It wasn't our fault that a drunk driver plowed into our parked car in the middle of the night while we were on vacation more than 500 miles from home. The car was a total loss, but no one was hurt; it could have been worse.
Our loss was insured, and we got just enough money from the insurance company to pay off the loan. We wanted to replace that car anyway.
Buying a new car would have required borrowing the down payment and taking on bigger monthly payments. We could have financed a used car with lower payments, but that was beneath what we thought we deserved. A better option — or so we thought — was to lease a new car with nothing down and lower payments than we'd been used to making.
At this critical decision point in our lives, my husband and I blew it. We made the worst choice possible: to lease a new car. It was a decision that turned into a financial nightmare.
Our first leased car lost its value terribly, so we owed a lot when the auto lease was up. Again, we had no available cash, so rolling the shortfall into another auto lease was easy. We repeated this many times and even upped the ante by leasing two new cars at a time. It became nearly impossible to break this cycle that went on for 22 years.
Looking back, it's easy to see the error of our ways. However, I believe that even in my financially stupid years, if I'd taken five minutes to visualize the choice we were about to make in light of the future, I would have at least hesitated. I want to believe we would have made a different choice.
Over a million people will graduate from college in the next couple of months. Some will start new jobs, while many are still looking; some will move into new apartments, while most will move back home. One thing they all share: They're facing a world of new financial obligations.
Many graduates already carry a load of debt. To those who are in debt up to their eyeballs, I offer some unsolicited advice. (And this goes for the rest of you, who might be years or decades past your college years but are still carrying a load of debt.)
The decisions you make now will impact your life in a profound way for years to come.
If you decide to stretch out your student loan payments and take on car payments, plus all the other things you believe you so richly deserve, prepare to take a financial plunge from which it will be difficult to recover. You will open the door to awful things.
The other option is to commit to an upward trajectory by choosing frugality. Even with student debt, if you choose to avoid new debt and live below your means so you can pay off your debt quickly, you will be on your way to financial freedom. Once debt-free, you'll be ready to soar.
You've reached a critical decision point. There's no turning back now. Your choices are clear. It's either up or down. Choose wisely.
Mary invites questions, comments and tips at [email protected], or c/o Everyday Cheapskate, 12340 Seal Beach Blvd., Suite B-416, Seal Beach, CA 90740. This column will answer questions of general interest, but letters cannot be answered individually. Mary Hunt is the founder of www.DebtProofLiving.com, a personal finance member website and the author of "Debt-Proof Living," released in 2014. To find out more about Mary and read her past columns, please visit the Creators Syndicate webpage at www.creators.com.
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