Paying Off My Car Loan and Enhancing My Finances

October 7, 2013 - Christen
In a few months I will reach what I consider to be a very important milestone: I will no longer be paying a monthly car note. For many people, paying off a car loan means that it’s time to take out a new loan to purchase another car (or lease one), but for me (and probably some of you reading this) it’s a good time to reflect on what other financial burdens I’ll be able to alleviate.  
 
The reality of paying off a car also means that the car tends to have high mileage (mine does, especially because I bought it used) and is in need of certain repairs that come with old age. But I shudder at the thought of getting locked into another car note for the next three or four years. I’d rather use my rainy-day fund to make necessary repairs to my car than to take out a new loan. Besides, I already have a few ideas for the “extra” money I’ll have after my car is paid off.
 
Save more toward retirement
One of my top financial goals is to save as much as I can toward my retirement. With that said, I will look at increasing my contributions to my employer-sponsored retirement plan and consider other retirement savings options, such as IRAs.    
 
Increase savings to my rainy-day fund
Unforeseen expenses have a way of happening when people least expect them, and they wreak the most havoc on those who are unprepared for them. Increasing my fund for unexpected emergencies will help me stay as far ahead as I can get.    
 
Contribute more to my son’s college savings plan
One thing that my husband and I decided that we won’t do for our son is go into debt by fully financing his education. Some might think this is harsh, but while you can get a loan for education, you cannot do the same for retirement. While we will encourage him to get good grades, participate in school-related activities, and apply for scholarships, we are also planning to help fund his education through a college savings plan (see Choosing a College Education Savings Plan Part One: 529 Plans for more on this topic).  
 
Home improvements
As any homeowner knows, the purchase of a house is likely one of the biggest that you’ll make, so it makes sense to keep it well-maintained; and with one less bill to pay, I’ll have more to spend on needed home improvements.
 
Are you at or nearing the end of paying a monthly car note? If so, what are some things you plan to do with the money you’ll be saving after your car is paid off?

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