So as some of you will recall I bought a new car back in June 2014. The car is great on gas (31mpg), comfortable, looks nice, allows me to easily pack the bike in the trunk. I’ve had a couple of unexpected expenses come up but I really do enjoy driving it each and every day. I don’t plan to sell the car and take a financial hit. I expect the cost of ownership to be very low and the loan stays at 0% regardless of how long it takes me to pay it off.
It did add about $16,762 to my overall debt which was previously at 29,719.74. As of my last monthly update my total debt was just over $40k.
One of my goals continues to be to be completely debt-free. It won’t happen before the age of 33 but I still want to try like crazy to get the student loan paid off by then. It looks more and more likely like at age 35 I’ll be 100% debt free. I don’t plan to buy any real estate until these big debts are out of the way.
The money will remain in a separate account and I’m basically hoarding it until I am able to hit the payoff amount at that particular time. My estimates are a lump payment of 10k which god willing I can hit by August 2017 or 31 months from now. The money will also serve as a large emergency fund since I don’t have as much set aside as I really should.
Speaking of that, I’m doubling up on my emergency fund. The $1000 I keep tapping into so I plan to keep an additional $1k buffer in my checking account. Right now it’s been going to 0 almost every month and I have to transfer $250 from the money market. This will also help me stop using credit cards and help curb my overall spending.
If I were to lose my job tomorrow, I’d be royally f’ed over. Only about a month of expenses set aside when I should have 3-6. No one else is going to bail me out if things go astray. My folks don’t have the money liquid and I don’t expect anyone I’m in a relationship with to just suddenly give me that money. As much as I just want to put everything toward the debt, I don’t have a crystal ball.
I also will sleep easier at night knowing I’m not one accidental overpayment or or two weeks away from financial insolvency. The loan isn’t worth ignoring common sense.