Friday, July 15, 2011

My Sweet Ride.

Coming to terms with debt, frugality, hope and junker cars.

My wife and I have degrees, and the debt that comes with them. Actually, we have more significantly more debt than people do who get out of college, but I have a PhD and she had significant family issues in college both of which caused a pretty severe accumulation. If we pay on them like we are supposed to, I will still be making student loan payments with my retirement checks. We don't want to live that way however.

Lately, while the federal government has been making plans to raise their debt ceiling, my wife and I have been actively working to reduce ours. We have quickly moved out of consumer debt and now only have those student loans on which we can make payments above and beyond the official plan.

Living within one's means when one's means are massively reduced by student loan debt is not easy. We have made sacrifices. We have missed out on things. Our lives are struggles, but we are not just struggling to make ends meet. We are struggling to see those ends disappear. I have taken extra assignments and teach extra classes at work. We live in a tiny apartment. We drive junker cars. We are going to do this.

Still, we have to live. We need groceries, electricity, transportation to and from work and fun. We need these things even while we are living in a tight way. So we have to make these things cheap. We've generally tried to live with just one car between us. It is an old car, bought with cash, and requiring no payments. Still, it really isn't enough. Most days we can mash sharing the car with bus schedules (the bus stop is only a mile away) and make it work. Sometimes this is really, really difficult.

Furthermore, our cheap, old car is really not the best for getting some of the cheapest fun around. We live in a town on the edge of the beautiful Gila National Forest and the Chihuahua Desert. Hiking, camping and nature are obvious and free-to-cheap fun. Our little car, however, doesn't do well on Forest Service roads.

So I needed something with better clearance and that I could drive maybe once or twice a week to work. The problem was that it would have to be a second car purchased while living on our tight budget. I found one. I bought a car this morning for only $250. It meets all our needs.

To me, finding any functional automobile at all that fit in our budget was a miracle. You might say: "That hunk of junk! How is that a miracle?" We can afford it. It can get me to work a couple days a week and will be a great fishing, camping and hiking car. It's perfect. It's a miracle. It gives me hope.

Furthermore, I really think that junker cars are usually a better deal. I always drove junkers growing up. My dad always drove junkers. One day, when I was 19 and knew everything, I decided I was tired of buying junker cars. So, I went into debt to buy a "reliable" car. It was an Oldsmobile Cutlass Sierra. I bought it for $3000. According to an online inflation calculator, that would be 4355.56 in today's money. I ended up spending more on repairs every month than I did on payments and to make both I took out that first student loan.

Junker cars save alot. According to an article originally posted in Kipplinger's Personal Finance, the average American spends about $479 per month on a car loan. To me that means that if you buy a $500 car about every two months, you're money ahead. The truth is, that no car I've ever bought for this amount has lasted fewer than three years. See how much I haven't spent?

Now, don't misunderstand me. If I thought I was going to have to live this way forever, I'd be borderline suicidal. I don't believe that. I think that finding a car for $250 is a miracle. I think that miracles happen like this all the time if a person is managing his or her finances correctly. I believe that more miracles are coming and that we will be able to get out of debt much sooner than our creditors think and that when we do, we will be able to buy very nice cars, with cash, and no car payment.

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