The Great Experiment & 30 Days of Thanks
Today, Occupy Wall Street called on borrowers to stop repaying their student loans. The All Things Considered story that I heard this evening seemed so timely, as we just spent the entire weekend once again going over our budget with a fine-tooth comb, most specifically to discuss what to do about our student loans.
I’ve mentioned before that, though we’ve never carried a credit card balance, we are currently buried in a lot of student loan debt. Between our three degrees, we have loans which, even at minimum payments, total 15% of our monthly budget — the only things we spend more money on are rent and taxes. It’s a lot of money to watch leave our bank account.
With the exception of seven months after Nora’s birth, we have never had two incomes (first I worked while Chris did culinary school, now he’s working while I stay home with Nora). Only having one income means the amount we pay each month toward our student loans is a pretty big deal.
We are working our hardest to get rid of the loans as fast as possible and have already paid off just shy of $20,000. (Hooray!) Like anyone, we have our moments of weakness, but we try very, very hard to budget and save every penny to make extra principle payments as often as possible. In the last few weeks, however, I have gotten especially frustrated with the slow pace. Now that I don’t have reliable income coming in, we’re back to only paying for the basics:There’s no fun money, no eating out (for real, I don’t even have money to tip a waiter at The Brotherhood anymore), but most annoyingly, there’s no extra money to put toward debt. If the websites stay steady, then those things become possible, but if not I may have to start babysitting again. …Or we have to figure something else out.
For about 20 minutes last week, I almost applied for a job. One of the local non-profits was hiring an office manager and the advertised salary was not too much less than what I made in New York. I knew I could have done the job and, being the person that I am, I probably could have enjoyed it. I almost talked myself into thinking how much Nora might like playing at daycare a couple of afternoons per week. But then, I though about that time I would be losing with her, and I thought, most especially, about the time I would be losing with Chris.
When I was working in New York, Chris and I were like ships passing in the night. We were on completely opposite schedules; we rarely shared a day off or even an evening together. It was so incredibly hard. Since I quit my job, we’re all able to live on restaurant time (not just Chris), which means we get to see so much more of each other. Nora spends her days with either Chris or me or both of us, and is thriving. If I were to go back to work, we would lose that. We would lose each other. We would lose a good deal of our relaxation. We would be even further away from cleanliness and a put-together house than we are now.
One of the things I hear over and over is how hard it is to make having one parent at home work. People constantly say that in this economy and this day-in-age it’s “impossible” to have a family on only one income, or that people who can do so are privileged or wealthy or lucky.
Certainly, there are many income levels below us that would make living on one income impossible, or much less desirable as far as quality of life. But I don’t believe it’s as hard to do as people say it is. We are not wealthy or extraordinarily lucky, we just decided that this is a priority and so we make it work. I think if you’re willing to make sacrifices, if you’re willing to value experiences and time with your child over material things, then most families can afford to have a parent at home.
It is so easy to fall into the money trap. To start thinking, boy if I just had $20,000, or $30,000 or XXX more, I could do… I know, that’s what I did last week. I looked at that job and for a moment, all I thought about was the money. Just one year, I thought, One year of us living like we’re living but with extra income and I could almost pay everything off. On the surface, it seems like a no-brainer, but the more I thought about it, the more I realized I wasn’t willing to sacrifice my family and my limited time with Nora, and Chris was in agreement.
I knew I wasn’t going to suddenly add a significant amount of income, but seeing that job still rekindled the get-out-of-debt fires, and so this past weekend, all I did was number crunch. There’s not much more we can shave off our budget. We were lucky to find our current house which is below the market rent because it’s technically a one bedroom; we aren’t exactly chomping at the bit to live somewhere smaller. We’ve already cut most discretionary spending. Then suddenly it occurred to me that there is one area where we can make a big financial change:
The car. I realized that if we sold our car, we would have about $500 extra to put towards loans each month, and an immediate payment of several thousand because the car is worth more than what we owe on it. So I floated the idea by Chris: what if we get rid of our car?
He thought I was nuts. How can we live without a car? What about winter? What if we want to move someday? And most importantly, we can afford it, so why wouldn’t we have it? But we talked and talked and talked, and eventually the idea didn’t sound crazy anymore. We live less than a mile from everything. We’re already used to walking in every kind of weather. We have bicycles and a trailer for Nora or cargo. We’re already into simple living. So we’re thinking about it, and we’re doing a little experiment:
Starting yesterday and for the next month until we leave the island for Christmas, we won’t be using the car at all (with the one exception of going to the landfill). If this month-long no-car experiment goes well, then we’ll get serious about trying to sell it in the New Year.
I’m looking forward to the challenge and seeing how it goes. Chris is on the fence, but agreed to try. The other two members of our family might be the most excited, since walks and stroller rides are about their favorite things right now.
Today, I’m thankful for the fact that we are making keeping me at home work. I’m thankful that Chris was willing to consider my somewhat radical no-car idea, and I’m thankful that the first two days of the experiment went well.
Readers: Would/could you get rid of your car? Am I crazy? Do you think we’ll make it through November with our breaking down and driving? I’d love to hear what you think!
