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5 Simple Ways to Pay Off Your Car Loan (Much) Faster

5 Simple Ways to Pay Off Your Car Loan (Much) Faster

Having a large car payment can make it hard to pay the bills. And if you have payment terms lasting five or more years, it’s beneficial to pay it off sooner rather than later.

Imagine what you could do with a few hundred extra dollars each month. You could save for retirement, purchase a house instead of renting, enjoy a vacation, or any number of things that seem impossible at the moment.

Here are a few practical and simple tips for paying off your car loan faster and more efficiently:

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1. Rent Your Car Out on Turo

Don’t have the time it takes to be an Uber driver? There are some other ways to make money with your car. One option is to rent it out.

Coupon Ninja, a leading site for discounts and deals, is fond of using Turo. “If you’ve got a relatively nice car but don’t drive it every day, you can make some money by renting it out through Turo. Listing is free, you can set the minimum daily price, and you can turn down any prospective renters.” Not bad, eh?

2. Make Bi-Weekly Payments

Not quite comfortable with someone else driving your car? Don’t worry – you don’t have to relinquish control just to pay off your loan. There are plenty of other options. One method includes splitting your payment in half and making bi-weekly payments, as opposed to monthly payments.

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This may seem like the same thing – and it is to your bank account – but it actually ends up benefiting you in the long run. By making a payment every two weeks, you end up making 26 half-payments annually. That’s 13 full payments (one more than the 12 you’d usually pay).

If you have a five-year, $10,000 loan, you’ll only save $30-$40 in interest. However, the real benefit is that you end up paying off the loan six months sooner. This is considerably quicker and lets you regain your financial freedom much sooner.

3. Round Up Payments

Another option is to simply round up your payments each month. For example, let’s say your monthly payment is $264 per month. If you were to pay $300 instead, that would equal an extra $432 per year – more than one extra payment. This will also allow you to shorten the length of your loan by a few months.

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4. Wrap your Car With Advertising

If you’re one of those people who could care less what others think about them, then you can earn some money by turning your car into an advertisement.

“If you don’t mind your car being a moving billboard, then sign up with MyFreeCar.com, which will ‘wrap’ your car with advertising,” Bankrate.com explains. “You’ll get paid while you are doing your regular driving.”

5. Sell or Refinance

Finally, there’s always the option to sell or refinance. If you feel like you can take on a bigger loan payment in return for paying off the loan quicker, then don’t hesitate to contact the lender. They may or may not take you up on this offer, but it’s worth checking out.

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If you aren’t attached to your vehicle and don’t mind trading in for something a bit cheaper, you may be able to lower your loan payment and then pay it off a few months, or years, sooner.

Enjoy the Freedom of No Car Payments

Car payments are a drag. Not only do they hurt your monthly cash flow, but they also cost thousands of extra dollars in interest over the course of your ownership. With that being said, it’s important that you actively identify the best ways to pay off your loan. Your wallet will thank you in the long run.

Which techniques will you try?

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Larry Alton

Business Consultant

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Last Updated on June 6, 2019

The Average Retirement Savings and How to Save Wisely

The Average Retirement Savings and How to Save Wisely

Are you on track for retirement?

If not, don’t worry, I’m not sure either. I save each month and hope for the best.

Fortunately, I’m at an age where most people don’t save so I’m ahead of the curve.

But, what if you aren’t in your 20s? What if you’re near retirement and are looking to gauge where you stand?

If so, keep reading. Here’s how to prepare for retirement and save wisely during the process.

What Does the Average American Have Saved for Retirement?

Saving for retirement is tricky.

Tell someone straight out of college to save $10k a year for retirement and it’ll be next to impossible.

Make the same request to someone decades older and they’d be more likely to be able to save this amount. But, a 20-year old college student can be “financially ahead” of someone saving more than them. Why?

Age matters in your financial journey. The younger you are, the more time you have to save and put compound interest to work. As you get older and have more saving power, you’d have less time to put compound interest to work.

Here are the average savings Americans hold by age bracket:

20’s – $16,000

During this stage, most people are paying loans and moving up the corporate ladder. Your best bet during this stage is to focus on eliminating debt and increasing your income. Don’t focus only on getting a high-paying job neither.

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Instead, focus on learning via Podcasts, reading books, and taking specialized courses. Doing this will make you more valuable and give you more career options.

30’s – $45,000

At this stage, you’ve hopefully escaped your entry-level salary and work at a career you enjoy. Your earning power has increased but you now have more obligations. For example, marriage, kids, and a mortgage.

Set a plan to pay off all your debt and focus on eliminating unnecessary expenses. Leverage financial tools like Personal Capital to ensure you’re on track for retirement.

40’s – $63,000

This is the stage where you’re at the prime of your career. Top financial institutions recommend you have at least 2 to 4 times your salary saved up. If you’re falling behind, start maxing out your 401K and Roth IRA accounts.

