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February 26, 2009


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I'm with you on most of these. They seem like recommendations for folks who hadn't gotten frugal to begin with.
1. My wife and I bought our house to raise a family, intending to live there till we retire. That's still a ways away, so we're not changing anything at this point. Might start looking for a deal on a vacation/retirement/rental house in a foreclosure-hit area, though.
2. My vehicles are all paid for, too. I've got cash on hand, waiting for the right replacement vehicle soon.
3. We only eat out once or twice a month to begin with, so there's nothing here for us.
4. On the contrary, now that the kids are raised and gone, we're ready to take a vacation somewhere out of the country finally.
5. No designer coffee or other luxuries in the budget to begin with.

I've been thinking about downgrading my luxury car (that I never should have bought in the first place) for a cheaper used car. Then paying the difference towards my loans.

The only problem is, with all the new car deals I don't think I will be sell mine for a price that is worth it. I bought it April 2007 for 35,000 and would like to get 26-27k for a sale. Giving me about a 10k surplus after buying another vehicle.

The problem is the KBB "value" seems way underestimated at around 24,000. I added a lot of extra features onto my vehicle which brough the price up. I know they don't retain their original value, but I don't quite understand how the car can be worth 11,000 less within 20 months. If the KBB value is based on average actual sale data, then I understand why it is low. Several dealers in my area are misrepresenting the options in the same model as mine.

Because of that I don't think its worth it to downgrade and get a cheaper vehicle. Its not worth the hassle and acceptance of all that money lost.

Should I do the right thing and still go through with trying to sell?

Angie - Given the sorry state of the auto industry and the fact that many dealers will no longer have a brand to sell when all the downshifting (pun intended) is complete, it's no secret that cars are losing their values more quickly, particularly if you want to sell to a dealer, vs. doing a private party transaction. It also goes without saying that it really depends on what model car you have; hybrids are holding their value more than Hummers, even with lower gas prices today. Bottom line, it's only a loss if you sell and lock it in, same as real estate or stocks.

I have been window shopping, per se, some altimas, camrys, accords, and the like. Some Hyundai's too.

Tough bullet to bite.. I think my car will last, just not sure if its worth it to bite now.

I apply this post's principles, except for the vacation (I love travelling to far away countries, even though I try to keep the cost under control). So I 'splurge' on travel, FMF 'splurges' on nice property. Sensible frugality is more than just stashing away, it's about prioritizing where your money goes to, right?

I'm paying 65 percent of my income to rent a room in a house with eight people.

As a result, I am unable to save up any money, resulting in my inability to move to a less expensive home.

Being poor is expensive.

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