One of the goals for this year was to get our car paid off in full. Towards end of last year, we realized we were so close to having our car paid off that if we could squeeze out a few extra payments over a 6-month period, we could potentially save a few hundred dollars in interest. Paying off the car early would also help us boost our savings account since we’d have an extra $322 a month left over that was originally set aside for car payments but could soon be applied towards our saving account instead.
I’m glad to say that we’re $378 shy of meeting our goal and will be completely car-loan-free by February 10th. Yahoo!
How did we do it? Last October, our stocks just weren’t doing so great. We didn’t have a ton of money invested, but what money we did have either wasn’t making much or was beginning to decline in value. Instead of watching them languish in the topsy-turvy market, we decided to cash them out after a slight gain and apply a hefty amount towards our car loan.
The amount we applied towards the car was equal to almost 5 car payments – that’s a big chunk paid off the loan. I was able to also apply an extra $500 payment last November (close to one and a half car payments). Then again, at the end of December, we realized we had some money in savings that we could apply towards our car and still have a comfortable amount left over for emergencies. That equated to the equivalent of 3 car payments. Since I was still auto-debited each month for our car payments, the extra payments we made were on top of our scheduled payments.
Instead of having the car paid off in November of this year, we’ll have it paid off in February – 9 months early! If I stay dedicated to my savings plan, I should be able to increase my savings by almost $3,000 by applying the car payment amount towards savings each month. I’m also saving approximately $200 in interest off the car loan as well. I should soon see my savings bar grow!
Having a financial plan and seeing it work is a terrific feeling, especially so early in the year.
How are your plans and long-term goals going?