Reaching some milestones

I’m one of those people who is always looking for a milestone to mark, no matter how tiny. It helps keep me motivated to continue on this debt reduction effort.

The one I’m most focused on at the moment is to get the value of my car loan down below $12,000, which will happen next week, I hope.

The reason I’m so focused on this is that this will mark the point where we will no longer be `upside down’ on this loan. For those who haven’t heard this term, `upside down’ refers to the situation where – if you had to sell your vehicle – you’d actually receive less than you would still owe to your lender. It can apply to any kind of loan for any asset of course, though I guess borrowers are always `upside down’ on credit cards. I’ve already talked about how I think we paid too much for our vehicle to begin with (secondhand) and that negotiating a good price is the best way to avoid being upside down on a loan. In our case, we paid a fair bit more than the car was probably really worth because it had some extra features that we both liked, including a long range fuel tank (we occasionally travel across Australia in some fairly arid, very isolated landscapes, so this was an advantage). However, I now realise these extras don’t add much to the value and we should have negotiated a little better.

Anyway, $12,000 is only an arbitrary figure. We’d get less or more depending on the market and how keen we were to sell. And obviously this milestone is still a long way from owning the vehicle. But at least it signifies the first time in a long time that we could theoretically `sell everything up’ and do whatever came next, without owing anybody anything. I’m not intending to go anywhere and I don’t intend to sell the car, but it’s nice nonetheless.

In other news at present, we continue to make efforts to cut costs, though at times I question the line between frugality and being cheap (for more on this topic, check out Being Frugal in the blogroll). I have a few small amounts coming in and though I want to put them towards debt reduction, I feel confused about whether or not to instead get my hair cut and coloured, or to get some more professional, good quality clothes for work. Though I never question the value of what we are doing, sometimes I wonder why I have to always get so obsessional about things. Why can’t I just be happy putting $200 or $300 down on the car each week, and use the rest to build savings or even have a good time occasionally? I seem to be an all or nothing kind of girl though, and since its working for us at the moment, maybe I shouldn’t mess with it.

Allright, that’s enough rambling from me today…!

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2 Comments »

  1. Ugly Debty said

    I hear you about being an all or nothing person. If it’s any consolation I feel exactly the same.

  2. JvW said

    What a great milestone to achieve! Even though it’s not in the plans, it’s great to know that you COULD sell your car and pay off the loan and not worry about it. That gives you more financial freedom! Sounds like a milestone to me!

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