Some of the financial decisions residents arrive at may not make sense to most people. I remind myself most people aren't residents. My example for today: buying a car.
I've been a tad irritated with my doctor husband for the last two weeks because he has spent nearly every moment of free time he has either doing online research, or at dealerships trying to work out a deal on a car. At first I thought he was just wasting time, because building luxury cars online is one of the ways he relaxes - or so it appears to me. Soon those luxury cars were looking more like used foreign cars and then the talk about maybe trading our car in, and then he was talking to salesmen and the bank. Maybe we don't need a new car maybe we do. It depends on which side of the checkbook you are standing. Oh, and by new I don't really mean new, I mean new to us.
The car my husband drives we bought three years ago after we dumped our savings fixing his old car. We find ourselves again in a position where we have spent thousands of dollars fixing this car with no guarantee that something else won't go wrong. It has 115,000 miles and is 8 years old. My husband has put at least 45,000 miles on it in three years and the odds are that something else is going to go wrong in the next two years. Somethings can be predicted. Miles + years = repairs.
So we have discovered that we can save an extra $50/month by trading his car in now for one with half as many miles, better gas mileage, and 3 years newer. Chances are better that this combination of miles and years will not yield as many repairs over the next year or two. We cannot afford repairs of any size at this point in time. It is still risky, but we're going to give it a go.
To most people this decision might not be the right one. After all, the car he is trading in will be paid off in two years. In two years he would certainly need a new car, and in two years we will be able to afford one. Great! But in the meantime, today we need that extra $50/mo even if it means we'll have a car payment longer. It works for us.
I've talked about our finances before. They aren't looking pretty right now. We have to come up with a way to save every available dollar over the next year. So we are canceling our basic TV package, canceling our home phone, dropping extra activities (races for my husband, stamp club for me, ballet for my daughter, etc), and trying to save money on everything else. The only thing we agree we won't give up is our gym membership, it has been my outlet for the last 2 years and they have free babysitting. Its the only time I get to spend alone and is money well spent if it means mommy will be sane. Again, cheaper than therapy.
So today we have a shiny, new to us, car sitting in the garage next to my van that is coming up on 100,000 miles. Hoping and praying that the van we don't have any payments on will continue to bless us with limited maintenance and safe travel for the next 2 years, at which time I am getting a new van! Probably just another new to us van.