Friday, March 11, 2011

Our Biggest Financial Mistake

When it comes to our personal finances we often tend to think that every thing needs to be kept to ourselves.


Wouldn't it be helpful to hear others success stories?

Wouldn't it be helpful to hear others failures?

Then we can learn from them.

Today I want to share one of our failures. This happened 8 years ago and yet it is still fresh in mind and I want to kick myself every time I think about it! Looking back, the one good thing that came from taught us a big lesson that I will never forget!

A little over 8 years ago Brad and I found out that in order to have children we were going to have to go through a very expensive fertility treatment. We started finding money to pay for this. We cashed in a life insurance policy and sold my business. After doing this we found out that we could simply switch our health insurance through Brad's employer and this treatment would be covered.

Now we had extra money.

Were we wise with it?

I think you know where I'm going.

One day, we decided to go car shopping on a whim. Since Brad is a Ford Motor Company employee, we headed to the local Lincoln dealership.

We test drove a Lincoln LS. It was beautiful. It smelt so good. It had a sun roof, heated leather seats, and so many things that I didn't even know cars had! It was last years model, so there was a discount plus we got the employee discount, and 0% financing. I mean, c'mon! It was a steal!

Did I mention it smelt REALLY GOOD!?

So, we drove it down to the local Wendy's and made our decision over a fast food hamburger.

Yep, that's right, we really thought this one over. Can't you tell?

We drove off the lot with our good smelling car and a big loan.

One Word - STUPID!

But hey, we looked cool. To be honest with you, I never felt right in that car. As much as I loved that smell and that sun roof, every time I drove it I felt like I should not be in it. I did not have a peace about it.

Now mind you, I just sold my business, so I'm not working. Then a few months later Brad's job took away the time and a half he was making on overtime. Our income is cut again. Now this car payment has us a little strapped.

Then later that year, my fertility treatment works and I'm having triplets! Well, now that Lincoln LS is not looking so good. Where on earth am I going to put these babies?

Thankfully we found a buyer for the car and got from underneath that car payment. We found a nice, used, no-frill Ford Windstar to replace it that I still drive to this day. It does not smell good, it has no sun roof, but it also has no monthly payment and it runs just fine.

I'm sharing this with you, so that maybe you can learn from our stupidity.

Here are a few suggestions and things to think about before buying a new/different car:

1. Pray, Pray, Pray. Make sure that you are talking to the ONE who is in control of your finances and seeking what He says about it. Which also means getting into the Word. As I've pointed out in previous posts, the Bible has a lot to say about money.

2. Ask yourself, 'Why the new car?'  Looking good and the great smell are not good answers and means you should probably not buy a new car.

3. Really look at what you can afford and how much you want to spend? Just because you can afford that car payment this month doesn't mean you will be able to afford it in 6 months. If you are just making it by adding it to your budget, rethink it.

4. If you are taking out a loan, my suggestion would be to make sure your payment is low enough that you can make double payments or more to get from underneath that debt as quickly as possible.

5. I sell insurance and there is something called GAP Insurance. This stands for Guaranteed Auto Protection and will protect you if you get into an accident, total your car and your loan amount is now more than what your car is worth. If GAP Insurance is something you would probably have to purchase on that new vehicle, I would suggest thinking twice about actually buying that car.

6. Rarely is a car a steal or a great bargain. No matter how great the discount, the money you pay is still going to be quite large and let's face it, vehicles are not good investments.

(On a side note, since Ford Motor Company is the source that feeds our family, I suggest that if you want to buy a new car - Buy Ford!) Thank you ;-)

Read my other posts on Finances:


What Led our Family to Budgeting



A Few Great Resources


Rachael said...

Thank you for this post. We are currently thinking about getting a different car since we keep having to spend money to fix our's been around $1000 the past 6 mos. We only have 1 car and I want it to be dependable. So we are thinking about getting a van and selling/trading the car in. Thanks for your advice. It really is helpful.

Melissa said...

Thanks Rachael. Glad that this was helpful for you. Hope everything works out for you with the car situation. Never fun having to make that decision about buying a new car.

Warren Baldwin said...

Don't remember how I found your blog, but I enjoyed this article. I teach a course for a junior college on "Marriage and Family" and we are covering finances now. This would be a great story/illustration for them. Mind if I print, copy it and pass it around?


Melissa said...

Warren, You are more than welcome to share our story. Would love for others to be able learn from our mistakes. Thanks for coming to my blog.

Warren Baldwin said...

I'll use this article on Monday. Thanks.

I'm doing a series on Family Fountain now of guest posts on marrige. Articles are covering all aspects of married life. Would you care to submit a guest post dealing with marraige and finances? Just a basic primer would be great, if you'd care to do it (and you probably already have an old post you could revise a little that would work).