Sometimes stuff happens: illness, job loss, divorce. When things get super-tight and you’re casting around for a cash influx your eye might fall upon that fairly new vehicle. Maybe you should sell it. Or you might wonder, “Does refinancing a car hurt your credit?”
Yes, it can. But in some cases it might be the best – or only – option for when things go sideways. (Looking at you, COVID-19.)
I tackled this topic recently for Self.inc. “Does refinancing a car hurt your credit?” covers the good, the bad and the WTF of this complicated topic.
On the face of it, refinancing a car isn’t a great idea. But sometimes it could be the right thing to do.
The most obvious reason to refinance is because interest rates dropped. This is especially true if you financed with the dealer rather than looking around for loan options. Given that the average new-car loan is $34,635 and the used-vehicle loan is $21,438, even a loan rate that’s just 1 percent lower will make a big difference over time. (Not-so-fun fact: The average used-car loan is 65.15 months long and the average new-vehicle loan is 69.68 months.)
You could even get some cash in-hand if you do something called a cash-out auto refinance, which is similar to a cash-out mortgage refi. If having cash is vital, this might be the right choice for you at this moment in your life.
For example, if you couldn’t make the rent during a COVID layoff, a couple of months’ worth of payments might stave off eviction. Or if you have credit-card debt at 18 percent and were eligible for a cash-out refi at a much lower interest rate, you would be able to pay off the card and improve monthly cash flow. (Ideally you’d use some of that money to start an emergency fund, because the only thing certain is uncertainty and we need to positions ourselves to punch back at it.)
As always, you need to look at the big picture – and to look at it from all angles. Just because you can do something doesn’t mean you should.
A prime example, so to speak, is that credit-card debt is unsecured. A cash-out auto refi debt is secured – by your car. If something else goes wrong and you can’t make payments, you could lose your wheels. Or you could just go upside-down on the vehicle because the new obligation is longer than the original loan. Should anything happen to the car – theft, a crash – you could get stuck with paying the after-insurance balance on a vehicle you can’t even drive.
Like I said: It’s complicated.
Before I was assigned the piece, I’d never even thought about refinancing a vehicle loan. Frankly, I hope I’m never in that position. But it helps to know your options, or to be able to advise a relative or friend on theirs.
Food insecurity in 2021
Lately I’ve had a chance to write a couple of articles for my old friends at Money Talks News. Both are on the frugal side of that site, vs. the “earn more money/save for retirement/invest like a pro/live like no one else” categories that MTN also does.
In a March 2021 publication called “The Impact of Coronavirus on Food Insecurity,” Feeding America reported that its food-bank network distributed 7.5 billion pounds of food in 2020. That’s a 44% increase over the previous year! The nonprofit hunger relief agency estimates that 42 million U.S. residents (including 13 million children) will be at risk of food insecurity in 2021.
The U.S. Department of Agriculture reports that “food insufficiency” jumped noticeably during the worst of the pandemic. Between April and December 2020, as many as 11.9% of households reported this problem. By comparison, in December 2019, only 3.7% of U.S. households experienced food insufficiency.
Do I have your attention? Good. Those two sources led me to suggest an MTN article called “5 ways to fill your pantry with free food.” It’s the kind of article that gets good reactions from readers here – and since food costs are jumping, I urge you to check out this piece.
Don’t wanna drown in zucchini? Check out my other MTN article, “How to plan a no-waste garden in 2021.” Among other things, it links to a couple of “plant calculators” created by pro gardeners, to make sure you have enough veggies to eat and to freeze, can or otherwise preserve. Or to give away, which is one of the great joys of gardening.
The article offers other tips for beginners, especially “how not to overdo it.” The Old Farmer’s Almanac notes that it’s better to be proud of a small garden than frustrated/overburdened by a bigger one. You can get a surprising amount of food from a small plot.
Even those without arable land can grow in containers. This year’s catalog from Renee’s Garden, for example, features options like container bush beans, cucumbers, romaine, slicing tomatoes, snap peas, spinach, romaine, kale and, yes, zucchini. [As a Renee’s Garden affiliate, I get a small fee if anyone orders through the above link.]
Enjoy your summer. We’re enjoying our…spring, I guess. It’s still in the 30s at night – and well into the morning some days. Will provide a garden update when there’s something to share.
Two chances to win
Finally, a couple of shots at prizes:
Wealthtender is giving away four great items on May 10. The grand prize is $250 cash (via Paypal or Venmo). The other three are $100 Amazon gift cards.
The Wealthy Nickel has put a $100 Home Depot gift card up for grabs. The giveaway takes place on May 16.
Just checking in on this on Wednesday A.M. What a way to start my morning, coffee cup in hand (since I skipped two morning exercise classes). I do have some plants ready for the ground, but want to wait until after Mother’s Day to plant.
Hope you win one of the giveaways — you could use it to buy more garden stuff!