decisions

Returning Thoughts

I am in my car a significant amount of time.  I have tons of time to think about so many things.  One of the questions I find myself asking is “What in the world do people say when they see my car?”.  My first response is usually laughter because I imagine what people might say who would never be caught dead in such a car.  To make it even more amusing I have a DaveRamsey.com sticker on my bumper that says, “Act Your Wage”, beside another “Anti-Debt” sticker.

To me this makes TOTAL sense, but the average person might say something like, “Hey look, that guy is acting his wage and from the looks of it he doesn’t make much!”.  Hahahahahaha!  It’s real funny until you consider how much we are actually saving each month.  We’ll get to that in a minute, first let me tell you what I currently drive.  I proudly drive a 1985 Honda CRX.  Honestly, for a 24 year old car it’s not all that bad, but it is missing some body work here and there.

Do I Care What People Think?

I used to care, but not anymore.  Society encourages us to try and keep up with the Joneses, so as did many, I fell into the trap too.  Coupled with our desire to “need” more than we could pay for, it was real easy to justify such a purchase without even considering what we were giving up in the process.  Would I enjoy driving a newer, easier on the eyes, smoother riding car with power steering?  Absolutely!!  The question then becomes, “Life is too short and I work too hard, don’t I deserve to have a “brand new” vehicle?”.  The short answer is that you only deserve what you can honestly afford, and you still have to consider your priorities.  If your car payment is made but your struggling to feed the family you can not afford the car.

For me it has become very simple.  If you have to go into debt in order to get something, then you can’t afford whatever it is, hence the fact that you would have to borrow to get it.  Many would disagree with that until they turned blue, but let’s simplify it even more.  Suppose for a second that credit cards did not exist.  If you walk into a store to buy something only to realize that you spent the rest of your money on the bills, the truth of the matter is that you can not afford anything because you don’t have any money.  Some would still argue that there are more complex issues to consider, it’s not that easy.

There is nothing complex about distinguishing a need from a want and making a mature decision.   I have decided to care more about planning our future than what someone who is broke might think of me because I am driving a $500 beater car. (it looks like a hippo tried to take a bite out of the side.)  Although I would much rather drive something newer, the sacrifice that I am making now will be more beneficial than the feeling I would get if I had a white BMW with leather seats.  A feeling does not pay my bills, take care of my family, or put food on my table, but saving money and making smarter financial decisions do.  I will work on the feeling later when I have plenty of wiggle room to do so comfortably.

Burden Or Blessing?

If you have a car payment and are obligated to make that payment NO MATTER WHAT, even though it may not seem like a burden now, it could easily transform into one in the future.  How many people are upside down on their car loans right now because they could not predict a rapidly declining economy?  Certainly, this is a burden.  The truth is that when you put yourself in this position, you are limiting your options so severely that the only real options are bad ones.  Burden!  It is better to make a decision based on strength rather than weakness.

Consider the alternative.  You have a nice $2,000-$4,000 paid for car that has already lost most of it’s value.  (Someone else took the hit on the depreciation.) Now add the current economic decline and ask yourself if you are experiencing a burden or a blessing.  You don’t owe anyone any money.  Blessing! The economic crisis is easier to manage when you don’t have that extra chunk of money going towards car payments, higher insurance premiums, and higher property taxes.  Blessing!  In extreme hardship, you have the option to sell the car if you have to, and even if you do take a small loss from what you paid, you will have that cash in hand to get you that much further.  Blessing!

Our Car Snapshot

Before:

• Paid for Volvo
• Debt-Infested Vibe (Monthly payment of approx. $290, property taxes of approx. $250/yr
• Insurance for both vehicles was $146 per month

After:

• Paid for Volvo
• Paid for Honda (saving $290 per month plus tons of interest, with property taxes well under $50 per year.  We no longer owe someone else $8500)
• Insurance for both vehicles is approx. $53 per month

I’ll leave you with this final thought.  If you answer this question honestly you will get the most logical answer every time.  Is owing someone money better than NOT owing someone money? There is only one right answer. Even if you agree with using debt you must acknowledge that not owing someone money is ultimately better.

My recent upgrade to a newer vehicle without going into debt.

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