from Jonni McCoy
Q. I have an older van that really needs to have major repairs, such as brakes and possibly a new/rebuilt engine. We put a new transmission in it before Christmas while I was still working. I am at home now and use the van primarily for carting the kids to the store and to the pool, etc. My husband has the "I want a "new" car urge and keeps talking about using my van for a trade-in. We figure that we could "afford" payments of $200.00 a month but that would be all of our discretionary budget. How do we decide which is the best use of our money? Fix the old or invest in a newer vehicle? MichelleRaytown, MO
There are several questions to consider.
I doubt that you can get a brand new car for your trade in plus $200 payments, so you will probably get another used one. Is that going to be any better than the one you have?
Do you want to have NO discretionary money? Can you or your husband really live without any "extras" for a few years?
Can you and your kids live "bone dry" financially just so you can have a newer car?
The $200 per month comes to $2400 per year. Do you think you would spend more than that on repairs?
These are just a few of the questions that you should ask yourselves before making that decision. I am sure that you have others issues to consider in addition to these.
Jonni McCoy is the author of "Miserly Moms - Living On One Income In A Two Income Economy" and "Frugal Families - Making The Most Of Your Hard Earned Money!"