50’s – $115,000

During your fifties, you’re close to retirement but still, have time to save. You may be helping your kids pay college tuition and other expenses. Since you’re at the peak of your earning power, max out all your retirement accounts.

60’s – $172,000

By this point, you should have about eight times your salary saved up. If not, you’ll depend primarily on social security benefits averaging $1400 per month. Max out all your retirement options as much as possible before retiring.

Ways to Save Money on a Tight Budget

The sad reality is that most Americans aren’t saving enough for retirement.

Even high-earning power isn’t enough to secure one’s financial future. You need to have the discipline to save for retirement while time is in your favor. Don’t wait for you to have a high salary to save, start with having a small budget.

First, get a clear picture of where you stand. Write down a list of “needs” and “wants.” For example, Netflix and Amazon Prime are “wants” and a “cell-phone” is a need.

Use tools like Personal Capital to analyze your spending patterns. Personal Capital allows you to add all your financial data in one place–making it a powerful option to gauge where you stand.

Once you know all your expenses, organize them from highest to lowest expense. When you can’t cut more expenses, call your service providers to negotiate a lower price. If you’re not good at negotiating, use services like Trimm to lower your monthly expenses.

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How to Save Money Each Month

By this point, you know the average amount of money you should have saved for retirement based on your age.

But, breaking this down into monthly goals can be challenging. Here are some rule of thumbs to follow:

Aim to contribute 10%–15% of your salary each paycheck. Review your progress each week.

Why so often? The reality is that life gets in our way and you will have many financial setbacks. Your goal isn’t to be perfect but to get back on track instead.

Reviewing your finances weekly lets you know where you stand with your retirement. This doesn’t have to be a long process either. All it takes is login in Personal Capital to view your net worth and check how much you have saved for retirement.

Turn saving into a game and aim to save more each month. It will get challenging but you’ll get creative and find more ways to save.

Top Money Saving Challenge Tips

To prepare for your financial future and not be another statistic you need to be different.

How?

By adopting new habits that’ll help you become a saving machine. Here are some ways you can save more:

Automatically Contribute Towards Retirement

If you’re working for a company, you can automatically contribute towards your 401k. If you’re not currently contributing more than 10%, make this your goal. Contribute 1% more today and automatically increase this amount a year from now.

Odds are that you’re not going to be negatively affected by contributing 1% more. Many times we spend our money on things we don’t need. Contributing more towards retirement is a great way to secure your financial future.

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Use the Right Tools to Know Where You Stand

Once you’re contributing more towards your retirement accounts, gauge your progress. Make use of finance tracking apps to help you view the big picture of your retirement.

When I’d first signed up for the app Personal Capital, I didn’t know I had a negative net worth. Despite saving thousands of dollars, my debt brought my net worth to the negative. Knowing this motivated me to save more and spend less.

Now, I have a positive net worth. But, it was because I was able to view the big picture using the app. Find out what your net worth is using a finance tracking app and you may surprise yourself.

Bring in Experts to View Your Blind Spots

If you have too little or too much money saved, you should consider hiring financial experts.

Why?

You may need someone to hold you accountable to help you reach your financial goals. Or, you may need help managing your money as effective as possible.

Regardless of the reason, getting help may help improve your financial situation.

Before you hire an expert, find out which areas you need help the most. For example, if you’re constantly overspending, find a debt counselor. If you’re struggling with choosing the best investment options, hire a financial advisor.

Speed up Your Retirement Contribution

After learning how to manage your money well, the next best thing is to earn a higher income.

You’re capped at how much you can save but not much you can earn. Even if your employer isn’t giving you a promotion, you can still take charge of your financial future. How?

By starting a side-business.

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This will be something you’d work on after you’ve finished your day job. Once you start earning income from your side-business, you’ll be financially better off.

The best part is the more work you put into your side-business,[1] the more potential it has to earn more money.

So start a side-business in an area you’re familiar with. For example, if you enjoy writing, do freelance writing for small e-commerce businesses.

Once you’re earning a higher income, you can contribute more towards your retirement. Don’t wait for the right opportunity to secure your financial future, create one.

Reach Financial Freedom with Confidence

What if you were able to retire tomorrow with no problem, all because you’d have enough money saved up and little to no debt left to pay off? How would you feel?

My guess is that you’d feel happy and relieved.

Most Americans are falling behind their retirement goals for many reasons. They’re not prepared, they carry bad money-habits and are thinking short-term.

For you to retire successfully, you need to work backward and adopt better habits. Contribute more towards your 401K and focus on growing your income.

If you do, you’ll save money and pay debt faster.

Don’t beat yourself up if you’re behind your retirement goals. Take the first step today towards a brighter financial future. Isn’t retirement worth the hard work and sacrifice to be at peace?

Featured photo credit: Huy Phan via unsplash.com

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