My amazing friend Elle is guest posting today to share her family’s incredible story of how they got rid of their car loan! Her new book,Jumpstart Your Marriage and Your Moneyjust came out so make sure you check it out!
One ofthebest moves we made as a couple was getting rid ofthecar loan. We originally were trying to improve our cash flow and dump some debt. We discovered, though, that having no car loans has give us more options with our time and lives.
When we were first married, we had plenty of love, but also debt. Long story short, I took the idea of getting a reliable car and signed up for a car loan. Looking at my income, it was a huge weight on my tiny budget.
Even when we combined our money, it became obvious that the best option for us was to get rid of car loan. We knew that finances can be a huge stress on marriage. We believed having more wiggle room in our budget would reduce that weight on us.
Funny thing – as motivated as we were to get out of debt, neither one of us was looking to live like a pauper. To meet both of our goals, we made a few key choices that not only helped us pay off our car loan much faster, but gave us a path towards financial freedom.
At that time my husband had his first full-time job while I was a full-time student with a part-time internship. While good pay, I had no idea how long it would last. We decided the best course would be to keep our essentials (such as rent, food, transportation, and utilities) under his take home pay. That meant when we were hunting for an apartment we skipped most of the newer places with bells and whistles and went with a small one bedroom place in a smallbuilding owned by an older couple. It wasn’t fancy, but it was across the street fromtheChesapeake Bay. Scenic and we could hang out by the beach for some cheap fun.
How about you? Could start building a buffer by living on one income? Housing is a major expense, so making a change here can save you big bucks.
We were about to squander my income. Instead, we used it to help pay down the car loan, build savings, and fund some of our dates nights (gotta have some fun!). It was an internship so we weren’t rolling in dough, but man, we felt rich because that income had a specific purpose.
Next time you guys have a chance, see if you can break up your budget so you have dedicated funds to dump your debt faster. It’s a psychological hack that has helped many couples.
Neither one of us are huge TV watchers, but we still had some shows and games we wanted to keep tabs on. We began looking for alternatives to the huge cable bill. Nowadays there are some affordable options like Netflix, SlingTV, Amazon Prime, and Hulu.
We also became master negotiators with our cable company. We had dumped the cable packaged, but we used theirInternetservice. Every time a promotion was up, we went on the phone to see what deal we could get.
I’m going to date myself, but back then cell phones were a nice to have bill. Nowadays, they’ve become essential for most people. However paying a ton of money for them shouldn’t be required. There are smartphone providers like Republic Wireless, Ting, and Freedom Pop that can cover your needs. I’ve been using Republic Wireless for my personal and business lines. With their refund plan, I pay about $37/month for both! So it’s been awhile, start looking at cheaper smartphone options for you.
Finally, we knew all the happy hour, college specials, and free events around town. We scheduled dates around events where we could score 50cent tacos and half-price drinks. We grabbed our friends and went to festivals downtown and aroundthearea.
These sounds like small changes, but combining them allowed us to knock off time with our car loan. We paid it off early and you better believe we celebrated!
Of course, no car last forever, so to keep away from getting another loan, we began a car fund. Instead of sending money to a lender, we’re keeping that money in savings where it can grow until we need it.It’s awesome because it allows us to save up without stressing out. If we had a month of big expenses, we skipped on the fund (rarelyhappened, but it was nice to have that option).
When we had to replace our cars (accident for my husband and a family car when the babies came), it was a pretty funexperience. Having the money up front allowed us to get better deals on the price!
My second income is used for other goals likeretirement, trips, and paying down the mortgage.
Thoughts on Dumping the Car Loan
I’d love to hear from you about your wins and struggles. How many of you have paid off your car loan? How many of you are in the process?
Elle Martinez is the founder and host of Couple Money. Her new book, Jumpstart Your Marriage and Your Money, is designed as a four-week guide to help couples build their wealth together!
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