Today has been a great day for me. I decided to go the root of paying the remaining balance on my car from my savings account.
for the last few years, I have been nearly paying $300 dollars monthly for my car and it was beginning to irritate me knowing that such a large expense was being regularly deducted from my account.
I mentally struggled on what I was going to do between keeping my savings or paying off my car. It all came down to interest rates. I simply just saved $70 this year by paying off the balance. The interest I was being charged for my car loan was close to 4% higher than interest I was making on my savings account. No matter how small the amount saved, it was the deciding factor for me.
I am glad to say that moving forward, I have just created more options for myself by freeing another $300 a month. I believe that I will benefit the most for paying off my car in these 3 ways:
- The greatest way I can see myself benefiting is by making my second, night shift job expendable. I will be giving my notice any day now and will slightly reduce my slavery to the work force
- Secondly, I can use the extra money to repay my savings account and rebuild the balance or pay off the remaining debt I have left.
- Finally, I will free up some money to donate to charities and start helping out. I am still currently researching what will be the best charity to donate to.
As of now I only have $1,900 remaining in debt which is the balance on my line of credit. I expect this to be paid off in full within the next few months. This will be easier as my expenses are now lower then they were a few months ago when I had close to $8,000 in debt.
I do not think I will ever finance another car again as it becomes a financial and mental strain as time progresses. Sure it is really nice to have a new car but my next approach is going to be to purchase a very slightly used car(maybe 1 -2 years old) and paid in full. In time, I plan to make monthly payments to my high interest savings account to mimic a car payment. Once I have generated enough money, only then will I purchase another car.