I mentioned a few weeks ago that right now we're focusing on paying off our car loan early. At the time, we owed approximately $3,600 on it, at 4.9%, and our payments were set to run through November 2012.
We had been working to pay off our credit card debt for all of last year and are super excited that we managed to pay off over $10,000 of it, which was mostly due to remodeling work that had to be done.
In January, we took another look at our finances, as we do very regularly. We had $3,600 left on our car loan and $3,600 left of credit card debt. And both needed to be paid by November. The difference was that our credit card is at 0% interest until then and the car is at 4.9% interest.
So we took the focus off the credit cards and decided to tackle the car loan first. So any extra money we have each month will go towards this.
I had been paying $400 per month, but then added in an extra $20 just to give it a little jump start. Then when we cancelled our cable, I added in the $40 savings each month to also go towards our car payment, bringing it to $460 a month minimum payment.
Luckily enough we had more extra cash last month and managed to pay off $900 instead of the $460!! So our loan balance is now at about $2,700.
Later this month, we should have a nice sized tax refund and about $2,000 will be going towards paying off our car loan.
Our tax refund, combined with our regular payment this month, will knock our balance down to about $225 or so! I would LOVE to come up with that money this month and get it completely paid off, but I don't really see that happening. So we will just have to wait until next month to pay it off.
Once the car loan is gone, we'll use the amount we had been paying on it, to go towards our credit card payment. And then we'll see how fast we can pay that off! It's so exciting to be freeing ourselves from all of this debt and I can't wait to see our future once we're unburdened by it all!
I can hardly believe that a year and a half ago, I was miserable over the state of our finances. We never had late payments or anything like that. We just had debt piled up and we thought it would take us forever to pay it off. But we took the plunge and worked so hard to get where we are today. We did it. You can too.