It’s not good to keep secrets in the blogging world. I know that. And it’s not so much a secret, so much as it isn’t really my story to tell. But we have more debt than I’ve previously mentioned. Well, had.
More precisely, Mr. P had more debt. I wrote a post about how we paid off over $18,000 worth of debt last year. And we did. That was mortgage debt. We also paid off another $6,000 towards Mr. P’s car loan.
I said it.
I married someone who took out a car loan. On purpose.
When we were dating, Mr. P expressed interest in buying a new car. And it was time. He had driven his previous car for almost a decade, and he was bleeding money over it. The thing was falling apart.
I was in a similar situation. In fact, six months before Mr. P took out a loan, I bought a new car as well. I could have paid for the whole car in cash–and I did put down a hefty down payment–but I chose to finance it for 0%. The dealer did not care. Whether I paid for the rest of the car in cash or financed it, we had negotiated down to their rock bottom price (thanks, Dad!). So, I made the decision to earn the 0.5% interest on my money and made monthly payments. The real comfort was knowing that I could pay it off at any time if making payments became too tedious.
Conversely, Mr. P chose to finance his car through a credit union with 0.9% interest. I protested some, but really, it wasn’t my place. I was his girlfriend. I certainly had the right to express my opinion on his prospective purchase, but it was still his money. Plus, at that stage in my life, I was doing a pretty bang-up job of squandering my own money on stuff I didn’t actually need. Hello, pot. This is kettle.
Fast forward several years and a wedding later, and this debt was still lurking around. Mr. P had diligently made the monthly payments, but enough was enough. Had we kept on pace, the car loan would have been paid off this summer. This past week, though, we made the decision to pay the remainder of the car loan in full. Now, the only debt we have to focus on is our mortgage.
The monthly money that was allocated towards his car loan is now being diverted to our mortgage debt. That way, there is no temptation to increase our grocery budget, inflate our discretionary spending, or fritter away the money in some other fashion. We’ve lived this long without. By rerouting it to our mortgage, there’s no temptation and a pretty excellent payoff.
It’s tempting to look back on the car loan and shudder. But no amount of what-ifs can undo that decision. We can’t alter financial decisions of the past, but we can make smarter ones moving forward.
So Tell Me…What smart financial decisions are you taking to keep moving forward?