A few days ago I received an email from Citizens Bank notifying me that I’ve paid the final payment on the loan for my iPhone. The monthly expense of roughly $60 is off the books, and now I am free to spend that money somewhere else - just kidding; maybe. Indeed the notification was a nice boost to the happiness meter: it feels great to pay off debt and no longer owe anything. I had forgotten what that feels like, because what I’ve done during my whole adult life thus far is borrow money from the bank to finance a car. Even during the brief year after I sold the Mazda MX-5 and therefore completely debt free, I was saving up in preparation to buy the 911 GT3, which obviously required much additional borrowing.
The lesson here is that while it is tremendous to not have debt, I can’t seem to hang onto that feeling because I love cars way too much. The likelihood is high that after I pay off the GT3, I’ll go spend that chunk of money on another car. It’s not like I can afford to buy a house around these parts anyways; what’s the point of working hard to earn money if you don’t spend it on something you like? For me that just so happen to be cars; I’m sure for some of you, your thing must cost significantly less, and for that I congratulate you.
That email saying I’ve paid off my phone did prompt me to take a brief look at the books for the GT3, and turns out I’ve got about an average new car transaction price’s worth of payments left to go on that car. In the grand scheme of things I consider myself lucky to owe only that much on what was a six-figure transaction a year and a half ago; while the GT3 is an extravagant purchase to the relative extreme, I made sure to not extend myself by borrowing way too much, (and thus have an unsustainably high monthly payment) and with a ridiculously long loan term. I’m right on schedule to pay the car off in five years from the original purchase date, which is exactly how I planned it.
However, with interest rates so low, I can afford to be flexible. It wouldn’t cost anything to refinance the loan, extending the term and have a lower interest rate. I would then have a lower monthly payment, freeing up some money should I need to do something with it, like move out of a house and rent a spot. Of course, none of that is necessary nor possible until this whole COVID thing subsides. Keeping debt manageable and having cash in reserves is a great position that I am fortunate to be in.
My reason for treason.