Thursday, July 31, 2008

Financial Responsibility is a Bitch

Teri and I have made a lot of progress in digging ourselves out of our massive debt hole. My student loan is long gone. Both cars are paid for. We actually have money in savings. But we still have a big credit card and Teri's massive student loan to get through.

Combine that with a desire to save up money prior to making large purchases. We haven't rolled any new debt in a couple years, and that's good, but we also are not saving any money towards specific goals. Any money we spend is less money that could go towards our debt. For example, we're about to go on a cruise. The cruise has been paid for outright, but we basically didn't pay anything on the credit card (except the minimum, of course) for that month. We'd like to get to a point of putting money away specifically for vacations (and several other categories), but would like to get debts paid off first.

I mentioned earlier this year that I had paid off my car. That was a first. Also, I have now reached the point where this is the longest I've ever owned a car. Part of that is that I really like my car. Part of that is that the car isn't having any problems, which is usually the point I stop liking my cars. Part of that is that there aren't any new cars out there calling to me that I'm willing to pay for. And part of it is this damned sense of financial responsibility that I seem to be developing. But this does not mean I am immune to the bite of the car bug.

I've been struggling for several months with the concept of "woo, we're debt free! Now let's go right back into debt with a new car!" I really should be saving money away to buy something big, but right now that just delays how long it will take to get the debts paid off. So it will be a couple more years before we have everything paid off, and then it will take a few more years to save up enough money for a car. While I like this car, I'm not exactly thrilled with the prospect of driving it for 5 more years, or more.

The solution I have arrived at is to buy an older car. If I buy something that is cheaper than the car I already have, then I can sell my car for more money, and free up some cash now. It's a tough call, since my car is already paid for, but I'm thinking of it as though I'm cashing out my equity in the car.

This past weekend, I implemented the plan. Behold:

This is a 1998 Acura Integra LS. This car represents a number of firsts for me. It is the first car I have ever bought without financing. I wrote a check and drove it home. At just shy of 130K, it is the highest mileage car I've ever purchased, and might be the highest mileage car I've ever owned (don't remember). It is the first time I have bought a car older than the one it replaces. And it... it... *sobs* it is the first automatic I've ever purchased for my own use. I've bought them for my wife, had use of my dad's car in college, but for a car that I'm buying for myself, they have always been sticks.

The next step is to sell my Saab (more on that soon). Once that is accomplished, I'm going to pay off the last credit card. This moves our debt payoff schedule ahead by several months. And in exchange for the sacrifice, I'll start stashing money away for the next car. Hopefully I can get a year or two of use out of the Integra, by which time I'll have saved up enough for something a little nicer.

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