Today we once again meet Jim, our soon-to-be-bankrupt friend. Poor Jim just can’t catch a break – every time he comes close to breaking free from the “living month-to-month” cycle, something (or someone) pulls him back into the fray.
Remember that Jim’s parents are bankrupt, and have been for over eight years now. They have taught Jim everything he knows about money, and for some reason he still listens to their advice. Today’s adventure involves unexpected maintenance on his car.
First, a bit of background information: Jim’s financial life is contained within a single checking account plus a debit card. He has no credit cards (since his bankrupt parents convinced him that they are inherently evil), nor does he have a savings account. He DID have a fledgling savings account started, but he emptied it in order to… well, you will see.
Jim also owns an aging car. Recently it has been giving him A LOT of trouble.
Jim: Man, you would NOT believe what happened to me last week. I was driving to my buddy’s house when my car started acting funny. It was acting sluggish and all, then it died on me, during rush hour! Not only did I cause an impressive traffic jam, I had to pay to get my crappy car towed.
That stinks, Jim. It sounds like your alternator needs replacing.
Yep, but more than that. My battery needs changing, too. Plus, I already know that my AC unit and my transmission aren’t going to make it much longer. Sometimes I think this crappy car isn’t worth fixing.
(Aside: that may be the smartest thing I’ve ever heard him say.) Maybe you’re right, Jim. Have you considered selling your car? We do live in a town with decent public transportation. Plus, we have pretty good bike paths. Perhaps you could sell your car, buy a good bicycle, and invest the rest as a “nest egg” for the eventual purchase of a better car. After all, you mostly just drive to school and work, and both of those places are on the public transit route (or accessible by bike). You also live a block away from a grocery store, so that’s no problem either.
Jim: Hey, that’s not a bad idea. I’ll think it over while I wait to see how much it will cost to fix my car.
Of course, my proposal for Jim to sell his car and rely on biking/public transportation will not work for everyone. The point is that it WILL work for Jim, given his location and simple transportation needs. Plus, biking is good exercise. (…) Now that some time has passed, let’s see what he decided. 
So, Jim, any plans to sell your crappy car?
Jim: Well, I talked to my mom about it, and she thinks I should just pay to get my car fixed. I guess that’s what I’ll do.
(Aside: He talked to his mom? His bankrupt mother?) I see. But isn’t that going to set you back quite a bit?
Jim: Yeah, a lot. I’ll have to wipe out my entire savings account, and then some! It’s a shame, but at least I’ll have my wheels back.
If you say so. What made you change your mind?
Jim: My mom didn’t think that I’d like taking public transportation, and that I wouldn’t stick to biking. Oh, and my brother is a freshman in college here, and she thinks I should be available to drive him around, since he doesn’t have a car right now. After all, he shouldn’t have to suffer just because I don’t have a car.
Sigh. Personally, that sounds like a miserable life to me – shuttling my brother around to the club or to friends’ houses. As for not “liking” public transportation, thousands of college students do it every day in this town out of necessity, whether they “like” it or not.
Riding a bike is no different. I ride my bike to the university almost every day, and I have saved hundreds of dollars in gas and parking permit fees over the past two years. I actually prefer it now over driving.
In the end, Jim wiped out his savings and paid to fix his crappy car (which is still giving him “nickel and dime” issues). Maybe it is worth it to him, but it’s leading him one step closer to a bankrupt life.