After reading Part 6 of my story, Anonymous Reader writes: “I can’t believe after all you went through, you didn’t learn your lesson. […] What are you going to do about this egregious lapse of reason?”
It’s an excellent question, even if it is a bit hard for me to swallow. But before I begin telling you what I plan to do (a topic for later posts), let’s examine why I made such an “egregious” mistake–namely, adding about $47,000 to my total debt load in a single year. (If you don’t know what I’m talking about, read my story starting here.)
As I tried to explain, one reason I went into more debt was greed. I let my desires get the best of me. Just because I was moving in the right direction (paying off debt) doesn’t mean I was no longer subject to emotion and the lapses in judgment it causes.
Here was my reasoning for buying my motorcycle.
1. My dad already has a motorcycle. It would be fun to go riding with him.
2. My dad is in his 50s. Won’t be long until he’s over 60. If I wait too long to get a motorcycle, I might not get to ride with him.
3. Hmmm… what motorcycle do I want? Safety is a priority, and BMW is the only company that builds motorcycles with ABS breaks–very important in Colorado where there’s frequently gravel on the roads.
4. Which model do I want? Well, that BMW K 1200 R is pretty sweet. Oh, 163 horsepower should do.
5. But no. I can’t. I don’t have the money for it and I don’t want the debt.
6. (Months pass. Then…) A special financing deal? That’s cheap money. It will hardly cost me anything to borrow that money. Why the heck not? After all, I deserve it.
That, in a nutshell, is the thought process I went through. And that’s why I road a brand new BMW motorcycle to my house in December 2006.
Could I have gotten a less expensive motorcycle? Absolutely. Was it right to go into so much debt over a “boy toy?” No. But I did it anyway. I share my thought process with you so you can see how easy it is to justify expenses when we want to.
Now, the minivan.
As I already mentioned, my wife became pregnant in February 2007. She is due in two weeks… about November 4. When we found out she was pregnant, we knew we’d have to get a larger vehicle.
We had turned in a leased vehicle and we had a 2001 Hyundai Elantra. We still own the Elantra. It is paid for. The problem is, it is impossible to fit three car seats side-by-side in the back seat. You just can’t do it.
So we knew we’d need a bigger vehicle, probably a minivan. We knew we wanted a Honda Odyssey or a Toyota Sienna simply for reliability reasons. We looked at a few used options, but they were for the most part badly abused.
And with Honda Odysseys in particular, it seemed they didn’t depreciate much. You could buy a used one with 35,000 miles on it for $26,900… or a brand new one with zero miles for $31,000. Would I pay $4,000 for an extra 35,000 miles worth of engine wear and tear? Yes, I would. And I did.
Again, could I have purchased an older minivan for $15,000 or less? Absolutely. But I didn’t.
I’m not trying to justify my behavior or my actions. I’m only sharing the thought processes I went through. Perhaps you can relate to them. Perhaps you have used similar lines of reasoning to justify your own credit purchases.
Anyway, the decisions have been made and my financial situation is what it is. It may be a let down reading Part 6 of my story after reading Parts 1-5. But what would a story be without a little drama, right?
So, I now have some decisions to make. As Anonymous Reader asked so well… “What are you going to do?”
Of course, I’ve considered many different courses of action. But I haven’t arrived at anything concrete yet. There is pain involved in making these decisions, which makes it difficult to take action.
If you were in my shoes, dear reader, what would you do? Please leave a comment and let me know your thoughts.