Financial Roller Coaster with Emotional Payout

August 11, 2003

Several years ago, just after we were married, Michele and I tackled our revolving debt by using Consumer Credit Counseling Service. It was emotionally painful to realize that our debt was controlling us rather than us controlling our debt. In less than 3 years we had completely eliminated all of our credit card debt. To this day, we haven't acquired a new credit card and that feels very good.

We went into business for ourselves full time in October of 2000. Like many small businesses we have struggled and suffered some setbacks. We weren't prepared for our tax debt and have had to negotiate a payment agreement with the IRS. This has been a bitter pill to swallow, especially after getting our personal finances in such good order. For the past couple of months we have been struggling with how best to lighten our load and address our responsibilities.

Oddly enough the best answer involves getting a different car. One of our two current cars is leased, and neither of us is happy with or likes that car anymore. The lease is draconian in its exit terms and we feel trapped by it every time we see it. Our other car is fine, but we've had the same model vehicle for over 10 years now and we want something different. By trading in our two cars for one very good used one we can save money each month, and halve our annual insurance bill. We are also going to refinance our home for a longer term, again reducing our monthly outgo and eliminating a junior mortgage. With the reduction in our monthly debt we'll be able to get a new junior mortgage to pay off the tax debt immediately. We'll still have to pay the money back, but on our terms (and at a better rate) instead of the IRS's.

Financially these changes will save us money over time. The initial cost of these transactions is a little more than we would like, but we'll make that up in short order as our monthly expenses will be less. Neither of us is comfortable with scrutiny by strangers these kinds of financial transactions bring, but the result is very worthwhile to us.

We eliminate a car neither of us is happy with, and get out of the usury lease that ties us to it. We reduce our monthly car and house payments. We complete our obligation to the IRS ahead of time and for far less money. We will still have debt but it will be structured to our liking, which takes very good care of us. And we will have a car that is pleasing to both of us, emotional icing on our financial cake.

Best of all, we are taking control of our lives again. Because we are human we allowed the negative feelings that occurred when our business suffered to control how we approached our finances for a time. Instead of dealing with the pain of change we have suffered a lingering malaise that threatens to impact our lives emotionally and financially for a long time. In taking these steps we reaffirm our control over our lives. We stand up and take responsibility for past decisions, positive and negative, and in taking that responsibility we gain freedom. We regain a positive outlook on our situation, and with that outlook and new sense of energy and spirit that will positively impact our lives for years to come.

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Mark H. Nichols

I am a husband, cellist, code prole, nerd, technologist, and all around good guy living and working in fly-over country. You should follow me on Twitter.