I have been keeping a little secret from my readers and I am now ready to reveal it. I paid off my car IN FULL so I now own it. Woooooo hoooo!!!!! I no longer have a car payment that I will be sending to the bank but I have decided to keep the amount in my budget and place it in my Car Fund. (No that is NOT my car in the image below….it is my dream car though.)
I created a sub account in ING (Oh how I love ING) and set up an automatic ‘car payment’ which moves the monthly payment from my checking account to a savings account every month. This money is going to be used to pay for those miscellaneous car items like inspections that are not taken care of on a monthly basis.
I am also using that to grow a savings goal towards the purchase of a new (actually used, but new to me) vehicle in the future. This is part of the snowflake strategy of continuing to budget for the same amount but using it for savings instead of debt since I am CAR debt free.
Another thing that relates to me paying off the car is that I can now lower my insurance premiums because I do not have to keep the insane amount of coverage that you need when you have a loan. I will be increasing my deductible since I have $1000 in my car fund that I can use in case I need it so this will lead to lower monthly payments on the insurance for me.