Fifteen years ago we bought a van that was a lemon, and that frustrating experience combined with being very pregnant and knowing that with the birth of that baby we would be outgrowing our van motivated me to buy my first and only vehicle from a dealership.
It was so nice, getting a much, much newer and nicer vehicle. It felt prosperous. I felt on par with all the other carpool moms on the road in their nice passenger vans. Nope, no eight year old van for me!
The monthly loan payment was another story, though.
As the weeks went on, I enjoyed the newness and niceness less and less, and was more and more bothered by that monthly payment.
After three months I made a decision. I got a quote from the dealership that serviced my vehicle to find out how much they would pay if I sold it back. Then I went to our original dealership with that quote and asked if she could do better, after explaining that I would rather have an older vehicle and no debt.
She couldn’t beat their offer and told me to take them up on it – and she also told me how impressed she was with my choice, that it was very rare for someone to be willing to live within their means. (We had an interesting conversation as she shared her experiences selling vehicles and seeing people’s financial numbers when they qualified for loans, and her commenting that for a lot of people it was irresponsible to finance a vehicle.) Although we didn’t recoup the three thousand dollar initial payment we had put on the van, it was worth it for us to be free of that monthly debt.
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This week I’ve thought a lot about that experience, because there’s been a big something I’ve wanted to purchase. It sounds melodramatic to say ‘more than I ever wanted to buy anything’ but it’s honestly way, way up there. I’m not a high maintenance person and having this much desire for something is unusual for me. If I want something, it’s usually small enough and affordable enough that I just buy it.
I don’t have enough to buy it in cash, but I could easily qualify for a loan and have it paid off within two years. As long as my husband continues to be employed at his current salary, we can make the monthly payment without compromising ourselves financially. And I really, really wanted it, so much that I was willing to put aside any of my usual compunctions and debt-avoidance.
However…you know there has to be a ‘however’, right? I have concerns about the direction that the global economy is taking, and as such have been taking steps to tighten up our budget, to create more margin by building savings and reducing the amount we need to live on. It feels particularly important at this time.
Buying something on credit absolutely doesn’t fit into this picture right now. Even if I really, really want it. Even if two people I told about my excitement about this offered to loan me the money. Even if I’m pre-qualified for a loan of that amount and simply have to press a button on the computer screen of my online bank account to have it automatically appear in my account.
I thought about what a relief it was to sell our van back to the dealership, and to buy a replacement van with cash outright, just as we always had. I thought about how fleeing my pleasure of that acquisition was and how quickly the pleasure was overtaken by the pressure of the loan repayment.
Then I thought about this purchase. If life continues as has been for the next two years, we’d be fine financially even if we make this purchase. But what if we experienced a personal economic contraction during that two year period?
I didn’t want to think about negatives. I didn’t want to be fearful about potential downturns in the economy. I wanted to make this purchase!!
Fortunately, I do have a rational brain and in this case, my rational brain was my husband who said he really didn’t want to do it. Despite my resistance to hearing him say that, I couldn’t help but reactivate my own financially cautious brain, which was hovering there at the wings.
The more I thought about this, the more clear it became to me that I need to emotionally step back from this purchase at this time. Who knows, maybe it will come back again at a time that we can make the purchase without going into debt. Or maybe it will never come back but I can focus on the abundance of all that I have, rather than thinking about what I don’t have.
Right now, I’m choosing to simplify, cut costs and cut back in order to create a financial margin for our family. There are significant things going on in the financial markets, and I’ve decided that I’d rather be sitting on the sidelines with fewer expenses and some extra padding in the bank account to weather that instability.
Sometimes it’s really hard to be financially responsible. But along with my very acute disappointment, I have a sense of peace that I’m making the right decision.
Avivah
