Paid Off My Car, Feeling Great
As the title suggests, I paid off my car recently. The last payment of $1,852.00 has cleared through the system and is in the hands of Toyota Financial. It took them a bit longer to process than my ussual payments but I guess that can be expected.
I’m feeling great. Getting rid of debt once and for all is an invigorating event. I feel very proud that I have made it this far and stuck to my frugal guns to make this day happen. Lets make a rundown of how this affects my financial life from here on out.
One Less Bill to Pay
I’m going to type that again, because it feels so good. One less bill to pay. I can officially delete two rows out of my budget spreadsheet (The payment in my expenses worksheet and the total in the liability sheet). One less bill to pay means less stress and more peace of mind. It is the unlocking of money that can now build my net worth month in and month out. That is financial power.
Lower Emergency Fund
While I do not have my emergency fund fully funded yet, the requirement of that fund is now lower and easier to reach. If I aim for three months savings, then the goal just dropped by $750. If I wanted six months, then the total savings would be double that or $1,500. That is significant change that can be put to better use elsewhere, like debt reduction or wealth building.
More Fuel for the Debt Snowball
I now have $250 extra each month to put towards other debts. First in line would be my wife’s car payment. The best part is that if we commit to it, we can easily pay off her car by next month. Within two months of our getting married, we will have paid off both of our cars.
And after that we can start making a few choices. For me, it may make sense to start sending $500 payments to my student loans just until the balance comes down to where the interest is not killing me as much each month. After that, the house fund gets priority. We are adamant about owning our own home in the near future and need to be sure we will have a 20% down payment to buy one.
A Promise for the Future
I will never have another car payment so long as I live. I like my little Corrola. I often joke in my monthly reviews about my Corvette fund. If I ever do get another car or that coveted Corvette it will be paid in full before leaving the dealership. I don’t want to ever have to make a payment for a car again. That is a promise to myself that am happy to keep.