Tuesday, March 1, 2011

Stupid Tax

Been There.

Done That.

Bought the painfully expensive t-shirt.

Sold the painfully expensive van.

Remember my cheerful post about our new van?  The one where I was like "I know this is stupid, but hey, we need it?"  Yeah, that was denial.

Stupid Tax is Dave Ramsey speak for going into debt.  As of this Friday, we are debt-free except for our mortgage.  That's a big except, but being out of consumer debt is a huge relief.

But it hurt.  Really hurt. 

To recap:
Years 1-2 of marriage:  Live in a cute apartment.  Sleep on floor with twin mattresses for a few months.  Pay off $24,000 in student loan/credit card/stupid tax debt.

Years 3-3 1/2:  Buy small, older townhouse that costs less than our combined salaries. Fix it up.  Put in energy efficient windows.  Resurface counter tops.  Put in tile.  Paint.  Go on vacations.

Year 3 1/2:  Wake up to biological clock and have absolute, total meltdown.  MUST HAVE BABY. 

Year 4:  Have precious, life-changing baby boy.  Leave teaching to be a stay-at-home mom.  Economy tanking.  Alex takes a new job 6 weeks after bringing baby home to our perfectly feathered nest.

Move to another cute little apartment in a new city.  Sell townhouse.  Lose on the deal.  '98 Malibu keeps breaking.  Buy nice 2004 Highlander.  Commit to building a house.  Cue financial spiral.

Year 5:  Move into new house.  Take out savings and buy new furniture.  See savings dwindle each month as expenses outpace income.  Conceive another precious baby.  Must have mini-van.  Everyone with two or more kids have a mini-van. 

Year 6:  Sweet baby girl arrives healthy.  Life is good.  Rollin' in the van.  High medical deductible.  Bleeding money.  Stress. Two kids. Sacrifice of time and sanity.  Stress.

Which takes us to October of last year.  We both arrive at the conclusion that is is just not worth it to have a nice car if it is a burden on the family.  We literally could not talk about money because it was such a source of stress.  So, we sell (dump) the van at a significant loss, take out Roth money (ouch, ouch, ouch), buy a cash car (2001 Taurus) and start digging out from the credit cards that we've used to float our high medical bills.

February 2011:  With our tax return (which was our hard earned money to begin with, not found money), we pay off the last bill.  We cough up the cash to pay a sitter for a long overdue date.  We buy nice car seats for our kids.  And dream of going to Hawaii.  Hopefully with, you guessed it, cash.

And now?  Save.  Rebuild savings- for medical bills, car repairs, a 'newer', but not new, car.  Maybe one day return to work when our kids are in school.  Pay off the house early.  Save so we don't have to eat Alpo at 75.

Little blog community, here's my promise to you.  I will not buy a car that I have not saved for ever again.  I will not buy any luxury item for which I have not saved.  If I do, I'll confess it. 

And when I see those shiny vans, with automatic doors?  I'll push aside the envy, roll past in my Taurus, and remember this: the borrower truly is slave to the lender.  And I'm done with being a slave to stress.

P.S.  This is meant in no way pass judgement on anyone.  Just my "debt testimony"!


Jennie said...

Indeed! I love Dave! There are no chains quite like that of debt. It's so completely suffocating. I'll give you a big hurrah! And tell you that Tauruses (Taurii?) rock. It'll be a good car, and they drive so much better when they're paid for, right? :)

(And that is a big except...but think of how quickly you'll progress on it now. Isn't it exciting in that nerdy kind of way?!)

Heather said...

we are so in the same boat! Debt free but oh so envious of the mini-van just not of the payment! Keep it up girl. Isn't it nice to not stress about car/credit card payments?

Jaybird said...

Thanks, girls for your comments. Isn't it funny that you can feel totally unique in your situation, and find out that you are just like everyone else? No one can have 'it all' because 'it' never satisfies. A new home, a new car, even a new baby-- the quest for the next thing drive you crazy. I'm trying not to let it!

Natalie Mead said...

Way to go! Yes, kids and medical bills would put a dent into anyone's savings. Very proud of my sister!