Wow, it has been a while since I did a financial related post....but, here goes.
Most of you know our financial situation (I have been honest, some may say too honest....lol), so I pose this scenario for you.
Hubs and I will be getting back $xxxx.xx from the government in Feb/Mar (once we finally get our W2 from Hub's work), and we are trying to plan what to do with it.
See, my vehicle is a piece of junk! Seriously. The exhaust system needs to be fixed, it needs a new transmission, it has over 250,000 miles on it, and it really needs an oil change.
Anyway, should we spend a good portion of our income tax return on purchasing a newer vehicle for our family (one with less miles, or none would be nice, and larger to accommodate our family), or should we use this money to reduce our debt (also spending some money to fix up my vehicle so it is in proper running condition....at least to the best of our abilities)?
If we had a good credit score, I would say in an instant that we should just reduce our debt because if something happened to my vehicle we could get a loan for a different one, and then pay off the loan amount with the 2010 income tax return. But, we don't have a good credit score. I am pretty positive we would not qualify for any type of loan, and if we did the lender is stupid. Lol. Our debt to income is outrageous, and while we are working on reducing our debt...it is slow going.
So everyone, what should we do? Pay down debt, or purchase a vehicle? Thanks for all your help!