Never had a paid off debt cause me to lose sleep at night.

Being debt free is a great feeling.

quote:

Originally posted by IntrepidTraveler:
I started listening to Dave Ramsey probably 15 years ago. Not all of his stuff makes sense from a number standpoint - example, his debt snowball, where you pay your debts from smallest to largest, regardless of interest rates. But it does make sense psychologically - by paying the smallest off first, you can actually see progress.

Same thing with me and car loans. Any more having the debt just does not feel right to me. I just don't like it.

It’s almost always a psychological problem. If it was a math problem everyone would be good with money.

Not sure what your loan required for insurance? I typically go straight liability when no money is owed. You might check that out. I've never needed to use "full coverage" and always paid for glass repairs out of pocket. Been taking that strategy over the last 40 years or so and it really helps to build up savings to pay cash for the next car.

This may not be an acceptable strategy if your risk tolerance is low.

Now start putting the same amount as the payment into a separate bank account for when you gotta buy a new car/truck in about 12-15 years, and you’ll be able to pay cash for it.

quote:

Originally posted by 1s1k:

quote:

Originally posted by IntrepidTraveler:
I started listening to Dave Ramsey probably 15 years ago. Not all of his stuff makes sense from a number standpoint - example, his debt snowball, where you pay your debts from smallest to largest, regardless of interest rates. But it does make sense psychologically - by paying the smallest off first, you can actually see progress.

Same thing with me and car loans. Any more having the debt just does not feel right to me. I just don't like it.

It’s almost always a psychological problem. If it was a math problem everyone would be good with money.

Yes I can do the math, the math says I can't earn the same as the loan, follow the math. My brain says "doesn't it feel nice to have an extra $20k in the bank?". It's weird, I feel guilty for doing what I know is the right thing to do.

This is great advice.

quote:

Originally posted by MikeinNC:
Now start putting the same amount as the payment into a separate bank account for when you gotta buy a new car/truck in about 12-15 years, and you’ll be able to pay cash for it.

quote:

Originally posted by Skins2881:
I don't feel comfortable investing the money in the stock market with the current run-up and the outside chance of a continuation of the current administration.

Take that $ that you were throwing at your car note and invest in something. Gold, Silver (brass & lead also works to a certain extent), look into something that you're comfortable with that will make you money.

quote:

Originally posted by Gustofer:
Yes. Being out of debt is ALWAYS a smart move.

Can't think of a better way to say it.

I would never choose to be in debt while having the capability not to be. And I don't care if I could make a little more in interest somewhere else....if I still owe somebody money then it's not my money to invest.

The only debt we've ever had was a little bit for school and our house. Paid the school loans off within a few months of graduation, and the house a few years ago. The freedom is a beautiful feeling.

its always smart to get out of debt

Just got a new car. Always bought cars before, but this one, for various reasons, it made a lot more sense to lease rather than purchase.

Sales dude said, "monthly lease payments are only $ddd.cc" -- wife asked if there was an option to pay the complete three-year lease up front.

Sales guy got a quote for that, it saved money, so paid for the entire lease up front. Over and done.

Guns don't kill people,
Interest on the other hand . . . .

quote:

Originally posted by Skins2881:
Considering that the loan was 1% over what I could get with a CD and that CD rates will be falling I think it's a smart move.

Definitely a smart move, especially in that situation.

And even in situations where the interest is low or 0%, the psychological benefit of paying off the debt can be a smart move for some people.

(Though personally, I'm not in a hurry to pay off my 2% mortgage, since even just sitting in my savings account that extra money that I could be throwing at the mortgage is making over double that at 5.1%, and even more in other investments. But everyone is wired differently, and I can definitely appreciate the peace of mind of being totally debt-free.)

quote:

Originally posted by Skins2881:
Paid off my car loan only 4 months into the term today.

Anyone have a reason I shouldn't have?

Smart move. Money "invested" in any commodity is a gamble. Yeah, you might have doubled the money if you left it in stocks, but maybe not.

Mathematically, sometimes it is better to keep a debt and invest in something. e.g. if you can get more in a government t-bill than the price of the debt. But, the difference is always quite small for normal people, perhaps tens or maybe hundreds of dollars in a year. Not a lot of money for all the stress of having debt to service. (What if you get laid off or have a major medical situation keeping you out of work for a while?). Just your time to manage the debt payments could be worth a lot more than any profit.

Back in the late 90's into 2001 I was making a high % gain in tech stocks. I started with $10,000 which took me more than a decade to save up initially, and grew it to a peak in 2001 where I could have paid off the house and/or put the kids through college. I had let my money ride in the market while buying 2 new cars on credit. Why not, when the cost of the car loans was maybe 7% but I was making many times that return in the market?

Then the tech market crashed, and I ended up back at the original $10k. But I still had both car loans!

Paying off debt when you can is always a smart move imho.

Always smart.

This message has been edited. Last edited by: PGT,

With interest rates being what they are, that’s likely a smart move.

That’s a solid move and it feels great to be debt-free.

quote:

Originally posted by RogueJSK:
Definitely a smart move, especially in that situation.

And even in situations where the interest is low or 0%, the psychological benefit of paying off the debt can be a smart move for some people.

(Though personally, I'm not in a hurry to pay off my 2% mortgage, since even just sitting in my savings account that extra money that I could be throwing at the mortgage is making over double that at 5.1%, and even more in other investments. But everyone is wired differently, and I can definitely appreciate the peace of mind of being totally debt-free.)

I would keep a 0% loan as long as I could, assuming I didn't owe it to a family member or friend. Put the money that could go to pay the loan off early into a government guaranteed CD. I know some people feel differently so they can do as they wish.

We bought a car financed with a 1.5% loan. I was in no hurry to pay it off. We had sufficient funds to do so, but those funds were earning two or three times that much so we took the entire three years to pay the loan off. It never bothered me at all.

Yes, smart move. You put $1800 back into your coffers.

I know the vehicle in question. I did kind of the opposite on mine and put $25k down because of the interest rates. I got 5.49% and even that is high to me. I saved for about 4 years and that helped a lot. Cheap car payments and I cut out a lot of the interest on the front end. I pay my loans off usually 12-24 months early to boot. I bought land last year and had I not done that I would have just bought it outright. Land + Car in the same year I need a few years to recover. Killing myself trying to do a lot at once but I didn’t think people moving here would get this bad, this fast.