This week was difficult in the Northern Cheapskate house.
Despite our scrimping and saving and planning, we had to do something we haven’t done for 7 years.
And it broke my heart.
We had to borrow money.
We haven’t had any debt except for our mortgage since we paid off our vehicles seven years ago. When you live on a single income (and just the little bit extra I earn through this blog and freelance writing), being free from debt is a big deal. It means you have a little bit more wiggle room in the budget to save for family vacations, retirement, or new cars.
When we paid off our vehicles all those years ago, we swore we would never have another car payment. We made a plan to start saving money toward our next “new-to-us” vehicles. We did a decent job of saving, but as, John Lennon says, “Life is what happens when you’re busy making other plans.” We had an expensive and unexpected repair to our garage foundation, several car accidents, and a transmission replacement. With each setback, we began to save again.
So last weekend when I drove our son to Urgent Care with a suspected ear infection, I noticed the car sounded loud. My husband, who drives this car most of the time, said he had noticed the noise recently, but figured he’d get it looked at the next time he got an oil change (which was due soon). I told him that it sounded a bit more serious and he agreed to take it to get looked at the next day.
My fears were confirmed. It was recommended that we not drive the car until we made the repair, which would cost $4,300.
This 2008 car had 137,000 miles on it. The “good” condition trade-in value was $4,000. We had already put more than $5,000 in repairs into it in the last 2 years and it needed new tires soon. Investing more into the car than it was worth didn’t seem like a great use of our money, especially when we had that looming, “What will go wrong next?” feeling.
This repair caught us by surprise. While we had been saving for this car’s replacement, we were counting on this vehicle lasting us at least another two years. We were not mentally or financially as prepared as we would have liked to make a decision, and to make it quickly.
Living with one car wasn’t an option. We live in a remote area. My husband works in a town 26 miles east of our home. The kids go to school 27 miles west of our home. We are always driving somewhere for something. We need reliable transportation.
Since both of our cars were aging, we had spent a little bit of time researching and dreaming about our next vehicles, so we had some idea of what we would look for in a new-to-us car. Armed with that knowledge, we spent a grueling 24 hours talking, debating and plotting possible solutions. We did some research and called auto repair shops to see if we could get a better price for the repair, but the response was the same. We looked for used cars we could afford to buy in cash, but they were all too expensive for their condition and mileage.
We finally found two cars – one brand new and one slightly used that we were interested in, but we would have to borrow some of the money to pay for them. After test drives and more discussion, we decided that the slightly used model was the best fit for us. It was a 2015 model, low in miles, in great condition with high customer satisfaction, and was a reliable model that will last a good long time. It also had safety features our older cars never had.
So after much anguish, discussion, and calculating, we are back in debt.
Friends and family asked if I was excited to get a “new” car.
I actually felt more sick than excited. I love the car, but for the past 8 years, I’ve extolled the virtues of paying for things with cash and staying out of debt. And now I felt like a total hypocrite. I was disappointment in myself. It was way too easy to sign those papers. Maybe I should have shopped more for a better deal. I should have worked harder to save more. Maybe I shouldn’t have let my emotions rush me into making a decision. I am extremely anxious about having a payment. Maybe my readers will stop reading now that they know I quit practicing what I preached.
And then I took a deep breath and I cried a little. I took another deep breath. I prayed. I thought about my situation.
Was it the best financial decision to borrow money to buy a “new” car now? Maybe not. But it was the best decision for our family out of all the options available to us.
Does this setback mean I’m not who I thought I was? No. I still believe that living debt-free brings immense freedom, and I will fight for that freedom again. I’m not perfect, and (I hope) you don’t expect me to be. This is a setback, but it doesn’t change my end game.
Am I happy about owing money again? Absolutely not. But I am pretty proud of the fact that we were able to make a $10,000 down payment. Not everyone can do that. It takes some of the sting out of the price of vehicle.
I am disappointed in how this situation played out, but I take full responsibility for it, and we will do everything we can to pay off that loan just soon as we can.
You see, it’s not just money I owe to a bank. It’s something I owe to myself and all of you.