How to Pay Off Your Car Loan Faster – How I paid off $7K in 3 Months
Today it is your turn to learn how to pay off your car loan faster. Over the last three months (May to August), my wife and I have worked really hard to pay off our car loan.
I can now say, as of the end of August we finally did it! What an amazing feeling it is to free up $405 a month to tackle other debt we have. Ugh….student loans…
We took a multi-faceted approach to tackling this debt so we could start focusing on our combined $90,000 student loan debt.
Where to Start
To start off with how to pay off your car loan faster, you need to create a roadmap. Do not just jump into the process without a plan on how you will tackle debt so aggressively.
This roadmap should look to answer three questions. When? How? What? You should look at when do you want to pay it off by. Then look at how and what you can do that will help pay that car loan off faster.
You will want to make sure that you choose items that are feasible for you to achieve. I want you to be successful to paying off your car loan faster!
It is a good thing I have a list of easy ideas for you to use. Let’s get started!
Refine that Budget
One of the first things we did was take a serious look at our budget to find where we could cut down costs. We decided to cut our weekly grocery bill by 25%. We also cut our entertainment budget along with our utilities.
Take a look at your budget to determine what categories can be trimmed down in costs. Some easy categories to start looking at first are entertainment, eating out, groceries, or utilities. I use Mint to help organize our budget and see where we are actually spending.
One sneaky way we adjusted our budget was during the summer. We were able to temporarily remove our son’s daycare expense. As a teacher, my wife has the summer off so we were able to pull him out of daycare for 10 weeks. This ended up saving us $3,000!
Cutting Excess Spending
Cutting excess spending goes along the same lines with refining our budget. I look at refining your budget as a high overview and cutting excess spending as working on the nitty-gritty details.
So how did we cut out our excess spending? Easy. Start by looking at each expense you have and ask yourself, “Is this a need or a want?” If it is a need, then keep it. If it is a want, then it needs to be cut out. Do you really need to pick up a pop every day on your way to work (Personal example)? Probably not.
We made the cut with our cable bill. We didn’t need it anymore so I canceled it, just leaving us with our internet. This saved us 50% a month on our cable/internet bill.
Couponing on Necessary Spending
Of course, there are plenty of items that are necessary. These include groceries, cell phone, gas, and so on.
In today’s digital world it is so easy to find coupons to help us save money. I recommend grabbing the Honey extension for your internet browser to help you with necessary online shopping (see review here). Then for in-store shopping, I would download the Ibotta app on your cell phone (see review here).
These apps help my wife and I save money each and every week which in turn can be used to pay off our car loan faster.
Selling Unnecessary Items
If you read my How to Get Rid of Distractions article, you know I was trying to sell items around the house that I did not need in my life anymore. Well, I did sell most of the items on my list. This money helped us shave off nearly $1,000 from the car loan. Pretty awesome right!?!?
Your assignment is to look at the items you barely use around your house. Ask yourself, “Do I really need this? Does it help me towards my goals or does it distract me from them?” If you do not need the item or it is a distraction, it is time to sell it. You can either sell the item on Craig’s list or eBay to help you earn some extra cash to pay off your car loan faster.
I could write a whole book about side hustling, in fact, some people have. So this will be a 30,000-foot level overview about earning extra money so you can pay off your car loan faster.
Side hustling consists of extra gigs you do to earn extra money on top of your full-time job. These gigs could be selling photography, driving for Uber, delivering for Amazon, freelance writing, and so on.
I have used any income that has come from Wallet Squirrel or my photography sales to help my wife and I widdle down our car loan.
For more ideas, check out our list of side hustles that Andrew and I have actually tried out.
Advertisements are everywhere to tempt us with the latest coolest gadgets for purchase. Giving in to these temptations is a weakness of mine because I am such a materialistic person. So I had to find a way to minimize these temptations so I did not want to go out and buy things I did not need.
For me, the biggest culprit was all of those emails from retailers that I love such as REI. To help reduce these, I started using Unroll.Me to unsubscribe me from all of those pesky emails.
Whatever might be tempting you, try to find a way to remove that trigger to spend excessively.
The last item on this list is the centerpiece that brings all of this together. You need to stay focused on your final goal.
I like to have my overarching goal written down with every subgoal that is going to get me to the final goal underneath it. Then I look at these goals on a weekly basis deciding on which subgoal I am going to accomplish. It feels so good to check those subgoals off knowing that I am one notch closer to completing that overarching goal.
Now Go Save!
Now it is your turn to go out and save to pay off your car loan faster.
How do you plan on tackling this debt?