Why I Made an Egregious Mistake
By Ryan Healy | October 19, 2007
After reading Part 6 of my story, Anonymous Reader writes: “I can’t believe after all you went through, you didn’t learn your lesson. [...] What are you going to do about this egregious lapse of reason?”
It’s an excellent question, even if it is a bit hard for me to swallow. But before I begin telling you what I plan to do (a topic for later posts), let’s examine why I made such an “egregious” mistake–namely, adding about $47,000 to my total debt load in a single year. (If you don’t know what I’m talking about, read my story starting here.)
As I tried to explain, one reason I went into more debt was greed. I let my desires get the best of me. Just because I was moving in the right direction (paying off debt) doesn’t mean I was no longer subject to emotion and the lapses in judgment it causes.
Here was my reasoning for buying my motorcycle.
1. My dad already has a motorcycle. It would be fun to go riding with him.
2. My dad is in his 50s. Won’t be long until he’s over 60. If I wait too long to get a motorcycle, I might not get to ride with him.
3. Hmmm… what motorcycle do I want? Safety is a priority, and BMW is the only company that builds motorcycles with ABS breaks–very important in Colorado where there’s frequently gravel on the roads.
4. Which model do I want? Well, that BMW K 1200 R is pretty sweet. Oh, 163 horsepower should do.
5. But no. I can’t. I don’t have the money for it and I don’t want the debt.
6. (Months pass. Then…) A special financing deal? That’s cheap money. It will hardly cost me anything to borrow that money. Why the heck not? After all, I deserve it.
That, in a nutshell, is the thought process I went through. And that’s why I road a brand new BMW motorcycle to my house in December 2006.
Could I have gotten a less expensive motorcycle? Absolutely. Was it right to go into so much debt over a “boy toy?” No. But I did it anyway. I share my thought process with you so you can see how easy it is to justify expenses when we want to.
Now, the minivan.
As I already mentioned, my wife became pregnant in February 2007. She is due in two weeks… about November 4. When we found out she was pregnant, we knew we’d have to get a larger vehicle.
We had turned in a leased vehicle and we had a 2001 Hyundai Elantra. We still own the Elantra. It is paid for. The problem is, it is impossible to fit three car seats side-by-side in the back seat. You just can’t do it.
So we knew we’d need a bigger vehicle, probably a minivan. We knew we wanted a Honda Odyssey or a Toyota Sienna simply for reliability reasons. We looked at a few used options, but they were for the most part badly abused.
And with Honda Odysseys in particular, it seemed they didn’t depreciate much. You could buy a used one with 35,000 miles on it for $26,900… or a brand new one with zero miles for $31,000. Would I pay $4,000 for an extra 35,000 miles worth of engine wear and tear? Yes, I would. And I did.
Again, could I have purchased an older minivan for $15,000 or less? Absolutely. But I didn’t.
I’m not trying to justify my behavior or my actions. I’m only sharing the thought processes I went through. Perhaps you can relate to them. Perhaps you have used similar lines of reasoning to justify your own credit purchases.
Anyway, the decisions have been made and my financial situation is what it is. It may be a let down reading Part 6 of my story after reading Parts 1-5. But what would a story be without a little drama, right?
So, I now have some decisions to make. As Anonymous Reader asked so well… “What are you going to do?”
Of course, I’ve considered many different courses of action. But I haven’t arrived at anything concrete yet. There is pain involved in making these decisions, which makes it difficult to take action.
If you were in my shoes, dear reader, what would you do? Please leave a comment and let me know your thoughts.
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10 Responses to “Why I Made an Egregious Mistake”
Comments
« The Story, Part 6 | Home | You Can’t Give What You Don’t Have »
October 19th, 2007 at 1:56 pm
Well, I will confess that I haven’t read your whole story yet. I plan on getting to that soon.
I think we all make bad financial decisions from time to time. You learn from them, and you move on. It’s pointless to beat yourself up over them, so I definitely wouldn’t go down the “what if” road if I were you.
What I would do is sit down with my spouse, make up a good budget that we both agree on, and get the debt paid off as quickly as possible.
October 19th, 2007 at 3:34 pm
The thing about debt, loans and all that is that it’s not all black and white. There’s a lot of grey areas.
Sure, maybe the motorcycle was a black area… though your angle with your Dad did whiten it up a little (hence grey…). Other things are clearly black and white… e.g. golf memberships, vacations, … but even then, the mind knows how to make them grey… (e.g. golf is a great way to get vitamin D or else I’ll get cancer, without a vacation I’ll die from a heart attack and will leave my family homeless)…
But, first things first, AVOID all black areas, mercilessly without emotion or adding any white to the palette.
John
htto://www.realitycopywriting.com
October 21st, 2007 at 7:17 am
What would I do?
Sell the bike.
And (all of this depends on your income really, because if you could can pay the minivan off in less than 18 months just keep it). otherwise. Sell the minivan too and get a cheap family vehicle.
October 21st, 2007 at 10:28 am
Have you thought of getting rid of the motorcycle? I understand you want to ride/have fun/spend time with your Dad but you can do that too for way less money if you just think outside the box.
You can use the Elantra while your wife and kids can use the minivan. By getting rid of the motorcycle, you’ll wipe off $15K in debt. Just a thought.
October 21st, 2007 at 9:46 pm
After looking at the pic of the bike… I would say its worth buying…to enjoy the sheer power. What you call as a lapse of judgement i would call it as a loss of focus.. anyways… the reason you mentioned (greed) is a perfectly valid one… but i do not agree with the other reson that you wnated to ride with you dad… there are other ways to do and even other bikes to do that…
From my reasoning if you just think how many times are you going to ride that bike of your with or without your dad…(say in the next ten years) not much especially when you are already having two four wheelers.
October 23rd, 2007 at 8:46 am
I have considered selling the bike. It is probably what I will do first. It’s painful to sell. But it’s painful keeping the debt.
Since it’s the start of cold weather in Colorado, it may be hard to sell. On the flip side, you can’t find my bike used anywhere. There may be one used K 1200 R in all of Colorado. So that’s good…
October 24th, 2007 at 11:02 am
My husband and I too have motorcycles, both paid for. I don’t ride mine much. In fact I only rode it twice all summer and winter is coming fast to my neck of the woods too. I’ve often thought about selling the bike to eliminate a large amount of my debt and yet I just can’t do it. I like riding my bike and I’m not ready to give that up just so that I can pay the debt off faster. It’s not worth it to me. Hopefully you and your wife can decide what is best for your situation.
October 24th, 2007 at 12:47 pm
Cynthia - Thanks for sharing your perspective. It’s hard to part with anything we develop an emotional attachment with… even if it is just a material possession.
November 1st, 2007 at 9:48 pm
Sell the bike! You have three little kiddos who need their daddy at home safe every night. Bikes are too dangerous. In my book this is an item you can’t afford and I don’t just mean because of the debt. You can find another outlet for togetherness with your dad. Selling the bike puts you in league with strong men who give up their wants to put the needs of their family first. You can do it. Your family will be stronger for it too.
November 2nd, 2007 at 8:04 am
Mary - Thank you for your advice and encouragement. Riding a motorcycle isn’t the safest activity in the world. ;-)