Our ’99 Dodge Caravan has seen better days, but it’s still driving.
DH = Dear Husband
Ramsey’s indicator of financial wisdom
In May of 2012, I read Dave Ramsey’s The Total Money Makeover – the book that inspired us to start our journey out of debt. I remember a section in which Ramsey describes something that to me seemed strange.
- You are out of the debt trap.
- With enough money on hand, you look at something you’ve been wanting to buy.
- You choose not to buy it.
I was annoyed by that image. With an eye-rolling attitude, I thought, “Why would you choose not to buy something you wanted if you were debt-free and had the money to buy it?” I couldn’t understand why, according to Ramsey, such odd behaviour was an indicator of financial wisdom.
1999: Purchase of van on credit
Our Dodge Caravan just passed its 19th birthday. When we bought it in February of 1999, I was eight months pregnant with our 3rd child, and the mini-van era of our growing family began. Of course we borrowed to buy the van – because that’s what we did for all large purchases.
2009: Couldn’t afford to replace it
By year 10, our van had become a source of embarrassment for our 3 daughters. Their friends’ parents drove much newer and cooler vehicles. But there was no way we were going to replace it. In 2009, we were just coming out of a 6-year limbo in DH’s career – and still living its resulting financial distress. Although DH started a promising new business that year, we had no idea if it would fly. Much to our children’s mortification, we kept driving the van.
2012: Journey out of debt = No new car in budget
When it became clear that DH’s new business was succeeding, we felt a great relief! No more money crunch! We could go back to normal living!
But as we did “normal” – with more restaurant meals, a bit of travel, a new car for me … – we felt uneasy. Something didn’t feel right.
I first listened to the CD version of The Total Money Makeover after a friend had loaned it to me, and a light went on. “We’re in too much debt!” I realized. DH was likewise convinced, and the two of us became psyched to become debt-free!
So although we were no longer in the financial-crunch mode that we’d been in before, we were on fire to pay off our debts, and there was no room in our “gazelle intense” budget to replace our then 14-year-old van. Sorry kids!
2016: When only a 5-figure mortgage was left …
In the fall of 2016, over 4 years into our journey out of debt, we reached a significant milestone. Of our original grand total $257,000 in consumer, business, and mortgage debt, only the mortgage remained. And that mortgage had crossed the $100,000 line! From 6 to 5 figures! It was a great feeling! The finish line was in sight!
In the throes of this celebration, DH pulled up in our driveway one day driving a new Dodge Journey.
I knew that our then 17-year-old van could die any day and that DH wanted to replace it, when the day came, with a Dodge Journey. “This is just a test drive!” he insisted when I was clearly less than thrilled. It was a whole year later when he admitted, “That was a close call.”
A 5-figure debt is definitely better than a 6-figure debt, but we were going for 0 figures. We kept driving our old van.
A few days ago, DH approached me with a print-out from a used car business in our city. (Notice we’re planning to buy used now.) A 2016 Dodge Journey was available. Extremely low mileage. Almost 40% off the cost for new. We could pay for it outright without postponing our debt-freedom date of September this year.
There were good reasons to go for it.
- The van can’t last much longer.
- This is exactly the kind of gently-used vehicle we plan to get as a replacement.
- There is something to be said for buying proactively – in advance of the van dying.
On the other hand …
- The van is not giving us any trouble.
- If it did suddenly die, there would be no panic to buy immediately. We’d be a one-car family for a while, and we’d wait for the right used car to come along again.
We’re still driving the van.
Does this mean we’ve reached financial wisdom?
We’re within spitting distance of debt-freedom. We want a new-to-us vehicle. We can afford one that is just what we’re looking for. But we’re choosing not to.
How did this happen? How did I go from an eye-rolling, “Why would you choose not to buy …” to actually choosing not to buy? And how did DH go from a celebratory “test-drive” to agreeing with me in choosing not to buy? Have we reached that elusive state of financial wisdom Ramsey writes about?
Well, have we? Your comments are welcome.