Last week I talked about how I got my start living debt free. This week I want to talk about how I am currently downsizing debt within our family.

The Great Debate

My husband loves cars. The only thing he loves more than cars is buying cars. I don’t know the exact number but I’m sure this 30-something year old man has owned more than 20 cars in his life already. Since I’ve known him, we’ve gone back and forth on selling the Subaru Crosstrek he owned. I would always convince him to keep it, stating it was a worthwhile investment. It wasn’t until this RV life started that he was able to convince me to switch sides on this great debate.

I’d like to believe I have always lived simply and stayed away from debt, but the more I dive into this way of life the more I see where I’ve been wrong before. At the risk of turning this into a mommy post, I’ll reveal that Ed and I saw this car as something we needed in order to give our daughter the safest life possible. While pregnant, I sold my VW Jetta and we got a second, older model car. Ed drove that and I took to driving the safer, more reliable Crosstrek. I kept arguing to keep the car, telling my husband that this car was safer and better for baby and me.

I finally caved after 2 months in the RV. Ed brought up selling the car again, but this time with a new twist. For the first time, he disagreed that we needed a newer vehicle for Chelsea. He argued instead that he worked 5 miles from home and I rarely went out of town. What was the point of having the car payment? His car was more than reliable and safe, and we could find a car for cash to eliminate our debt. Hmmm, downsizing debt was the bandwagon I had just jumped on with this RV thing. Could I get rid of my car, too?

Yes. I would do it.

We crunched numbers, saw great value in eliminating this debt, and decided to attempt a sale while home in Connecticut. The car being a Subaru, we figured it held more value in the north than here in Alabama. If the car sold, we would buy another before we came back down south. Sound crazy? Maybe a little, but since we started RV life, we have come to realize the truth in “where there’s a will, there’s a way”.

Saying Yes to Less

I’m going to give you exact numbers a little later in the post, but I want to let slip this one number, 500. $500 people. That is how much our payment was a month for this car. Alright, I lied. It was $478. 89, but I always paid the extra to round up! Anyway, can you now see why this had to happen? My eyes were on the prize and this $500 a month had to go.

As you can imagine, saying yes to less bills is easy. On the flip side, saying yes to less comfort and reliability can be difficult. I was nervous. I knew downsizing debt was our number one priority, but I also knew I loved this car. It fit me. I knew how to shift it without thought, how lovely the heated seats were, and hell! I could even sorta kinda parallel park this thing. What kept me focused was my true desire to be free. If you check out my goal page (click here) you can see all I really want is to travel full-time with my family. Everything I have been doing lately is to accomplish this goal. When you have a goal like that, you’ll do anything for it, even push fear aside.

Ed Works His Magic

I know next to nothing about cars. I have no dream car, I have never had to purchase a car for myself, and I’d pretty much drive anything until the wheels fell off as long as the heat worked. Selling and purchasing another vehicle was a burden all on Ed’s shoulders. I put all my faith in my husband and told him I trusted him completely to find us the right deal.

I’m pretty sure that petrified the poor man but he did an amazing job! First, he went to an old friend named Brian to get advice and to see if his small dealership had any cars we might consider bringing back to Alabama. Brian was very helpful and offered to bring Ed to a local auction to find the right car. He also pointed Ed in the direction of Carmax, the largest used-car dealership in the nation, telling him they would buy our car outright for a decent price.

Ed decided to visit Carmax that day and got a quote for the Crosstrek. It wasn’t as much as we owed on the car, BUT when crunching numbers had decided on a bottom line and this exceeded it tremendously. We really wanted to get rid of that large payment! When Ed told me the number I was so excited. I had butterflies the rest of the day.

We were gonna do it. We were going to be free of our biggest payment! Even before taking them up on the offer, I felt so elated.

The next day, Ed went to the car auction with his friend. I didn’t hear much from him that day, but he came home with a 2003 Subaru Legacy L. The car had high miles but Ed said it was the best deal for us. I was happy to hear he had only paid $1200 for it because that left us with plenty of wiggle room for repairs. Ed quickly discovered it needed a new transmission and he located one on Craigslist for cheap. He enlisted his uncle for help with the swap and the car was ready for our trip back to Alabama.

Let’s Talk Numbers

Alright Liz, enough with all the talk. Give me the numbers. How much did the new car cost and how much debt did you eliminate? First let’s look at the Legacy we bought and repaired and keep in mind we paid cash for this.

Subaru Legacy (the car we bought)

Bought- $1200
Tax, tag, title- $150
Tune up- $150
Transmission- $200
Axles- $170
Stereo- $92
Rear end fluid- $38
TOTAL SPENT– $2000 (exactly!)

Now let’s look at the Crosstrek and see how we got rid of the payment.

Owed- $12,126
Sold- $11,000
TOTAL SPENT- $1,126

Okay, let’s add up what we spent.

$2000+$1126=$3126

$3,126 is what we had to pay up front to get rid of the $12,126 in debt we owed for the Crosstrek.

Spending up front saved us in the long run…

Let’s subtract what we spent last week from what we owed on the car.
$12,126-$3,126=$9000

$9000!!!!

So yeah, we spent some up front. And for some people, that might be too much to spend, but for us it was almost $2000 less than what we had decided was worth it. We were very pleased with the outcome and personally, I believe my husband did an amazing job finding a wonderful replacement car. And now we don’t have a $500/month payment! Which begs me to ask…

What would you do with an extra $500 a month?