My Finance Goal! The Strategy I’m Using to Pay Off My Car!

I’ve been seriously giving thought to the steps I need to take to become debt free. As a single mom the more money I have in savings or freed up the better. I’m tackling this goal in baby steps. I just paid off a big chunk of credit cards and now I want to pay off my car. I thought I share the  journey with you as I try to reach this goal. Okay here we go…

Basic Facts
Current Balance – $2,121.73
Monthly Car Payment -$279.35
Payments Remaining-8

Goal
My goal is to pay my car off by December 31, 2014, which would be 2 months in advance.

Strategy

  • In order to pay off my car by 12/31/14 I need to pay $353.62 a month. 
  • A $74.27 difference to what I’m currently paying monthly of $279.35
  • Where is the $74.27 going to come from? 
  • I won’t be paying Anya’s school tuition in the summer months which is $250.00 a month  for 3 months is $750.00. 
  • $74.27*6= $445.56 is the amount I need to set aside to pay the additional amount each month 

Payment Due Date and Amount Owed
June 13th $248.05 (amount is less because I paid more in May) I’ll add an additional $74.27 Total $322.32
July 13th -$353.62
August 13th- $353.62
September 13th -$353.62
October 13th-$353.62
November 13th-$353.62
December 13th-$31.31

I can either pay the extra $31.31 in June and pay off the car in November or make the last payment in December for that small amount. I’m hoping to throw any extra money I have on the car to pay it down quicker. Most likely I will add the extra $31.31 in June so that I’m done before 12/31/14. I would love to pay it off even sooner, but I’m being realistic. I want to give myself some wiggle room in case an unexpected expense comes up.

So there it is my strategy to pay off my car by the end of the year! I’m hoping to add that $279.35 that I won’t be paying any longer to some credit cards and to savings. Saving $279.35 for a year would give me an extra $3,352.20 a year.

So I’l be updating you every month on my progress so stay tune!

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