interest rates, banks, etc) and only have to pay for utilities, food, and yearly taxes. Everything is in a 2 or 3 mile radius. Here, I'm one of many. There, I'm an IT hero. I've got quadruple the experience and know-how of anyone else. I could run a little shop from my home, or supply cheap services to schools and business in the area. We could live off next to nothing. The recession also hasn't hit the smaller towns nearly as much. Heck, they have a Wal-Mart, if nothing else. I could be a part-time greeter and more than make ends meet, if it came to that.
I know this likely isn't the answer for everyone, but I wanted to share it. You don't have to be caught up in a perpetual monthly rat race. You can escape in less time than you think. What is your lifestyle costing you? In ten years I'm going to be relaxed. Happy. Peaceful. I'll own my car and home outright. No more working ten hour days or overnight. "Getting behind on bills" will mean I forgot to mail the $25 car insurance in, not a $50,000 bankruptcy. My favorite restaurant may be a few hours' drive away, yes, but I consider that worth it. If we're all so willing to sacrifice our health, our futures, our stability, and our common sense for a couple perks, why not do the opposite? And who knows, I may even have time to enjoy cooking instead
-Michael
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