"Any society that would give up a little liberty to gain a little security will deserve neither and lose both." ~ Benjamin Franklin

A Paid Off Geo vs. A Jeep Loan: An Analogy

>> Tuesday, January 29, 2008

I’ve been deeply in debt and I’ve been debt free. Being debt free was much, much better. Of course, that was after I had sold my house to move to Iowa. I made money on it and paid of absolutely everything. It was an incredible feeling.

Since I have become more aware of the economy it scares me to see all the ads on TV and in the mail for credit cards, pay day loans and consolidations. I know just how easy it is to fall for those…

When I was younger my goal was to own a Jeep Wrangler. Unfortunately I was self employed and had no credit to speak of. So I decided to buy a mini version of what I wanted- a Geo Tracker- and pay it down quickly so I could build the credit I needed for what I really wanted.

And that was just what I did. I had that sucker paid off in 9 months and traded it immediately on my dream vehicle. Of course, that took me from a fully paid off vehicle into another auto loan. Not entirely brilliant, I know. And it just enforced the thought that owing money is a way of life, which got me into trouble later on.

Now, I know that there are times that loans are a necessity- like when you buy a home or need small business loans to get a business started. It’s just important to know the difference between a need and a want. It’s those wants that get you in trouble.

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