I’m serious about all of this taking yourself off the “credit grid” stuff.

So I’m going to let you in on a little experiment: Buying a new car with cash.

I work solely from home. My wife does about 80% of her work from home… so right now, we’re getting by with one car, a 5-year-old Chrysler Sebring.

For the most part, it’s no big deal. But occasionally, she needs to work at her office, which is about 10 miles away. If I need to take our daughter to ballet class go to the store, there’s some planning involved.

Plus, while the Sebring has relatively few miles, there’s always the chance that it will break down. Without a backup, that could turn into a major problem very quickly. Even a dead battery could screw up an afternoon.

Most importantly, my wife really wants a new car. After 11 years of marriage, I’ve learned that the easiest way to maintain peace around the house is to give her what she wants.

So we’ve concocted a plan that goes something like this:

Around the middle of November, dealerships start bringing in new inventory – in this case, the 2011 model year cars. This means that they need to get rid of the current model year cars. So they start dropping the prices. Or, more accurately, they start becoming more open to haggling / cajoling / idle threats.

2010 Honda Fit - Orange

So between now and November, we’re saving to buy a new car outright. We haven’t set our sights too high – we’re planning to buy a 2010 Honda Fit. It’s great on gas, and it should last for several years, since we drive less than 10,000 miles a year.

Oh, and it has to be orange.

Now, neither my wife nor I have the patience to drive a standard, so it has to have an automatic transmission. The add-ons for the Sport model aren’t enough to justify the extra cost, and paying a few thousand extra for GPS navigation would be silly… you can get a portable GPS system for a couple hundred bucks.

So we’re looking at a base model with an automatic transmission… which currently has an MSRP of about $15,700.

Come November, I plan to whittle that price down to about $13,500. Or make a car salesman cry. Or both.

Side note: I wouldn’t ordinarily buy a “new” car, because the depreciation is most severe during the first year. But the “end of year” discount should make up for this. Plus, Hondas hold their value better than, say, Hyundais or Fords.

Anyway, so far, we have $1,532 saved back for the new car. That might not seem like a lot, but we just decided on this plan a couple of weeks ago.

So $13,500, minus the $1500 we currently have put back for this project, leaves $12,000 we need to save in 4 months.  For the mathematically challenged among us, that’s $3,000 a month.

With household expenses (mortgage, insurance, credit card payments, utilities and food) of $3,500 a month, that means we need to bring in $6,500 a month after taxes.

Herein lies the beauty of entrepreneurship. I do business consulting, website work (SEO, content creation, marketing and a bit of design), and freelance writing. My wife does personal and business consulting. Plus, I have business ventures (including the one you’re looking at right now) that bring in passive income.

This all makes the goal possible. Granted, the next 4 months are going to suck, but having that power in your hands changes everything. If we succeed, it will be because of our own efforts. If we fail, it will be because of our own laziness.

I’ll be posting periodic progress reports as it occurs to me to do so. Maybe I’ll even get some cool thermometer graphic or something I can post and update as we go along.

Is there hope for the credit challenged through entrepreneurship? We gonna fin’ out.