Achieving the Unattainable: Paying Off a Car Loan Early
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Chapter 1: The Power of Setting Ambitious Goals
Recently, I came across an intriguing article on Medium that delved into the concept of setting seemingly unattainable goals and their potential to foster personal growth. While I couldn't track down the exact piece, I found numerous discussions on the subject.
You might wonder, are impossible goals merely a setup for failure? The answer isn't straightforward. Many advocate for establishing smaller, more manageable objectives to build momentum and avoid disappointment.
However, based on my readings, the key lies in the mindset you adopt. If you approach a challenge with the understanding that success is unlikely, the pressure diminishes. This mindset allows you to exert effort without the weight of expectation.
Interestingly, the author of the article I encountered succeeded in reaching their ambitious goal. Inspired by this, I’ve decided to set my own lofty aspiration: I aim to pay off my five-year car loan in just two years.
The Challenge Ahead
Currently, I’m halfway through my loan term, which leaves me four years remaining. On top of that, I need to tackle a more pressing debt: a $2,500 credit card balance that carries an 18% interest rate. My strategy is to prioritize this credit card debt before focusing on the car loan.
The Strategy
To begin, I plan to allocate a portion of my tax return towards my credit card balance. I’ll also resist the urge to indulge in silver purchases from APMEX or random buys on Amazon. Instead, any surplus funds will be directed toward paying off my credit card.
Once that debt is cleared, I’ll redirect those payments to my car loan. With no minimum payment looming over me from the credit card, I’ll have more room in my budget to tackle the car loan.
Tracking Progress
I officially started this financial journey on February 15. I used $800 from my tax return to chip away at my credit card debt, along with an additional $800 spread across three payments in the following weeks. This brings my credit card balance down to $900.
Looking Ahead
While I realize that making such large payments bi-weekly isn’t sustainable with my current income, I plan to adjust my strategy. My goal is to contribute an extra $800 monthly on top of my regular payment of $312, potentially breaking it down into four payments of $200 each.
With a total monthly payment of $1,112 and an outstanding balance of $13,602 (plus the remaining $900 on my credit card), I estimate it will take just over 13 months to meet my goal. However, I’ve already set the bar too high, as the initial target was one year.
Conclusion: Embracing the Journey
I acknowledge that this is a formidable challenge. I anticipate unexpected expenses and occasional lapses in my resolve, such as indulging in silver purchases. Yet, that’s the essence of setting ambitious goals: it alleviates the pressure of achieving perfection and teaches us that setbacks are part of the process.
Even if I don’t manage to pay off my five-year car loan within the designated 12 months, I’ll still consider it a victory if I can reduce my total debt to around $4,000—equivalent to making one extra payment and a few additional dollars.
So, have I convinced you that pursuing such a goal is worthwhile? I encourage you to set your own ambitious objective and share your progress with me!
Thank you for taking the time to read my journey!
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Chapter 2: Practical Steps to Financial Freedom
To aid in your own financial journey, here are two insightful videos that provide strategies for paying off auto loans efficiently:
The first video titled "How To Pay Off TWO 5-Year Auto Loans Worth 50000... In Less Than TWO YEARS!" discusses effective methods to eliminate substantial auto loans swiftly.
The second video, "How To PAY OFF Your Car Loan in HALF the Time!" offers practical tips for accelerating your car loan repayment process.