Which comes first . . .?

[JerryZ]

Paying off bills or buying the van?<br /><br />I know it may seem logical to pay off the bills first, but this is a major dilemma for me because I keep going back and forth.<br /><br />I also know that every situation is different and it depends upon one's situation. Well, here's mine:<br /><br />I am a 50-year old single dad of three kids; 2 girls and 1 boy. The boy is 20 and is on his own. The girls are still at home. One is 18 and plans on going on her own in about 2 years and the other is a freshman in high school. The latter one will definitely go to college on an&nbsp;academic&nbsp;scholarship when she graduates from high school. Therefore, I have a minimum of 4 years here. And, I am going to wait until I can retire early at 55 so I can have a definite source of income as I travel.<br /><br />I do, however, have bills that need to be paid off as well. I am paying a little more on them so at the rate I'm going I will have them paid off in about two years. However, two of those bills have a very high interest rate.<br /><br />As for the van, I plan on paying cash for an extended cargo van with money I save. Between the time I buy it and actually retire, I plan on converting it into my campervan and taking it out on some trips.<br /><br />I wish I could buy the van and move into so I can pay off my bills more quickly with not having to pay $800 per month for rent, but I still have two kids at home and for at least 4 years. So, that is out of the question.<br /><br />Thus, my dilemma is: Do I pay off my bills first, or do I save up to buy the van first? There is also the option of both at the same time. My concern, however, is the high interest rate...which is 26% on a little more than $8,000. And, to do the aggressive paying the high interest rate bills off first will take about a year...maybe a month or two less.<br /><br />Any thoughtful advice/insight would be greatly appreciated.

 

[wandering mike]

If you are paying 26% interest rates, I can't think of a better way to save and invest than paying that off that debt. &nbsp;Where will you get a better rate than 26% on your savings? &nbsp;I would also be looking for a better rate too and find a way to reduce that interest expense in some way. &nbsp;Don't know your credit rating and all, so that affects that issue.&nbsp;<br /><br />And why have a van now with a high cost of operation if you are going to be in a sticks and bricks dwelling for 4 years? &nbsp;I would be getting the most economical car that could fit my life and save on gas and insurance costs for those four years. &nbsp;<br /><br />If you can pay off the $8k bill in a year at 26%, it looks like you will be paying about $750 per month on the debt. &nbsp;So if you keep saving that amount of $750 per month for the next three years after that according to the time frames you set out, you will have about $27,000, excluding interest (which is paltry at this point). &nbsp;That doesn't address the further additional savings you will have after you pay off the other bill in the second year.<br /><br />All just IMHO. &nbsp;Then again, I sure know that kids don't stop costing you money sometimes even after they move out of the house. &nbsp;<img src="/images/boards/smilies/smile.gif" alt="" align="absmiddle" border="0" />&nbsp;<br /><br />

 

[VanLifeCrisis]

Yeah i agree with mike. The van would only help if you actually could live in it while paying down the debt, which isn't an option for you.&nbsp; Once the debt is paid off the savings will be faster on the van.

 

[JerryZ]

Yeah, this is my inclination too, and original idea. But, I just want to start building the inside of a van so bad that I don't want to wait. But, I know I have to.<br /><br />Oh yeah, other issues I guess I should have added. I got divorced less than a year ago, and one of the reasons for the divorce was financial. I have no savings because she spent it all and she killed my credit rating, which I am trying to build back up.

 

[wandering mike]

I think I would take up car camping for a few years while I paid down the debt and got finished raising the young'uns. &nbsp;That would develop some of the inquisitive, creative "find a fix" skills this life style seems to value. &nbsp;I know for other reasons, when the my kids were getting that age I took up car camping.

 

[SoulRaven]

Freedom comes first, always... it sd selfish, arogant, and irresponsible but F em" i say, they wil not go without or go hungry... Living life on your terms does not include dept and the matrix means for to keep them alive... F the dept. have them find you once you drop from the normal radar... Do your self a favor and F the matrix, buy for your future... get the van and start your life... As for the kids, 18 and gone i say, you did your part....

