On the right-hand side of this blog is a list of the 7 baby steps. Let's talk about step #. Over the last five years, we have accumulated nearly $31,000 in debt ($14,500 on a school loan and $16,500 on our Jeep Liberty). As of June, 2008, we have paid off the school loan, and have $13,000 remaining on the car loan.
Because we would like to move on to step #3, we have three options:
- Continue to pay off the car loan, making the regular payment ($344 per month). The loan would be paid off in January 2012.
- Make additional payments on the principal (adding $320 per month would shorten the length of the loan to March 2010).
- Make additional payments and sell the car ASAP.
Now, we'll still need two cars. Once the Liberty is gone, we'll need to figure out how much we have available to spend on another car. It may be that we'll need to take out an auto loan for$2000 or $3000, which we would pay back in a few short months.
Conclusion
Our goal is not only to get out of debt, but to create a self-sustaining account that allows us to buy newer automobiles the rest of our lives.
8 comments:
I'm glad to hear you've been able to figure out a way to pay off your debts. It should be smooth sailing from here.
I agree with you. It is not advisable to pay all your debts all at the same especially if you have limited amount of money. This also applies to credit card holders. There are certain studies that people who pay debts at once tend to owe much more debts than any individual who pay in a timely manner. This is because people who pay in advance tend to use their credits to buy another thing/property. They will then end up accumulating more debts. It is essential to pay debts in timely manner but make sure to budget your payments.
This is a very crucial step in paying debts. A housing loan can be repaid up to 10-15 years depending on the kind of the housing loan financing program an individual applied. It is still the prerogative of the owner if he wants to pay it in full or installment. The best thing is, he pays his debts on time.
You can apply for loan modification if you have difficulty paying your loans or debts. This will give you a sort of financial freedom. It will also give you a peace of mind regarding the possibility of foreclosure. mortgage leads
I think it will be easier for you to stick to the cars that you are using for at least 10 years before purchasing new ones. If maintain them in good condition, you will be able to save more money by not buying new cars every now and then.
It's not really easy to get out of debt. If you want to achieve your financial objectives, you have to plan your budget very well.
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I couldn't agree more when you noted that car loans should be more of a priority than the home mortgage. Why? Because there are more viable options available for saving home mortgages. As for the latter, once you miss on your payments, you can wind up losing your car which has a shorter amortization period and lower cost and can easily be an investment after you have paid it off.
There have been several recounts here already about your point but I guess the main thing to digest here is that the reason you can delay payment for home mortgage is because it is easier and you have more available options to re-finance your homes rather than your car which loses value every single day.
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