Dear Dave,
My wife and I have just started getting on track with our money. We have $2,000 in savings, and the only debt we have is our house and two cars. I work in the oil and gas industry and make about $180,000 a year, but things are pretty volatile right now. We’re upside down on both vehicles, and we owe $39,000 on one and about $48,000 on the other. Under the circumstances, should we go ahead and build a fully funded emergency fund or work on paying off the cars?
— Kendall
Dear Kendall,
Are you kidding me? Sell the cars.
You need to go to Kelley Blue Book’s website right now and find out what your cars are really worth. Then, put them on the market as a private sale. You’ll get thousands more selling them that way than you will at a dealership. You’ll have to talk to a local credit union or bank for a small loan to cover the difference, plus a little bit more so you guys can get a couple of little beaters to drive for a while.
You’ve got close to $100,000 in car debt hanging over your heads. That’s a disaster. I want you to take a moment and think about how things would be without these stinking car payments. Your lives would change completely.
Hopefully, you’ll be able to keep your job. But this car debt is the scariest thing I’ve heard in a long time, even with your great income. Get rid of those things now.
— Dave
