QUESTION: Eric in Charlotte has a $2,400 transmission repair he needs to make. He can’t get approved for a loan and doesn’t have the money to pay for it. He’s single and making $26,000 a year. Dave offers a couple of ideas.
ANSWER: As you know, we teach people not to borrow money. I’m glad you weren’t approved for that because it would have been a ripoff loan to start with.
Rather than fix this $700 truck, if I was going to spend $2,400, I would just buy a different car with that money. You could sell the $700 truck as it sits, scrape together a little bit of money and use those combined to buy a beater car. Then get yourself a nicer beater in two months and another beater in two more months, working your way up while you get out of debt. Keep working your way up through the cars; it’s what I had to do when I was in that fix.