Back in January, I was just coming back from my vacation when my debt level surged. This was a result of a bad combination of investment in the home daycare, clothing for kids, activities for kids, municipal taxes and my credit card statement from my vacation. We were being far from Norway’s way of living.
At that time, I’ve thought of selling my beloved RX-8 for sale and rely on 1 car only. For a family of 5, living with one car might not be the easiest thing. With today’s crazy life, can you really live only with one car for a family of 5?
Since you know that I’m pretty far from being frugal, you can imagine how hard it was to put the sale sign on my car as the first move…
When I first thought of selling my car back in September, I was truly torn. Don’t laugh, I really liked my car! You may or may not understand the following but this is how I see it: my car is a statement of my standing. In my industry, it is important to shine out. If I come to visit a client with my RX-8, I already make a good impression. My chances of closing are better with an uncommon car.
I didn’t think of that aspect of my job when I purchased the car though. I actually wanted a sport car to do the 1 hour drive to work each morning and evening. But then I realize something; most of my clients were talking about my car when I met them. It became some kind of magnet. They were curious about the engine (it’s a different technology) and wanted to know how fast it could go (duh!).
So by selling my car, I wasn’t just selling 4 wheels and a steering, I was selling a part of my unique selling proposition. I was selling my “status”.
On the other side, I also kept piling up car maintenance bills for the past 18 months and this was getting on my nerve big time. For what the car cost me, it became ridiculous to keep it to maintain some psychological status.
But what made me put my money where my mouth is was another factor. For three weeks in a row, my car was gently sunbathing in my driveway. Before selling my car, I’ve tried not to use it for three weeks… and it works! Then, I came to this shocking truth:
My car was just a leaking bucket wasting my money
So I took the decision of getting rid of my sport car. I know… it’s about time! But on the other side, I wasn’t convinced we could live as a family of five with only one vehicle. My car was expensive, but using my SUV only could lead to some schedule complication.
My daughter has swimming classes along with ice skating. My son plays soccer. I often get to work during one evening per week. How can I manage all schedules within using one car?
Funny enough, this question worried me a lot but answers were very easy to find. We put most kids activities over Saturday and Sunday morning and we kept a tight schedule on our fridge to make sure everybody knows where they are at anytime. Worst comes to worst, we can always take a cab and pay $10 for the ride. This is a lot cheaper than paying for winter tires, oil changes, gasoline and car insurance!
But instead of selling 1 car, I’ve sold both of them! Since I’ve made the decision of keeping 1 vehicle, I wanted to make sure I didn’t get stuck with problems. I can’t afford losing time at the garage and I don’t really want to put more money in car maintenance.
By selling both cars, I had the possibility of buying a brand new car with the same monthly payment. I’ve extended my loan to another 7 years (I had 2 remaining on the Tribute), but now that I don’t use my car much, I probably won’t reach over 150,000 km within that period. This will leave this new car in a very good shape for the time being.
On the other side, I’m saving money on car maintenance and time. Since I don’t have another car, saving time spent at the garage was crucial.
After two months of using a single family car and I tell that we spent the huge amount of… $10 for a cab! We are currently saving on all car maintenance along with car insurance. It has helped our current budget and generated more cash flow to pay off our immediate debts (credit cards and personal loans).
Now that we have cut on several expenses and generated extra income from the daycare, I’m seeing a positive impact on our monthly budget. Our debt repayments increase month after month and I am now looking to cash my bonus in January to make a big debt payment!
What do you think of this strategy? Would you have sold both cars like I did or kept the old Tribute with only 2 years worth of payment remaining?