There’s a beautiful, shiny, blue, 2006 Honda Civic coupe in my parking lot. I’ve owned it for nearly two years. The car has run perfectly – no maintenance issues or starter problems. It gets around 30+ miles per gallon – depending on my need for speed. Today, I’ve decided to sell it.
Two summers ago, I was in a different place mentally and physically. I moved for graduate school and I was a single guy looking to impress. The things we purchase, wear, and surround ourselves are often a display of our wealth – or lack thereof. I wanted a nice looking car (read: expensive-looking) that would last a long time and wouldn’t take much upkeep. I didn’t actually have the money, but the convenient credit was all too easy to acquire. It’s only now that I’m realizing my grave mistake.
I’ve paid $196 a month on my car loan for nearly 24 months. I pay nearly $40 per month in insurance. I pay about $30 per month in gas. And then… There’s depreciation. Conservatively, it costs me about $300 per month to own this luxury (after registration and taxes). My debt clock reads $37,753 – time to cut out the extras.
When I stepped back and examined my needs and wants, I realized that this expensive vehicle was the elephant in the room – the biggest extra I own. Over this summer I hope to sell the car, buy a cheap (2002 and earlier) Toyota Camry or Corolla and a bike. I’ll use the proceeds of the sale to pay off the rest of my $7,500+ left on the auto loan and take the difference to buy a vehicle in cash – no loans or credit needed.
I can’t keep kidding myself… I can’t keep saying that I’m trying to eliminate my debt, while keeping the largest liability in that parking lot. It’s time to make some sacrifices for my future.