Should soldier sell truck or continue payments while in basic training?

Dear Dave,

Two weeks from now I will be going to the military for basic training. After that I will be deployed and will be stationed in Afghanistan. I have a truck that I’m paying $350 per month on. I won’t be able to drive it for about ten months. Should I sell this truck or continue making the payments so I can keep it?


Oklahoma City, Okla.

Dear Lee,

First of all, God bless you for serving our country. We appreciate it.

Now let’s take a look at this situation. You’ve got a bunch of debt on this truck. If you keep it and head off to basic training, you’ll be paying $3,500 for the truck to sit in your garage for ten months. On top of that, it would be going further down in value while you’re not even getting to enjoy driving it. And even further on top of that, you would have to pay a ridiculous shipping fee to get it over to Europe after basic training. If you sell the car now, you could save the payments and use that money to purchase a good used car when you are ready to actually drive it.

Cars that just sit around with nobody driving them are a little pointless – especially when you’re broke! The best part about the second option is that you would be getting rid of the headache of having a car payment.

Get rid of the car, Lee. Go serve our country, save up some money and buy a car with cash. That’s the smartest way to drive – without a car payment.

Why pay off smallest debts first?

Dear Dave,

I am 26 years old and I have about $23,000 in debt. I am mad at the debt and want to get intense about paying it off. I was wondering about the order in which I should pay it off. Why should I start with the smallest debt instead of the highest interest rate?


Scottsdale, Ariz.

Dear Steve,

This is a great question. I would bet that you are a math guy. You like working with numbers. In this case, the math seems to lean more toward paying off the highest interest debts first.

One thing I have learned is that personal finance is only 20 percent head knowledge and 80 percent behavior. Pay off the smallest debts first in order to get some quick wins emotionally. It is the same concept as if you were on a diet and you lose weight in the very first week. Now you are motivated to stay on the diet. If you don’t lose any weight, it’s back to the bear claws and milkshakes.

It’s the same thing here. If you pay off the first small debt in a week, you mark it off the list. Scratch one! Then you knock off another and another. You get emotionally fired up to knock out all of the debt. And if you are using the debt snowball, you are adding more and more money to each debt, and you are debt free before you know it.

It is all about your attitude and how much you really want to get out of the chains of this debt. Go for it!



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