Broke but Out of Debt

Yesterday, my wife asked me if I was depressed because we have so little money.  Yes, I am, I told her.

As Tevye the milkman pointed out in Fiddler on the Roof, it’s no crime to be poor.  I do believe that it’s possible to be both poor and happy, particularly if you appreciate the things you do have and value your family and friends.

The real thing that’s depressing me is the Infinite Loop of Poverty.  I feel like a modern day Sisyphus, pushing the rock up the mountain only to have it roll back down so that we have to do it all over again.

All of this was triggered when we decided to purchase a car last week.  Not even a new car, mind you.  A low mileage used vehicle is all we could manage without going deeply into debt.  Which is the point, I suppose:  We may not have any money, but at least we’ve managed to stay debt-free.

This wasn’t always the case.  When my wife and I got married 17 years ago, we had a lot of debt between us.  With two (small) incomes, we worked assiduously to overcome this problem.  It took a lot of years, but all the credit card debt and most of the student loans were paid off.  I am proud of this, particularly since I suffered two year-long stints of unemployment in the interim and my wife worked part-time for a few years and not at all for another four years.

And so I say to those of you who think you are stuck in debt forever that there is hope.  It requires dedication, however, including paying down debts first thing out of every paycheck regardless of what you’d really like to spend the money on.  Whatever that may be, it’s probably not as important as watching that big number that you owe get lower and lower.

I am fortunate that my wife is so good with money.  I don’t do well with numbers and would rather have someone else think about what has to be paid and when.  I suppose this goes back to my childhood, as my parents did not believe in giving “allowances” or in encouraging budgeting and planning.  If they thought we needed something, they’d buy it.  Otherwise, they’d rather that we didn’t have any of their hard-earned money so that we couldn’t waste it on frivolity.

In my young adulthood, the result of this was not pretty.  If my father visited me at college and handed be a twenty, likely as not it would be gone the same day.  When I began working, I still lived at home and treated money cavalierly; gosh, I’d get another paycheck the next week, so what was the big deal?  I spent it as quickly as I earned it.

All my life, the place where this came back to bite me was cars.  Transportation was my bête noire, my Kryptonite, my undoing.  I’d use my tax refund to pay my auto insurance.  I’d fill up my tank every time I was paid.  But the moment something went wrong with the car and I needed a couple thousand dollars to make things right, I was in deep trouble.  My father generously purchased a series of high-mileage clunkers for me, none of which lasted very long.  When I saved for a new car, my father generously put up some of the cash, or it never would have happened.

Then my parents began giving me their old car each time they purchased a new one.  They took very good care of their vehicles, so I knew I’d be in good shape for a few years.  One of those cars was wrecked when an old lady ran into me on the way home from work one night.  Another was wrecked by my young niece when we lent it out to her.  Another had to be sold when it’s engine was about to go, and yet another was a trade-in on the old Cash for Clunkers program.

After owning two cars free and clear for a couple of years, we decided to buy a new vehicle even though we had to finance it.  We made some very large monthly payments and eventually paid it off.  Now, however, it has well over 150,000 miles on it and little things started going wrong with it.  We finally decided to give it to our niece (not the one who wrecked our former vehicle, leaving us with just one car between us ever since), who was desperately in need of vehicle, and to pay cash for a used car for ourselves.

The only problem is that avoiding the interest payments associated with financing meant spending just about all our savings.  Hence, my feelings of depression.  I must have a car in order to get to work every day.  Once there, I work and work to save enough so that we can spend it all to buy another car so that I continue to get to work to make more money to buy another car.  It seems to be an endless cycle, which might not be a big deal to a 25 year old, but takes on quite a different meaning to one who is rapidly approaching retirement age.  The only way out of this loop is to earn significantly more money or to up the ante on savings.  Yes, I do think that saving money faster than you use up your car is the only real answer.

Still, I am grateful that I have once more managed to escape the millstone of monthly car payments with which so many others are saddled.  As Dave Ramsey points out on his radio show, taking the scissors to that albatross around one’s neck is a significant step toward financial independence.

Just don’t ask me for money.  I don’t have any.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s