Replacing One Stressor With Another
It's a tale as old as time. After grinding and grinding and grinding and grinding, a household will finally pay off that vehicle loan that's been weighing them down. In a single moment, that $400, $700, or $1,000 monthly payment is gone. For years, they repeatedly make these monthly payments at the expense of something they'd rather spend their money on. That $700 could have gone toward travel, dining out, giving, their children's college fund, or retirement. So many different options, yet every month, that $700 was sent to the lender.
Then, on one glorious day, the payment disappears! They own the vehicle free and clear, and that $700/month is immediately and permanently back in their budget to use in valuable ways.
It feels so dang good to be free from that vehicle loan! You probably know what I'm talking about. Life feels a little lighter, the pressure quickly subsiding. We feel a margin that we haven't felt in a while. One would think this would be the perfect time to harness said margin for the greater good of our family, right? Wrong!
Instead, most people make a different kind of decision. That vehicle we've been driving has some miles on it. It's not as new and exciting as it used to be. Their friends, family, and neighbors now drive newer and nicer vehicles. And here's the important part. Since they no longer have a vehicle payment, they have more margin if they want to add a vehicle payment. Therefore, they decide to purchase a new vehicle. And just like that, all of the progress and newfound margin are gone in the blink of an eye. They justify it by saying their payment isn't much different from what it was before, so technically, they didn't go backward. And technically, they are right. That's the problem, though. They didn't go backward... but they didn't go forward. The decisions that stagnated them long ago will keep stagnating them into the future.
For one moment, they had a chance to make a different type of decision. They couldn't undo the past, but they had a golden opportunity to change the future, which can inspire hope and a sense of control over their financial path.....and they whiffed.
This decision pattern is one of the biggest contributors to our society's financial struggles. We like to blame it on other things, like inflation, wage stagnation, the cost of fuel, student loans, and our insane healthcare structure. Sure, these things can affect all of us, but our decision-making foibles around some of our biggest purchases (especially vehicles) are causing undue, unnecessary harm.
Today, I'm encouraging a different kind of decision pattern. When those moments in life happen, when we finally create much-needed margin, resist the urge to fill that gap with another major decision. Instead, embrace the freedom, relief, and opportunity that your newfound margin provides. Future you will rejoice!
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