 

[yesican]

Hey JerryZ.&nbsp; Welcome to the club...<br />Have you ever heard of Financial Peace University?&nbsp; Dave Ramsey has a great way of getting out of debt.&nbsp; He has a 3 hour radio program weekdays.&nbsp; If you're really wanting to get out of debt, he'd be the man to teach you.&nbsp; I'm in the process of getting out of debt and nearly there.&nbsp; It'll be a great feeling.&nbsp; Wish you the best of luck.<br />Rae

 

[wandering mike]

Soul Raven: &nbsp;Certainly&nbsp;all are entitled to their own opinions as to how to live one's life, but by the same token, the OP seemed to indicate he felt a long term, on-going concern for his children that was not necessarily one that would end with some legally mandated age being the "line in the sand". So, that concern would, for him, seem to be a part of "living life on your own terms" as you put it. &nbsp;Getting "lost" and dropping off the radar are not necessarily objectives for all who wander.<br /><br />The above is just my two cents of course and certainly if your comment reflects the &nbsp;"hike" you want to hike with your life, that is certainly not something for me to comment upon, other than to truly wish you the best of luck and happiness on your journey and hope our paths cross at some point and we can share an adult beverage of choice and reflect on matters then at hand.

 

[stude53]

JerryZ,<br /><br />One thing to try ... contact your creditors, request to talk to a supervisor&nbsp;and ask them to reduce your interest rate, given your inability to pay more. I did, and some, not all, gave me a lower rate for six or 12 months, and if I paid on time, they continued the lower rate for another six months.<br />It's&nbsp;very hard to make a dent in the amount you owe while paying exorbitantly high rates.<br /><br />Bob

 

[Terry]

I think its great you care so much for your children. The one thing I would add to the equation is to never expect anything in return from them and you'll never be disappointed.

 

[ParadiseParrot]

Choosing not to burden the planet with additional bodies is not "selfish" my friend. Just the opposite. But since the man has them he has to do what he has to do. He choose to spend money he didn't have with&nbsp;usurious interest rates now he being held in place by them.Banks are happy.Big Brother is happy.So all is good with the world.

 

[user 2252]

I think you should pay down your debt first, you already have a suitable"position" in life (a place to live, schools, groceries, ect)and as you progress towards that goal, slowly "convert".The end result being able to buy that van with cash, and the rest (get it?) is up to you!<br />I also have decided to live out of my car. I have a son who will be 18 this Nov and I have made preparations for him to finally be on his own. I am on SSDI and my son gets a&nbsp;benefit&nbsp;too. He has for the past year moved into his&nbsp;girlfriend's&nbsp;parents house so he can finish school. By the way, this was his&nbsp;decision. He was tired of living with a 59 year old fart! I have always dreamed of living in "the wild" as I did a lot of&nbsp;hitchhiking&nbsp;back in the 60's and I have now come full circle.<br />The point is, you need to get out from under the "thumb" so you can CHOOSE your path. Good luck and I 'm sorry if I am ramblin in my post. Peace, Love, Beatles.

 

[Ricekila]

O / P -- if its inevitable that my house is lost -- I would rather put my last one or two mortgage payments towards a van - the bank wont give a rats ass if I'm current to the bitter end or not <img src="/images/boards/smilies/rolleyes.gif" alt="" align="absMiddle" border="0" />

 

[Guest]

