DH = Dear Husband
DH and I have four debts, each incurred through different circumstances. Ramsey’s advice never to borrow isn’t contingent upon circumstances though. So I sometimes wonder how we could have navigated each scenario differently to avoid debt. How would things have played out in the short term? What would have been the long term impact?
Wallowing in regret is a dangerous pastime, but it’s a good idea to acknowledge mistakes and recognize their ripple effects. It’s a practice that might help us to make better decisions the next time “circumstances” present themselves. As Oprah says, “When you know better . . . You do better.”
In a way, Debt #1 is my favourite debt. It’s the smallest of the four debts, and it looks like it will be killed off quickly. It also gave us a car we really like – a 2011 Ford Focus. And we’ll be paying it off faster than we’ve ever paid off a car. But it’s also a really stupid debt. We didn’t need to buy that car, and we shouldn’t have.
The Story Behind Debt #1
In May of 2011, the lease on our 2007 Ford Focus came due. Ramsey speaks out strongly against leasing cars – but that’s part of debt #2, and so I’ll deal with it when the time comes. For now, I’ll only say that I’d chosen the 2007 car rashly, and I didn’t like it. It too was a Ford Focus, but it was the young male version – black and sporty with a moon roof and a big fat spoiler at the back. The boys at my school liked it, but I, a middle-aged female school teacher, always felt an embarrassment driving it. Furthermore, it was a standard – annoying for the stop-and-go traffic I had to deal with driving to and from work every day. When the four-year lease was up, it was time to go into the dealership and decide what to do.
DH and I went in intending to buy the 2007 Focus. There was $8000 remaining to be paid. But our salesman, a former student of mine, was very good. DH, who has to do sales and marketing in his business, thinks our car salesman is brilliant. “He’s got us figured out,” he said. The 2011 Focus was soon going to be replaced on the lot by the 2012 Focus, and so the price was right. For $20,000, we could choose it. Would we like a test drive? Red, automatic, no moon roof, no spoiler . . . It was irresistible. And it smelled so new. And it drove so well. And it was such a good deal after all. Of course, my former student added, the 2007 Focus would be a perfectly good choice too. In our minds, by this point, it was chopped liver.
We went with the new car and felt very happy about it. It is a great vehicle, but when I consider the alternative, the purchase was so obviously a mistake. We committed to paying off our 2011 Focus at a rate of $1000 per month. If we had decided upon the 2007 Focus, we would have paid it off at that rate by January 2012, and we would have been in a position to pay off the remainder of debt #2 (incurred by a course DH took) by June. We could have started off our Ramsey debt tackle this month by taking on what is for us, debt #3. Ugh! I didn’t know the numbers until just now. What a mistake! If we had bought the 2007 Focus, I would have continued to feel that embarrassment and inconvenience, but we could have been free of $21,000 worth of debt. Though as DH says, there’s no telling if we would have paid off the older car so quickly, or if we would have continued to pay down debt at the same rate after we had. So no wallowing. Lesson learned. We will humbly chop away at debts #1 and #2 with the full knowledge that they were completely unnecessary. And the next time “circumstances” arise, we’ll do better.