Advice Needed: Family of 7, One Income, Housing Deadline & Expensive Car Loan
Long Post so please bare with me.
I’m looking for some outside financial advice because I feel like I have several major decisions that all need to happen at the same time, and I’m trying to figure out the smartest order to tackle them.
We’re a family of 7 with 5 kids, and right now I’m the only one working. I bring home about $812 per week after taxes.
We’re currently staying with family, but that situation is temporary and we need to be prepared to move around October/November. Based on what I’m seeing in our area, I’m expecting rent to be around $2,000/month, and because our credit isn't great, I'm also preparing for the possibility of a larger deposit.
Here are our current numbers:
- Income: about $812/week take-home
- Electricity: about $500/month
- Groceries: about $600/month
- Gas: about $120/week
- Phone: $160/month
- Internet: $100/month
- Current vehicle/title loan: about $726/month
- Title loan payoff: around $12,000
- Vehicle value: approximately $30,000
- Student loan payment: currently $0 until November 2027
- Car insurance quote for two vehicles: approximately $777/month
Transportation is where things get complicated.
Our main vehicle is large enough for our family, but it has the $12K title loan attached to it. We also have a 2015 Ford Fusion, but it currently isn't running. It was overheating and stopped starting, and we don't know the full extent of the repairs yet. For planning purposes, I'm assuming it could cost as much as $5,000 to completely repair it.
Even if we repair the Fusion, it doesn't fit our entire family, so we would still need access to a larger vehicle.
I've considered selling our current larger vehicle, paying off the $12K title loan, and using the remaining equity toward another vehicle. That would eliminate the $726 monthly payment, but I'm worried about trading one transportation problem for another.
At the same time, we desperately need to build up cash for moving expenses, deposits, first month's rent, emergencies, and eventually improving our credit.
My long-term goal is to become financially stable, clean up my credit, and eventually purchase a home, but right now I'm mainly focused on getting my family through the next several months without making a financial decision that sets us back even further.
If you were in this situation, what would you prioritize first?
Would you:
Sell the $30K vehicle, pay off the $12K title loan, and buy something cheaper?
Keep the larger vehicle and aggressively pay down the title loan?
Put money into repairing the Fusion?
Focus almost entirely on building a move-out/emergency fund before tackling debt?
Do some combination of these?
I'm especially interested in hearing from people who have had to rebuild financially on one income with a larger family. I know the numbers are tight, so I'm not looking for judgment or a magic solution. I'm trying to make the best decisions I can with the income and resources we currently have.
What would you tackle first, and what would you absolutely not do in my situation?