Financial Friday 8/20/10 - Debt Elimination

As you probably already know, hubby and I are big Dave Ramsey fans. Where we might not agree 100% on everything he says, we agree with the "live like no one else, so you can live like no one else" mantra.

We started our baby steps in September 2009. It's been a slow process and SUPER hard, especially with Brian still in school. Regardless, we have been blessed enough to pay off several thousands in debt.

HOW...is this possible?

1) the Lord

2) my life partner & being in agreement with each other and our future

3) SACRIFICE

I am proud to announce that we are officially FREE of car debt! We eliminated over $12,000 + interest in car debt in less than 30 minutes by selling our car.

According to my amortization schedule, at the price we paid + interest, paying the minimum payment amount at the full term of the loan, we would have paid close to $5,000 in interest. WHAT? Great, an extra $5,000 out of pocket on a depreciating asset.  That ticks me off just thinking about it!!

We did some research, planning, phone calling, etc. and got a deal to sell the car. Then, we bought a cash car for $2,000. My first thought - how is this going to save us money? Basically - pay 2k to NOT PAY 12k. Sounds like savings to me. $10,000 in savings! AND by "paying off" the car early, we saved an additional $1700 in potential interest. YES!

Now we have no car payment. We have a cash car that we could probably recoup 50% of what we paid for it when we trade in for our next car. And that is exactly what Dave Ramsey recommends to do. Buy a cash car. Make monthly "payments" to yourself for your next car. When you have enough, combine the cash + the car you currently have and upgrade to a better "cash" car.

Brian and I VOW to NEVER have a car payment again. Hopefully we can keep that promise.

A lot of people don't view a car payment as debt. I do. The Bible says, "the borrower is slave to the lender." You are paying someone EXTRA to loan you money for something you couldn't afford. If you want to get out of debt quickly - sell your car! Pay off the loan, and drive a cash car for a while. Trust me, it is so nice to not have that car payment.

Now that all that is gone, we can concentrate on school loans & our new home. Brian's school loans won't even be "open" until November 2011, in which we will have all the money saved due to NO DEBT!!!

Enjoy the FREE savings?

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