I am very empathetic about your financial situation with your little family. I can see by reading your daily blog and past entries you are a very bright, hard-working young lady who has a great desire to stay at home with her child, and works hard to make that possible with her equally understanding and loving husband. I too, was fortunate to have that happen with my two girls. You’ve done far more than I did at your age. Everyone’s circumstances and desires are different. Everyday in your blog, I see your love for your present life circumstances though like all of us, you mention the difficulties of life–the lack of money. Ever since you stopped babysitting, you’ve kept busy with many projects, but your love of your “free time” has shone in your blog. And you probably want another child. Not having a car might be great financially in the short run, but it’s hard not knowing what might happen in the future that would require you to need that transportation, which for many people is a necessity for income. What if Chris should lose his job (heaven forbid), and you need the car to maintain your income? Like you say, with the experiment, your present geographical circumstances don’t necessitate needing a vehicle, but who knows what may happen six months from now, or a year. My family would be doomed without a vehicle to get to work, and come to think of it, I’ve never known anyone who hasn’t required a vehicle for income. I’ve read of people biking to work (lucky them!), and people in major urban cities (New York, San Francisco) who don’t even have room for a car (lucky them!) or rent one when needed, but they aren’t the norm. Presently, my 20-year-old daughter doesn’t need a car while at college close by, but boy does she grab one of ours if it’s available, and she is trapped without the means to earn a higher salary in the summer. She manages, though she doesn’t have a husband or child who depend on her. And if you should require a vehicle in the future, would you have the funds to buy one? As I mentioned in a past blog, it would be great if you could market your web-making business more (I don’t know how much income it brings for you, but you seem to love doing it at home), or you could baby-sit like I did, bringing my children along, when required. It was a lot of fun for me and them!, though it produced little income it made me feel better knowing I was doing something. The job opportunity you mentioned (a couple days/week or more(?)) seems great for the income it would bring in, but only you can decide. You are a very enterprising young woman thinking hard about future goals for yourself and your family. Who knows, Chris might get a big raise! Good luck with your options–you’ve put a lot of thought and hard effort in working towards what you want and have achieved. I wish you the best in Nantucket. Have a wonderful Thanksgiving!
Have you contacted the lender about re-configuring your payments? You may be able to lower the amount owed each month in exchange for lengthening the term. In my view I would pay off the car and try to reduce your insurance premium before paying off the student loan as at least the interest is tax deductible – it’s not a totally bad loan to have. I’m in the camp of keeping the car – esp. as you live in a place where you have several months of cold/wet weather. Not only could regular tasks get cumbersome but you’d have to factor in the fact that you would be more inclined to take a taxi – and that will cost $$. You’d also have to make sure that you have enough $$ saved so that if you need a car you can easily go and get one. Good luck with whatever choice you make!
ah, so many similarities. i wonder if you ever plan on returning to your career? sometimes i feel like i have to keep my job only to pay off my student loans. a bit of a catch 22. 😉 had i known then what i know now…..
sounds to me like you are in a pretty good position to ditch the car. there probably are not any car sharing programs where you live, i suppose? that would be ideal.
but even factoring in the occasional rental car and taxi, you would still be coming in at a lot less money. at the least i would consider selling the car and:
a) putting aside some money in case you change your mind and need to buy one again.
b) buy a cheap-o car outright for those occasions when you really need wheels.
but i think you will learn a lot from the trial, especially since it is during winter!
Thank you all for the thoughtful comments! It’s always helpful to get a third-person’s perspective and I love that I’m able to do so through my blog.
Donna, the possibility of Chris losing his job is certainly something that would impact our need for a car, however in that scenario, I’m not sure whether we would even be able to keep the car, because we wouldn’t be able to make payments on it. If Chris were to lose his job, we have just enough money saved to get us back to our family in Texas. We would most certainly need a car (or two) there, but I’m not sure that we would be able to keep the CRV. We’re trying to follow Dave Ramsey’s plan so we have a bare minimum in savings. Luckily Chris’ job seems very stable!
Laura, we wouldn’t want to lower the payments/lengthen the term just to have extra money to put toward another loan. Our goal is to get out of debt as soon as possible so we will have more financial freedom than we currently have and will be able to, finally, start saving for a house. We’re attacking our loans in a “snowball” approach, paying them off from smallest to largest, then applying the minimum payment of the one we payed off to the next one in line. The car is the largest loan, so it would be the last to go under this approach. Even if we paid them off in order of interest rate, the car would be somewhere in the middle since we have some student loans with 10% interest rates. I don’t think that a taxi is a huge risk. I doubt we would ever taken one frequently enough to make up for the what we’d be saving on the car, and I’m really stubborn — last year I walked to the grocery store in sleet because Chris had the car at work and I really needed to go. I figure if I didn’t call a cab then…I don’t know when I would. 🙂
Jamie, I originally thought I would return to my career. Most especially because working at a private college meant my children could go there for free…what a huge gift for Nora, right? But now I’m not so sure. If we can, I’d love to live on Nantucket forever; staying here would remove any possibility of working for a college, especially because I’m no longer interested in traveling. Also, I would very much like to see Papoose become a reality someday, and there’s the hope that I can continue to build upon my freelance web design work. If I do go back to a job where I’m not my own boss, I have no idea what it would be.
you could always get a motorcycle/mo-ped/vespa : ) but you live on a tiny island, so I think you’ll be fine. Matt and I paid off both of our cars and i love the idea of selling one and getting some other form of transportation for around town. the down side is Sherman is larger and very spread out with giant highways….. I think teleporting is the best option for us.