10-06-29
It wasn't our fault that a drunken driver plowed into our parked car
in the middle of the night while we were on vacation more than 500 miles
from home. No one was hurt; it could have been worse. Our loss was
insured, and we got just enough money to pay off the loan. We needed to
replace that car anyway.
To buy a new car would have required borrowing the down payment and
taking on bigger monthly payments. We could have financed a used car
with lower payments, but that was beneath what we thought we deserved.
Another option was to lease a new car with nothing down and end up with
lower payments than we'd been making.
At this critical decision point in our lives, my husband and I blew
it. We made the worst choice possible: to lease a new car. It was a
decision that turned into a financial nightmare.
Our first leased car lost its value terribly, so we owed a lot when
the lease was up. Again, we had no available cash, so rolling the
shortfall into another lease was easy. We repeated this many times and
even upped the ante by leasing two new cars at a time. It became nearly
impossible to break this cycle, which went on for 22 years.
Looking back, it's easy to see the error of our ways. However, I
believe that even in my financially stupid years, if I'd taken five
minutes to visualize the choice we were about to make in light of the
future, I would have at least hesitated. I want to believe we would have
made a different choice.
This month, college seniors are graduating, and soon they will begin
new jobs, move into new apartments and face a world of new financial
obligations. Many of them already carry a load of debt. To those who are
in debt up to their eyeballs, as well as those who've come through
unscathed, I offer this unsolicited advice:
The decisions you make in the next weeks and months will impact your
life in a profound way for years to come.
If you decide to stretch out your student loan payments, take on car
payments, have extravagant rent, have a fancy wedding, buy new clothes,
take time off, take trips abroad and do all the other things you believe
you deserve, prepare to take a financial plunge from which it will be
difficult to recover. You will open the door to awful things, such as
depression, divorce and bankruptcy.
The other option is to jump onto an upward course by choosing
frugality. Even if you have student debt, if you choose to avoid new
debt and to live below your means so you can repay your debt quickly,
you will be on your way to financial freedom. Once debt-free, you'll be
ready to soar.
You've reached a critical decision point. There's no turning back
now. Your choices are clear. It's either up or down. Choose well.
Mary Hunt is the founder of www.DebtProofLiving.com and author of 18
books, including her latest, "Can I Pay My Credit Card Bill With a
Credit Card?" You can e-mail her at mary@everydaycheapskate.com, or
write to Everyday Cheapskate, P.O. Box 2135, Paramount, CA 90723. To
find out more about Mary Hunt and read her past columns, please visit
the Creators Syndicate Web page at www.creators.com.
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