The One Where They Pay Off A Car
Now does the title make sense?
This morning, I paid off my 2008 Mazda3 about 9 months early. I wasn’t planning on it. But paying off the car significantly reduced my debt to income ratio, which is more important to lenders than your total debt, the number I have been fixating on. I had to drain all of my savings, and I’m also a little worried I won’t have enough money for rent on Monday, but I always scrape together enough to pay all of my obligations (I was saying I wanted my debt repayment to be a little harder and I definitely made that true this week). The savings was just sitting there earning a low interest while my car was costing me much more in interest charges. So I just went for it. I now have $270 per month less in minimum debt payments, and that money will go straight into paying off my highest interest credit card. And having an improved credit score and financial profile brings me that much closer to my dreams of being a business owner and real estate owner. My banker even told me that I would probably prequalify to buy something under $250K, but we all know I am not prepared for that, especially without a 20% down payment and another $5K for all of the incrementals that come after buying a place. But I’ve continued with putting money into savings automatically as well as large chunks from my side businesses. Doing a payoff like the car had a big impact on my situation (and mentally I feel all kinds of giddy thinking I don’t have a car payment this month), so I’ll continue to save but regularly use chunks of that money ($500 increments) to go towards debt. I’m still doing irregular debt updates, so here it is:
Total Remaining Debt: $23,068
Next week I am going to post exactly how much interest I paid over the life of the loan (4 years and 3 months) and some of the costs of owning the car. I love cost breakdowns!
Have you made any unexpected big moves lately? Let me know and have a great weekend!
Congratulations! It’s always a great feeling to to pay something off and have extra money to use for other things. Once you have time to calculate the interest I’m sure you will be surprised how much you actually spent on interest alone. Another note, You said that you are not quite ready to buy a house, but he should seriously taken a look at doing that. There are some great tax benefits, not to mention you will be investing in your future and not paying someone else. I know it’s a big step, but well worth it in my opinion to grow your wealth.
This great to hear!! I remember taking a big chunk of my savings and paying off a student loan the other year. At the time I was nervous in doing so but once I did it, I felt great. No longer getting that bill in the mail added to that feeling as did being able to save the monthly payment going forward.
Keep up the great work!!
Congrats on paying off your car! I hope it pays off in the long run by doing that!
That is fantastic!! Congratulations!! Have a great weekend
Woohoo! That’s awesome! Have a fantastic weekend
Congratulations on paying off the car and getting that step closer to being a business owner!
[...] to take it with me, so I have a buddy to help keep me motivated. Speaking of motivation, this week, she paid off her car! There really is nothing like the feeling you get when you pay off a major debt. Congrats, my [...]
I love cost breakdowns too! I paid off my car loan early back in the spring, even though it didn’t save me all that much in interest – it was worth it to eliminate the monthly expense and just to feel that surge of pride whenever I accomplish a financial goal! Congrats to you!
Congratulations! Sometimes you just have to go for it.
The title totally makes sense…
Congrats on paying off the car!
Good! I think you’re the only one who got it!
I like how you “risked it” to pay off the car now. It’s funny. A personal coach I hired for a while told me that when I do things like that (in her words) “the universe finds a way to make it work.” That was the first thing I thought of when I read about your car. Congrats on one less loan payment!
Good work. Getting rid of a payment on a depreciating asset is always a smart move!
[...] Your Car on the Private Market at Money Under 30 Professional Indemnity Insurance at Modest Money The One Where They Pay Off The Car at American Debt Project Are Savers Financial Losers at Broke Ass Mommy Save Money on Back to [...]
Congratulations on paying off your car. I wish I could pay off my house. It’s depressing to see how much of the mortgage goes to interest every month
[...] American Debt Project recently paid her car off…stop by and give her a congrats, and learn a thing or two. [...]