Our Last Car Payment

Mr. B and I have done a lot of financial soul searching since the fall of 2008 when the economy became visibly awful.  Only months before my layoff that scared us into budgeting, though, we'd taken on our first car payment - traded Mr. B's fully paid for (but questionably operating) Honda Accord for a new small SUV.  We were bright eyed and bushy tailed DINKs and didn't think twice about having a car payment and thought it was the smarter choice rather than putting a sizable dent in our savings account to pay cash.

I quickly came to hate that car payment.  Interest and pay-off quotes, a penalty for early payment - it all made my head spin.  We talked many times about just making the savings transfer and being done with it, but there's just something about withdrawing from savings that causes our hearts to drop. Then Leah (literally, within days of my being laid off) linked to Dave Ramsey's car philosophy and it just clicked with me.  It took us until the next summer to put it into action, but we decided we'd pay B's new car down aggressively and save specifically to replace my 2 door VW Beetle with a family friendly car down the road.

Within minutes of starting to save to replace my car in the next few years we found out Little Tom was on his way and ramped up the car savings.  We went from putting a moderate set amount each month into the "Car Savings Fund" to putting as much savings as possible after retirement contributions and every bonus into the car fund and within seven months we paid cash for my new to me car.

I set a goal of saving to pay off B's car by Tommy's first birthday (about 3 years early), but when we calculated the daily interest we're paying, we just decided to be done with it.  So, last week we used the excess from the car savings fund and a transfer from savings to pay off the you-can-take-the-kids-out-of-Boulder-but-you-can't-take-Boulder-out-of-the-kids Subaru.  And it was liberating.  Our final car payment.

We will continue to fund a car fund - though not as aggressively - for repairs and replacement down the road, but so long car payment.  Our main priority right now is to take excellent care of our cars so that we won't be replacing them anytime soon - between the two of us we can transport an entire soccer team, so room won't be an issue for years to come.