Saturday, January 8, 2011

Livin' Like No One Else!!! The California Years

New reader?  Catch up with our Journey to Debt Freedom....

Before moving to the Monterey Peninsula, Chris and I made one very important decision:  We would live off of his income and my income would solely be used for the debt snowball. Being a military family & the fact that I am not a nurse or a teacher, we can never be 100% positive that I will have a job when we move to a new location.  I always try to find a job beforehand and, thankfully, it panned out beautifully for Monterey.

The cost of living on the Monterey Peninsula is fairly high & the military housing allowance reflects that fact.  Our first goal was to find a rental that would allow pets (3 dogs & 2 cats).  The second goal was to find a rental that would be at or below the housing allowance.  If we can cover our rent with the housing allowance, we have enough leftover from Chris's base pay to cover utilities.  The final goal was to hopefully find something  that would be convenient to the Naval Postgraduate School and whatever job I could find.

On our trip to the Monterey area to try & find housing, I also set up an interview with Animal Friends Rescue Project in between our appointments to view different rental properties.  To make a long story short (it was long, trust me), we found a rental house for the right price, the right needs, and the right location.  In fact, the location was COMPLETELY AWESOME!

The house:

One street away (we also had a partial view!):

I won't lie.  I took a lot of effort on our part to find a rental & a landlord that could work with us on the pets and the housing allowance.  The trick is to PLAN AHEAD!  We were slated to move in March, so we began our housing search in January.  We narrowed our selection down to two rental houses...but, really, one street from the bay for almost the same amount & less hassle about the animals?  There wasn't really any competition.

Shortly after returning to Washington, I received an offer from AFRP and gladly accepted.  With preparation, we had a place to live and I had a full-time job a month before we moved to California.  We also had mentally prepared ourselves to finally get out of debt.

We systematically began paying off our debt using the Debt Snowball method, as outlined by Dave Ramsey.  During this time, we took care of our last credit card, Chris's truck, our student loans, and finally my car.  It was an amazing feeling.  We bought a pop-up camper - with cash!  We took trips - with cash! We paid for my car repairs that seemed to be necessary every 2 months - with cash!  We really felt free.  Well, until we started adding up how much we had been spending on my car, even though it was - with cash!

Basically, my little red Alero had been run into the ground by driving up & down both coasts & cross-country.  She was past her prime due to, well, a hard life.  Almost every 2 months, we were spending close to $500 in repairs alone.  The car wasn't a lemon or anything like were just finally wearing out on an ongoing basis.  It was annoying at best but as the time for our next move loomed closer, the temptation of a new car started to rear it's ugly little head.

Well, as the temptation started to grow, Chris & I started coming up with all kinds of wonderful excuses as to why I "needed" a new car.  Chris was concerned that my Alero wouldn't be safe to drive cross-country again. It would also be a good idea to have something strong enough to tow the camper and big enough to hold the animals (now 3 dogs & 3 cats, thanks to a semi-feral kitten that no one wanted) if something were to happen to Chris's truck.  Gas in California hit $4/gallon, so I started thinking about how smart it would be to get a hybrid suv and started to do research.

We weren't in a hurry to buy - we still had a few months before we would get orders.  Also, because I'm frugal, I didn't want a hybrid that was fully loaded with all the bells & whistles.  To make another long story short, comparing hybrid SUV specs led us to conclude that the Toyota Highlander Hybrid was our best option but we didn't really care for how the older models looked.  Lucky for us (sarcasm), the 2008 model was a complete redesign and looked great.  Even luckier?  They had one with exactly the specifications I was looking for on the property.

Yeah, I left that day with a brand spanking new 2008 Toyota Highlander Hybrid.  I love my Highlander and it has been handy but I almost threw up (literally) when it hit me that we had just put ourselves back into debt for over $40,000.  I was sweating & crying.  I wish I could say that is an over-exaggeration, but that is how much it physically and mentally affects me to owe money.  We had just traded freedom for a shiny toy.  It would have made much more sense to buy a used Explorer, or other similar SUV, with cash and remained debt-free.  Hindsight is 20/20, eh?

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