Hi JerryZ, good to have you with us and thanks for reaching out for info from the group.<br /><br />Some good advice and some not to my way of thinking. But good that folks offer it.<br /><br />I have always thought along the lines of personal responsibility so my take is that if I create debt, it is on me to pay it off....after all I enjoyed whatever it was that caused me to incur it. In other words, I have to live with myself and I have to do what allows me good sleep. Simple. It is up to me.<br /><br />I think a lot like Wandering Mike so will agree with what he says about car camping. Or backpacking, canoeing, bicycle camping...whatever you can do to enjoy your kids that want to participate in some good time in nature.<br /><br />There is a lot you can do to prepare for vandwelling. I find that if I make the effort to be in the present, the future has a way of taking care of itself. Who knows what will happen between now and 4 years from now...??? I certainly don't have any idea. I ride motorcycles which is high risk. I may never make it home let alone 4 years from now. It all has to be done right in the moment, even preparations for the future. As is said, this may be all there is.<br /><br />As far as the kids at home...I have no idea where the idea that we had to toss them out on their own at some age came from but I know that for years I thought that too. I have only recently observed that in many countries and cultures, families stay together. Wow, what a concept...that means that kids have grandparents with them and the elders are taken care of...parents share the burden and joy of childrearing with sisters and brothers, cousins etc.. This is true with nomadic groups even more so...<br /><br />I love it...certainly not what happened or is happening in my family...you can ask my sons about that..LOL but I love the idea and am a little whistful when I see it...<br /><br />Peace and enjoy those kidsters....<br />Bri<br /><br />Edited to add: I have often met folks, usually from other countries but some from the states, who travel with their kids. What an education and something I did before mine were in school. On the Expedition Portal site there are people who build rigs for around the world overlanding who do so with their kids...ubercool although WAY expensive and not for most of us.

 

[Simran]

If you are paying 26% interest rates, I can't think of a better way to save and invest than paying that off that debt. &nbsp;Where will you get a better rate than 26% on your savings.

<br /><br />What Mike says is pure economic logic. <br /><br />Take it from someone who's been there and no longer has any bills to pay. Pay the bills &amp; get the monkey off your back.<br />In the mean time buy a tent and do some tent camping with those kids. Who knows you may spark an interest in one or more of them to start living a life of freedom from the very start.<br /><br />gus

 

[cedric]

Since your credit is blown already you could call the credit card company that is at 26% and ask them to drop it to 12% for 12 months so you can pay it off. If they refuse tell them you will not pay 26% any longer and that you will stop paying and file for bankruptcy. My experience is that most will lower the rate with a stipulation that if you are late even once the rate jumps back up. Then it is on you to get it paid on time and paid off quickly. <br /><br />Another option which is favored by some is to just stop paying and wait for it to go into collection. Usually the credit card company will sell the debt for pennies on the dolar to a large collection agency. They will usually settle with you for 50 cents on the dollar. They generally are into it for 20-30 cents on the dollar.&nbsp; If you plan to be a van dweller hopefully you are not going to be using credit anymore.<br /><br />Of course given your divorce, bankruptcy itself may be an option for you. You can speak to a bankruptcy lawyer and explain your circumstances over the phone for free. My experience is they are professional and will quote a price over the phone given you circumstances. <br /><br />I know all this from experience. I too went through a divorce and was left with mounds of debt. I feel it is my responsibility to pay down the debt as long as I am able. I gave each creditor the option to lower my rate. some did and they are getting paid off/ Some refused and I stopped paying and now have made arrangements with the collection agencies for monthly repayments (at zero interest).<br /><br />Just my experience and thoughts. hope they help to get thinking of your options.<br /><br />cedric

 

[[email protected]]

I agree. My husband does not want to live in a van or anything(neither do i really.) but we are thinking it would be a good way to travel. I really want to travel. But i still have teenagers that live with their dad. I have to support them. But at 18 their dad is not making them move out. You will have to do what is best for you.&nbsp;

 

[WanderingRain]

that's a criminally high rate. Do you owe money to the mob or something?<br />Who lends at that rate? Legitimized loan sharks. Geez.&nbsp;<br />This is exactly the reason why I never bothered with building the stupid credit rating ever since I turned 20.<br />It is criminally insane and people buy this sheiz.<br /><br />Anyway, like the folks on here said... I am sure there's programs out there to help you. I can't offer much advice. I never bothered to begin borrowing. I never owed anyone anything in my entire life. I only owe debts of gratitude to folks who helped me along the way and I am trying to pay that back slowly as I make money.<br /><br />My money circulates with me and with my loved ones. <br />Damn the lenders to hell.<br /><br />My one advice is: If it is a choice between being unable to pay later or stopping now to give yourself your own money, I'll stop paying them now so you can save your own cash for yourself. As another fella in here said... if your credit is blown anyway, why bother?<br />Screw them before they screw you completely.&nbsp;<br /><br />