We all dream of financial freedom right?
Bills, bills, and more bills will always continue to pile up…need a new car? Take out a loan…buying a house? Take out a loan…going to school? Take out a MASSIVE LOAN! I hate debt, I always have, and in many cases if I can refuse to have it? I will…even if that means living less luxury.
So you have a car loan, cool….a lot of us do….the thing is though is that I paid my 5 year loan in 2 years. Anytime I mention this to people, I get ‘HOW DO YOU DO THAT?!’ and ‘MAN, I WISH THAT COULD BE ME!’
Well it can, you just have to think reasonably and financially…so here is what I did….now I 10000% understand this worked for me, it MAY NOT work for you, everyone has different ways, money, obligations…so what worked for me, may not work for you.
- Don’t buy a vehicle you know you can’t afford.
I bought a 2018 Ford Escape in 2020 with 30,000 miles…it wasn’t new, didn’t have a remote starter, tires were a bit old, and maybe some paint chips here and there which I got fixed on the negotiation of the sale. Do you WANT A NEW CAR? YES! Do you NEED A NEW CAR? Nooooooooo…if you can afford a new car? Then by all means that’s up to you, but understand that the moment you drive that car off the lot? It’s already depreciated in value…shop around, try things out…cause like college textbooks back in the day? The next year model doesn’t really change much, and you’re paying WAY more.
- Side hustle.
I’ve said this one many times in previous posts…but there is money out there for you to earn on the side that you could throw STRAIGHT onto your loan. Online surveys, weekend job, UBER, Doordash, etc….
- Stop buying s*** you don’t need.
This is probably my biggest one…and you could put this on many parts of your life. OH MAN, the new ANDROID OR iPHONE IS OUT…I NEEEEEEED IT!!! No, you don’t….your phone still on the internet? Take photos? Send phone calls? Then you don’t need it….why tack on the extra bill for 1 extra megapixel on your phone? Take out food, drive thru coffee, new video game console, etc….many of the things you own now? Are 100% fine. I have wanted a new TV for quite some time and have had the same on for 10 years (1080p, 3D, yadda yadda) and guess what? Still looks good…I’ll get 4K eventually, but again, I don’t need it. Take that $1000+ from that new phone/TV/ect, put it on your loan…pay it off….THEN look at this fancy 4K TV, or better yet? Save it for the repairs you’ll have to do eventually to that car.
A latte’ from a coffee shop, roughly $4? How about buy beans from your favorite coffee shop for maybe $14, and make it at home. Here is some math…5 days a week (no weekends) times $4 cup of coffee per day = $20…4 weeks per month, 5 days a week….that is $80 a month in brown caffeinated water. Yea, make your coffee at home.
- Be aggressive about paying it off.
Pay your monthly, but whatever extra money you have? Throw it on the loan….$5, $10, $50….whatever, every single dollar counts my friend! It may not seem like a lot right now, but it’s sure as hell better than paying RENT on your loan (aka interest). Remember that coffee math I just showed you? I think you can do that math there.
- Get a loan that you can afford, and put down a nice down payment.
I took a 5 year, but I knew that I was gonna pay it off much quicker than that. But, life happens…and you need to prepare for basically anything to happen. So don’t trap yourself in a payment that you can’t afford…my base payment was $174 per month, but I know I could afford $200 per month AND toss an extra payment on it on my next paycheck. Here’s where people get into trouble…
I easily could have purchased a newer car for a higher payment like $220 per month right? I could afford it so why not?!? Base payment was $174 for that loan…that is $46 extra per month. $46 times 12 months = $552!!! That’s 3 months of payments BEFORE interest! Don’t let the fancy bells and whistles distract you, it’s a car…a hunk of steel with wheels.
I COULD HAVE taken a much shorter loan with smaller interest, but I had to be prepared for anything like unexpected repairs to house, wife needs new tires, etc….and guess what? It did…I had to buy 8 new tires for the cars, but I didn’t fret (too much…), cause I knew that I had a plan going into this loan. The only thing I lost? I wasn’t able to pay off the loan quicker cause I had to fork over $1000 for tires!
In conclusion….
I’m not Dave Ramsey….I’m not gonna tell you to sell your car, house, etc….cause for many that’s not reality. I’m also not a financial expert AT ALL, I didn’t go to school for financial stuff….I’m just a guy who doesn’t like debt and refuses to be controlled by banks and loans. If I want to take my kids to Disney World, I don’t want to think about my car loan that I had to default on cause I spent too much on the new TV and Xbox….that’s unneeded stress I care not to have for me and my family.
Trust me, there is a way to pay off your crap….you just gotta get off your butt and do it. It’s not easy, trust me I know….all it takes is discipline, a goal, and the ability to say NO to yourself.
You’ll get there friend, but you can get there quicker if you work harder.
