Lori Wyer’s WS320 Blog

Financial Analysis Project

Initial Analysis of Financing a Dream 

When I began this project and was asked to think about one of my dreams, it wasn’t too difficult!  Having lived on a very tight budget for the last 9+ years, there are lots of things on my wish list.

My Dream

My dream vehicle is a Chevy Surburban.  (I chose the 2004 model, because it is gently used, yet drastically reduced from the brand-new selling price by about $14,000!!!)  But I wanted to do a bit of research and compare it to the Ford Excursion and GMC Yukon XL.  I went to Kelly Blue Book’s online site where I was able to directly compare the three vehicles.  Here’s a link to the comparison:

http://www.kbb.com/kb/ki.dll/kw.kc.sbs?kbb.OR;018953;OR047&97303;suv&616;GMC;2004%20Yukon%20XL&U;3;GM;C1;3;Yukon_XL;GMC;;2004&5&M8M30A2;M11M23A5;M12M10A2;&&&usedcarstab

After the comparison, I decided on the Suburban.  The Excursion is too big and the Yukon XL doesn’t offer anything much different, but it’s more expensive.  My next step was to go back to Kelly Blue Book and get a private party price for the Suburban.  (I prefer not to work with dealers — they’re usually too expensive.)  Here’s what I found:

 PS0014.jpg

I should be able to find an ‘04 Suburban in good condition for about $23,000.

As far as a trailer is concerned, I will set a limit of $15,000.  The practical side of me refuses to pay more than that for a recreation activity that will only be used occasionally.  So that’s the amount I will budget for. 

The Reality 

Unfortunately, as you saw in our current budget, that’s not possible at this point in time.  With our current income and expenses, we are just getting by.  And there’s not much of anything that we can manipulate in order to afford it, because we do need to eat and I’m not willing to sell my house to buy a toy!

However, there is light at the end of the tunnel.  As you saw in our anticipated budget, our situation will change drastically in the very near future.  I am slated to graduate with my BS in ’07.  From there I will get my MAT.  If things go according to plan, I will have a classroom of my own Fall ’08.  When that happens, we will be in awesome shape!

Our anticipated budget will have about $2400 more per month.  When I adjust for the Suburban and trailer payments (using loan calculators available online) and additional expected budget increases, we will end up about $1,900 ahead each month.  The only thing that’s missing is the insurance cost for the trailer.  However, any pay increases that my husband receives is also left out.  So, bottom line, we will be in great shape!  If we choose to make this dream a reality, we will very much be in the position to do so.

What’s very encouraging is that this is a dream that’s very easily made into a reality.  Thousands (if not millions!) of people have travel trailers.  In fact two of my brothers do.  They are an invaluable source of information as to what we can and can’t do.  (They are mechanics as well.)

Personal Finances

I used Microsoft Excel to set up a monthly budget.  I used the “Worksheet for Monthly Expenses” to determine what categories were applicable to my budget.  (I do think, however, that if I were going to do this on a regular basis for my household budget, I would choose to invest in Quicken.) 

I input all the necessary information and as you saw, we are just making it.  But that’s one of the sacrafices my husband and I agreed to when we decided that I’d be a stay-at-home mom.  Unfortunately, there have been circumstances over the last 7 years that have been out of our control that have made me being a stay-at-home mom even more of a financial struggle. 

However, as you saw in our anticipated budget, we will be in very good shape when I start teaching.  I did the two budgets side-by-side and manipulated some of the amounts.  There are certain expenses of our budget that I know will increase in the future.  But there are also circumstances that will change as well.  Our current vehicle will be paid off.  I calculated the Suburban payment price based on it’s selling price minus what our vehicle would sell for.  Additionally, we won’t have any credit card debt by that time, as we are on a budget now to pay that debt off.

Barriers to My Dream?

Money, money, money!!!  But fortunately, that’s a temporary situation.  I am grateful that my new career will open up opportunities that haven’t been available to us for many years — since before we had children, when we had two incomes.  I am also thankful that my dream is a relatively practical one and it’s not something that’s completely out of my reach.

Additional Resources

To get some needed information as to how to go about buying a travel trailer, as well as places to camp, and even HOW to pull a trailer, I found the following resources:

http://www.ecampsite.com/resources/rvhookup/beforeyoubuy.php

http://www.newrver.com/publish/usedtips.shtml

http://www.roadtripamerica.com/rv/Comparing-Types-of-RVs.htm

http://www.foremost.com/PRODUCTS/RV/Links.htm

http://www.rv-insurance-coverage.com/rv-articles.asp

http://www.findarticles.com/p/articles/mi_m0FCQ/is_5_16/ai_71875102

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