Free Family Finance

Dave Ramsey always talks about the dangers of doing business with family. He always cautions people to treat financial matters with family just like financial matters with a stranger. He says that if you don’t something bad will happen. He talks about how it will make Thanksgiving dinner taste different. It always seemed a bit extreme.

It doesn’t seem so extreme anymore.

A few months ago, my wife and I needed to purchase a car. I did incredible amounts of research and made up my mind. I wanted a 2002-2005 BMW 3 Series. This body style had excellent reviews. I often saw them on the road (a good sign for an older car). BMW’s last for forever, I would enjoy driving it, and they are moderately priced. I had made up my mind and the hunt was on.

While hunting, I mentioned my target to a few members of my immediate family. As luck would have it, they had a ’02 3 Series that fit the bill. After a day of deliberation, they offered to sell it to me. They had intended on upgrading cars next year, but since they had a potential buyer (me), they offered to sell me the car. In the grand scheme of things, it was a Win-Win deal. They would be able to sell their car for more than ‘trade-in value’ and I would be able to purchase it at less than ‘retail value’. We decided on a value – the Kelley Blue Book private party value. They thought the car was in ‘excellent’ condition. I didn’t agree, but the price difference wasn’t significant, so along we went. They deal was done.

As my wife drove me to pick up the car, she asked, “Are you SO excited about finally having a car?” My pessimistic realistic response, “If this was anyone other than my Mom, I would have a mechanic look over the car. But I’m sure if there are any problems, it will be okay.”

[insert foreshadowing]

I drove the car for 6 weeks before it died. Unfortunately, it wasn’t a quick death. It was a slow, expensive death. I took the car in for an oil change, the first maintenance performed since the car had changed hands. A little oil leak led to replacing a gasket. The gasket replacement uncovered an engine full of sludge. The service adviser called with the news, “We think we can save your car.” – not the news you expect from a routine oil change. The sludge led to hours of removal. The removal process loosened chunks of sludge that would later destroy the engine. After 2 months of chasing the carrot on a string (a fixed car), we sold the car for salvage value. It needed a new engine and a new engine would cost more than the car’s value. The death blow. I have always given my cars nicknames and I didn’t even have this car long enough to give it a nickname. So sad.

They say hindsight is 20/20. After the first signs of trouble with my new car (still no nickname), I requested and researched the maintenance records for the car. The oil had not been changed from mile 30,000 to mile 60,000. That’s 30k miles without an oil change. Unanimously selected by every mechanic I spoke with as the cause of the engine sludge. My folks took the ‘buyer beware’ stance. They offered to half the loses with me, but the other half of this financial land mine fell upon me. After 6 weeks and 2,300 miles, we lost $5,000 on a car that we purchased for $7,500. That sucks.

I should have known better. I really should have. Dave Ramsey warned me. I should have listened. Heck, I am the author of a moderately successful personal finance blog. I should have practiced what I preach.

Now the car has a nickname. I call it ‘The Bottle Rocket’. It’s glory was short-lived and underwhelming. It then went up in flames.

Monday, we winterized our homes. I’m sure we have completed all 7 steps by now. So we are moving forward. Today we will winterize our cars. Emergency car repairs can be terrible and expensive. No one wants the front-wheel-drive slay breaking down on the way to grandma’s house. So to prevent these uncontrollable costs, it is important to be proactive. Don’t wait until it is too late.

There are 4 key items to focus on when winterizing our cars:

1. Tires & Tire Pressure: I thought we would start with the easy ones. If you have tired tires, you should definitely consider replacing them before the winter show & ice storms hit. We are driving, not sledding. Traction is key. Additionally, it is important to check your tire pressure. As the seasons and temperatures change, so will your tire pressure. Proper tire pressure has a significant effect on your gas mileage and the length of your tire life.
2. Brakes: Your brakes are also worth checking. If you are a religious record keeper, it might be as easy as checking your paperwork. If you are not as organized, that is ok too. Brakes are good about telling you when they need to be changed (i.e. grinding, squeaking, or violent shaking). It is normally pretty easy to tell. If you still have your questions, a trusted mechanic can quickly check them for you.
3. Winter Fluids: There are two important fluids to check when the temperature drops: washer fluid & anti freeze. First, windshield washer fluid. There is a winter washer fluid that has a chemical additive that keeps it from freezing. This is a must if you live in colder climates. Otherwise the fluid will freeze and the reservoir will bust like a coke in the freezer. Second, anti freeze. Your cars radiator keeps your engine cool. There is liquid that runs through the radiator that aids in the cooling process. In the winter, you need to mix anti freeze with that liquid, to keep it from freezing. This is also very important. Otherwise you radiator will freeze and bust – and that could be expensive. Both of these fluids are available at your local auto parts store. If you go at a slow time, you can probably get an employee of the auto parts store to assist you in topping off your fluids.
4. The Necessities: Just in case everything goes to pot, you  may want to keep a survival pack in your car. Buy keeping a bag filled with blankets, foot, bottled water, and any other necessities, you can keep Murphy out of your life and out of your garage.

This holiday season, avoid a Christmas disaster by spending a few bucks winterizing your car. You will be glad you did.

Saturday night, NBA Rookie Brandon Jennings, scored 55 points against the Warriors – breaking several records in the process.

But this isn’t a sports blog, so who cares?!

Although Jennings showed a lot of maturity while he sliced & diced Golden State’s defense, you could argue that he shows even more maturity off of the court.

A few weeks ago former Celtic Star, Antoine Walker, made news by being broke. He had burned through over 114 million dollars. Unfortunately for Mr. Walker (and his creditors), he had only earned 110 million.

“Walker, 33, has always been known as a big spender. He regularly took limos everywhere, would buys suits for each day of the playoffs (so he wasn’t caught wearing the same one twice) and was said to be supporting 70 friends and relatives, the report said.”

What does this have to do with Brandon Jennings? In a league where 60% of players file for bankruptcy within 5 years of leaving the hardwood, Brandon Jennings won’t be one of them. He is seeing to it.

So far Jennings’s decision-making has impressed his coaches. He moved into a condo less than a mile from the Bucks’ training center in St. Francis, Wis., far from downtown Milwaukee and its beckoning nightlife.

There is an Italian-made Ferrari in the players’ parking lot, but it does not belong to Jennings. It is guard Michael Redd’s car. Jennings opted for a Ford Edge, with its sticker price of $26,000. “I want to save my money,” he explained.

Jennings appears to be well positioned to succeed.

Professional sports need a few more Brandon Jennings. I really hope this guy succeeds – and remains fiscally responsible along the way.

via Jennings, an N.B.A. Trailblazer, Encounters Bumps in the Road – NYTimes.com.