Today’s post is from Adam Olson over at Wallet Squirrel. Adam and his wife paid off their car loan ($7,00o of it in 3 months) and will share with you today exactly how he did it.
Today it is your turn to learn how to pay off your car loan faster.
Many people think it’s normal to have car debt forever, but it’s not. You can live debt-free and 100% own your car. It’s so freeing to live in financial freedom. You can do this!
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.
You should look at when do you want to pay it off by.
You will want to make sure that you choose a timeframe that is feasible for you to achieve.
Then look at how and what you can do that will help pay that car loan off faster.
These questions are a little harder to answer in one sentence, so we will look at them for the rest of the article.
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Adjusting Your 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.
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.
Tip: Cushion is an app that refunds bank and credit card fees. You can expect refunds on things like late fees, overdraft fees, monthly service fees, account maintenance fees, ATM fees, credit card interest charges, late fees, and more. “Cushion got $187 worth of fees (that I was not aware of) waived from my credit card within a few hours of signing up. They turned me into a believer real quick!” – Isaac, Cushion User
Minimizing Excessive Spending
Cutting excess spending goes along the same lines with refining our budget.
I tend to see refining your budget as a high overview. Cutting excess spending is working on the nitty-gritty details.
So how did we cut out our excess spending?
Easy. We started by looking at each expense we had and asked ourselves, “Is this a need or a want?”
We also made a cut with our cable bill. We did not need it anymore, so I canceled it, just leaving us with our internet.
This saved us 50% a month on our cable/internet bill.
Of course, there are plenty of items that are necessary.
These include mortgage, groceries, cell phone, gas, and so on.
I recommend grabbing the Honey extension for your internet browser to help you with necessary online shopping.
Then for in-store shopping, I would download the Ibotta app on your cell phone.
These apps help my wife, and I save money every week.
This money went directly to helping us pay off our car loan faster.
Tip: Want to save money when shopping? Ibotta is a free money-saving app that gives you cash back at almost any store. You get real cash – not points. Ibotta is my go-to app for saving money on groceries (even fruits and vegetables!), clothes, travel, and a lot more. You even get $10 in your account just for signing up through my link here.
Lower your bills and save money
Billshark is a MUST for anyone who has a cell phone, cable, internet, or insurance bill and wants to lower their bill.
And trust me, it works because I’ve used it myself on 3 different bills and I’ve saved $290.
Here’s how Billshark works:
- Send copies of your bills to Billshark. (I did this by uploading an online PDF of each bill).
- Billshark negotiates all of the bills you send in.
- You get notified if Billshark was successful. If they are, they take 40% of the savings. Ex. Billshark saved me $290 over the course of 6 months, so I pay them $116. I can do this in a monthly payment plan or all at once.
It’s definitely worth the savings and it was such an easy process.
Last Summer my wife and I decided to redo our backyard as well.
We were able to save nearly $5,000 while doing this remodel (You can read more about that here).
One of the biggest reasons we were able to do this is because we recycled a lot of material.
For example, we reused a lot of rock that ended up saving us nearly $300!
We also now buy most of our clothing second hand at stores such as Goodwill, The Arc, and Once Upon A Child.
Do it Yourself
My wife and I have saved thousands of dollars because we do not have to hire anyone to do it for us.
As I mentioned above, we redid our backyard last year.
We did all of it ourselves and saved us about $3,600 in labor costs.
Other projects we have done ourselves include replacing the hardwood floor in the kitchen, painting, and opening up our kitchen by busting a hole through one of the walls.
Be smart to know what you can and cannot do, though.
Even though I probably could, I am not going to redo the houses electric wiring.
We are currently saving up the $5,000 for that major project.
Tip: Do you shop online? If so, you’ll want to use Ebates from now on. Ebates is a website that gives you cash back for your purchases, giving up to 40% cash back. All you have to do is log on to Ebates, find out which store you want to shop at, and you’ll start getting cash back. You get $10 for signing up through my link here.
Selling Items That are Not Needed
I made it a point to sell items around the house that I did not need in my life anymore.
This money helped us shave off nearly $1,000 from the car loan.
Your assignment is to look at the items you barely use around your house.
Ask yourself, “Do I 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 Craigslist or eBay to help you earn some extra cash to pay off your car loan faster.
Getting Rid of Temptation
Advertisements are everywhere to tempt us with the latest and coolest gadgets for purchase.
Giving in to these temptations is a weakness of mine because I am such a materialistic person.
I had to find a way to minimize these temptations, so I did not want to go out to buy things I did not need.
For me, the biggest culprit was all those emails from retailers that I love, such as REI.
To help reduce these, I started using Unroll.Me to unsubscribe me from all the pesky emails.
Whatever might be tempting you, try to find a way to remove that trigger to spend excessively.
Earning Extra Money
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 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 tried out.
Tip: Are you looking for an online job? Become an online English Teacher at Qkids and make up to $20 per hour from home. You can learn more details and apply here.
Keep Your Eyes on the Final Goal
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 one big main goal written down with every sub-goal that is going to help me get to my final goal.
I look at these sub-goals every week deciding on which one I am going to accomplish for that week.
It feels so good to check those smaller goals off knowing that I am one notch closer to completing my main goal.
Now Go Save!
Now it is your turn to go out and save to pay off your car loan faster.
➡️ What to read next: 11 Best Personal Finance Podcasts For Achieving Financial Freedom
How do you plan on tackling this debt?
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