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A New Twist to Selling the Van – A Bailout Plan

by Debt Destroyer on October 9, 2008

sell-buy-give-vansAnother page has been added to our selling the van story.  You long time readers can skip ahead, but if you want to catch up here is the first part, and here is the second part.

Now for the third installment of “Will They or Won’t They?”

I was having dinner at my parents house a couple of weeks ago and my Mom asked how we were doing financially.  I gave her my pat answer that I always give her,

“Just fine.”

But then I made the mistake of offering a little more.

“But we’ll be in much better shape after we sell the van.”

That set off her maternal alarms:

  • “What’s wrong?”
  • “But I thought you liked your van?”
  • “Is the business not doing good?”

After I calmed her down, I did my best to explain to her what our plan was:

  1. Sell the van ($15,500).
  2. Pay off the $11,000 grand we still owed, which would eliminate the $330 monthly payment.
  3. Buy a $4500 vehicle and save up for a nicer vehicle.

She thought I had lost my mind.

I knew a lot of people wouldn’t like our plan (especially her), so I didn’t really give her protest much thought, until…

Later that night she called me up and asked if we were seriously going to sell our van?  I assured her we were, right after Native American Day (in South Dakota, Columbus Day = Native American Day). She then proceeds to tell me how much I will regret that decision because I’ll end up with a junker that I’ll have to throw money at and this will money saving idea will backfire in my face.

She then made the offer…to pay off our van.

“What’s the catch?” I asked.  She said there wasn’t one.  $5000 would be from my money my Dad left me that I gave her to hold onto.  And the other $6,000 would be from money my Grandma left my Mom to spend however she wanted.

I was a little fishy right away because where was this offer two years ago when we started my wife’s business and needed almost exactly this amount of money.  Plus I could’ve swore I used up all the money my Dad left me for a down payment on our house.  I mentioned this to her, and she said she’d check into it.  Then I said how about she give just my Dad’s money to me so then I’d have enough for a $9500 vehicle after selling the van.  She didn’t like the sound of that.

I knew it was fishy.

Another problem was that I had really wanted to do the responsible thing and sell the vehicle, learn from our mistake, and sacrifice for the next few years until we could afford another used van.  But now a personal bailout plan is offered and I’m rather confused.

I know Frugal Dad recently wrote a post saying that you shouldn’t lend relatives money, but what about the flip-side of that coin? and what if it’s not a loan?

Even though it’s fishy, I’m thinking of taking her up on it.  We don’t really want to sell our van, the whole point was to get rid of the payment, and this would accomplish that.  So Happy Rock Readers I turn to you once again…

What would you do?  Are there any pros & cons that I’m missing?  Have any of you accepted a “bailout” before?  If so, how did it turn out?

I thank you in advance for any responses and please stay tuned for the next episode of “Will They or Won’t They?”

Until next time,

-DD

{ 12 comments… read them below or add one }

The Happy Rock October 9, 2008 at 9:49 am

A couple of points to think about :

1. As you mentioned the behavior change, responsibility, and learning are of the utmost importance. Those changes are what are going to give you success for the rest of your life, so make sure you are not foregoing a large part of that experience. Deciding to sell the van was good growth as a couple, but the hard work is often what cements behavior changes.

2. I do agree that giving and not lending money to family or friends is the only way to go, but you still need to be honest about the strings attached. I have heard stories of money given by parents and although it was a gift a year later when you are out of debt and you go on vacation you get looks or comments. Or maybe your decisions from here on out are judged or feel scrutinized. Only you can judge what that relationship is like.

3. If the $5000 is yours, then it should be yours. A parent doesn’t get to say what you should do with that money at your age. I am not saying the extra $6000 gift wouldn’t be nice, but personally I would probably still try to sell the van, buy a $5000 van and use the rest for other debt. That would have the most impact.

4. I bought a $5000 car 7 years ago and have barely even done just routine maintenance. You just need to have cash, get the right deal on the right model. Cash usually can get you a great deal on a good model. Problems can happen, you have make sure the odds are in your favor.

