Now that the new year is upon us, and life has settled down a bit, I hope to have more time to share my life and my thoughts here on the glowing screen. (It helps that I have been off the past week, allowing me to relax, rest, and recharge my batteries).
Looking forward, I see interesting times, in the Chinese curse sort of way. On a personal front, this will be the year in which I start truly decimating our personal debt. The new job meant a 66% raise over what was comfortable to our needs. And although I just succumbed to the lure of getting a new truck, (no really, there is a 2011 Ford Ranger Extended Cab sitting in my driveway right now) it was bought yesterday, in the old year. The new year will be one of paying off debt like a madman.
See, the 66% raise translates into being able to live comfortably while still affording to carry the mortgage on the house in Knoxville, pay rent on the house here in Huntsville, pay all of our bills, plus pay the new truck note. The mortgage will be gone in 3 weeks, which will free up a significant chunk of money to apply towards debt.
Now some may wonder at the sanity of buying a new vehicle as opposed to a used one. They may tout, "But it loses value the moment you drive it off the lot!" Well, it only loses value if you SELL it. I have bought mostly used cars all of my life. Asa result, I have had to become a pretty good shade-tree mechanic. I even spent one year working as a real mechanic back in the mid '90s. So i know all about the mechanical problems that occur when you have a used vehicle. As an example, my dad and step-mom have been paying $400 + a month on repairs every month for the last 3-4 months just to keep their vehicles running.
In the negotiations, I ended up with both a seven year "bumper to bumper" warranty and a three year service agreement. For the first 3 years, the only thing that I will have to pay for on maintenance are tires, brakes, and sparkplugs (if needed). If anything breaks that is not a maintenance item during the next 7 years, it will be repaired/replaced for free.
The last truck I had was also a Ford Ranger that I bought new in 1995. I only sold two years ago, after 13 years and 274,000+ miles of faithful service. In that time, I had only an oxygen sensor break on it. I put 6 sets of tires on it, did 5 tune ups, replaced the brake pads 4 times, put 2 clutches into it, replaced the timing belt once, and used it as a real truck, not a glorified car with an open trunk. When I sold it, I oculd tell that things were about worn out, and maintenance was going to start eating me alive. So I sold it for $1300.
This new truck we expect to keep just about as long. Unlike the last one, it has an extended cab, (which allows for the seats to be reclined, a BIG comfort on road trips) and is an automatic instead of a stick shift (this means my wife can drive it). Oh, and it is a Dark Shadow Grey instead of a maroon-ish wine-ish red.
The usefulness of having the truck, combined with the dependability of having a new vehicle, and the easily obtainable expected lifespan in my mind far outweighs the "depreciation" factor.
For those that are not aware, I keep close tabs on our finances. I have a custom spreadsheet that I use on an almost daily basis, in which I keep track of income, daily expenses and timing the paying of bills. I can use this spreadsheet to project "what-if" scenarios out into the future, and can look back at the last three years of our finances to see where the money has gone. Thanks to this spreadsheet, I can optimize and forecast the paying down of debt and know that baring some major unforeseen event, we will be debt free in three years. (It would have been two, but the truck isn't free).
The reason I am such a stickler about debt is that in the minds of both my wife and I, debt = slavery. Debt free = freedom. Neither of us like debt, and after the uncertainty of the past year or so, we are bound and determined to get our debt paid down. If I hadn't found a better job, I don't know how we would have met our bills up in Knoxville. :-/ Yes, I added to our debt by buying the truck, but the usefulness and dependability, not to mention lack of repair bills for the next several years, in my opinion trump the additional burden.
So, beginning this month, we are buckling down and focusing on reducing debt. Mind you, we are not going to be denying ourselves everything, but we will be weighing each purchase against the chance to pay down the debt a bit more.