Thursday, July 01, 2010

Our big financial change

In a post a few days ago I mentioned that Brian and I were working on some big financial changes.  It's no secret that we long to live a debt-free, cash-only lifestyle.  We've been on the cash-only part for quite some time, but have slowly been working on the debt part.

I like to be transparent on here.  So I will share with you that we owe about $14k on our car, plus an additional $3k on a line of credit.  (I'm not taking our mortgage into account in my "debt-free" statements.  That's a longer goal.)

We have a plan in place to pay off all that debt, hopefully by the beginning of next spring.  That plan, in addition to monthly payments, relies on liquidating our old stock funds (praying that the market isn't in the toilet) and using up some - or all of our tax return next year (which will be fairly large, thanks to remaining adoption credits). 

It's not a horrible plan, given that at the end we would be debt-free, plus have a car that still holds decent value.  But of course if there were an emergency, we would have nothing* left over and would have to sell our car to get cash.

So we've been praying and thinking about it a lot lately, and feel led to sell our car now.  Some of you may laugh at this, because it's a minivan - but it really is my dream car.  So this isn't an easy decision for me. 

Our plan is to sell our Odyssey, take the leftover cash, and buy a cheap minivan.  We will continue to pay ourselves a "car payment" each month, and after a while we will upgrade our car.  We will continue doing that until we are in a comfortable car that is completely paid for, plus we will have enough extra cash leftover earning interest that we will eventually not have to contribute to our car fund, yet continue to buy cars every few years. 

That last bit might have been a little hard to understand, so here's a quick video that explains it simply.

We're really excited about this next step, but also a little nervous.  It's a big step of faith, and I am trusting God that whatever car(s) we end up with will be safe, reliable, and great for our family.

Oh, and after only being on the "market" for one day, it looks like we have the van sold!

*I feel compelled to explain that we do have long-term savings and investment plans in place, just not super-liquid stuff.


spoonerbyrd said...

The Byrds give the Whites a major shout out! Holla!

Pure Mod Life said...

think what ur doing is awesome!...we have been on a similar plan, our goal is to be debt free in 2011, were still on target for that date. keep posting progress it's so inspiring!

Jennifer said...

I think you are smart getting out of the car debt. It seems like a vicious circle those car payments, and it is difficult to break the cycle. I think debt free is the only way. I only pay cash for cars. That said.. and I do worry with two kids being adopted, and my Honda CRV being a 2007, but I figure I will somehow continue to live a debt free live and they will learn frugal habits as well. I also only buy new cars since I am single, and I have absolutely no clue when things break on a car. With a handy husband, used would be great.

shell said...

this is good stuff. we have had only our house debt for about 5 years now. moving to a house w/a smaller mortgage last year, we might pay off our mortgage in the next 5 years! it is fun thinking how God can use our family when we have nothing tying us down. thanks for the encouragement!