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Spokane Al October 9, 2008 at 10:00 am

I guess that the main point in my mind is making that financial break from one’s parents. As an adult I preferred not to share the stuff you talked about with my parents because it turns things, once again, into the parent/child relationship. If you have money coming to you, someday it will happen. Why, as an independent married adult, involve your mother in your financial decision making process?

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Milton Griffin October 9, 2008 at 2:10 pm

Stick to your original plan. Your personal freedom is “price-less”, and you make the choice.

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dave October 9, 2008 at 9:11 pm

tempting isn’t it. but your gut feeling is most likely correct. i’ve been through a similar situation as you are going through with your finances. my advice to you is be a leader of your own family, not a kid who relies on his parents despite being in his 30’s. intuitively you know what the money is: it’s your mother’s money, which she is offering you because she loves you and feels concern for you. the funny thing is, she should be less concerned about you now than she probably would have been 6 months ago when she thought everything was going fine. this could be a very empowering decision for you if you do what your heart is already telling you to do. do me a favour. tell her thanks, but no thanks, and stick to your original plan. i guarantee you won’t regret it.

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The First Creditor October 11, 2008 at 7:23 am

I have seen, first hand, the strings attached to this sort of offer, however, I must diverge from the prevailing consensus. If your mother is in a situation to help you, and you feel the relationship can handle it, take the gift. It may be true that learning the hard way will impart a lesson, but must we always learn the hard way? And why must we look at our parents as a different entity? Because we’re considered children if we don’t? Pride. If your goal as a family is to get out of debt, and live a financially responsible life, why can’t your mother do her part to help?

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celticbuffy October 11, 2008 at 10:45 am

O.M.G. I just about fell out of my chair upon reading this post! My advice to you, take it or leave it, is to continue with the plan you’ve set for your family. It sounds so good and tempting but I know a bit more of your history and my gut says that the less you are beholden to anyone else, the better. No matter what, there always seems to be a certain amount of control that you relinquish when you accept a monetary loan or gift from friends and family. I know that part of it is your money from your dad but if you can leave that alone, that might be a good thing. Can you possibly take your $5000 that your mom is holding for you and put it in a high yield savings account to have a nice start to your emergency fund? Taking the offer from your mom is something that I would hold off on unless the situation becomes extremely dire.

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stocks October 14, 2008 at 12:28 pm

Having just found the site, and not knowing too much, I feel silly offering up, but I would say to decline the very gracious offer. “no mom, thank you very much, but by getting rid of the van, we save money on a car payment, and our insurance will be lower in the long run, and will be more financially sound as we are not living beyojnd our means like you taught me to not do” heeh, nice gracious answer to a great offer…
what ever you do, i wish you luck in it.

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plonkee October 15, 2008 at 7:47 am

Who’s decision is it to sell the van? The string attached is that you have to use the money to pay for the van. You can’t use it to pay for something more important. It’s unlikely that your mother is in full posession of the facts of your situation. If the best thing to do is to sell the van, then sell it.

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Mario Spiele October 16, 2008 at 10:05 am

Is it possible to get a nicer car right away after selling the van? I am sure if you are already paying $330 a month for the van, a newer car can’t have payments too much more. Of course, I don’t know your finances, but I would avoid borrowing from your mother, what she is telling you seems a bit tricky since she doesn’t really have all the numbers correct as you said. Sounds like a tough situation, and I hope you find a good resolution . . . you may be learning from your mistakes whichever way you choose! 😉

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The Debt Defier October 17, 2008 at 9:29 pm

A BIG thank you goes to everyone who left a comment.

(I’ve been having some technical glitches which have been stopping me from commenting, but changing log-ins seems to have fixed that.)

Instead of replying to everyone like I have been doing, I just made a whole post:

http://www.thehappyrock.com/2008/10/17/accepting-the-bailout-for-the-van/

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Marcia Release October 19, 2008 at 2:46 pm

Aren’t mum’s brilliant!

Sell your van and let your mum spend this money on herself – my two pence worth anyway

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Lesley Brown October 29, 2008 at 11:16 am

Freedom is priceless!

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