Tuesday, March 24, 2015

Mine all Mine

  Before I get started on the main topic of this post I wanted to weigh in on the ongoing staggeringly popular NCAA Basketball tournament that generates BILLIONS of dollars in revenue (see it here)...

  Unlike most of America I didn’t fill out a bracket sheet for this month’s NCAA March Madness mens basketball tournament. Like most of America I watched a large sampling of the first two rounds this past weekend. The big storyline this year is whether the Kentucky Wildcats will win the championship and have the first perfect college basketball season in 39 years. I got to see Kentucky play for the first time this year on Saturday against the Cincinnati Bearcats. Kentucky is very long but not very beefy and were getting pushed around by the very physical Bearcats for most of the first half. What I liked about the Wildcats was that instead of settling for jump shots in the face of a physical challenge they kept bringing the ball inside first and only tried to score from outside when the lane was closed. Cincinnati was unable to sustain their effort for a full 40 minutes and lost by a fairly respectable 13 points. I like the way Kentucky faced up to the physical challenge and I think they will win this tournament and take their place among the best NCAA teams of all time. There is the possibility their season could be undone by a hot three point shooting team but those teams tend to disappear as the tournament goes on since it is exceedingly hard to win game after game with long range shooting. I’ll put my money on the team that can get the ball inside for easy baskets every time and be right more than I’m wrong.

The four door Chevy Spark on the left has the same VIN number than the one on the right but there is a difference. The Spark on the left belonged to Bob Brown and then to me and a finance company while the one on the right is all mine as of last week.

  I’ve had my 2013 Chevy Spark for a little less than two years. When I got the car I put no money down and signed up for a 60 month loan with a payment of $249 a month which included the taxes and a 100,000 mile bumper to bumper warranty. The interest rate on my loan was 2.44% which was outstanding but getting the loan at a term of 60 months was silly on my part. I travel over 100 miles a day to and from work. After three years my car is looking at 90,000 miles and it’s time to think about getting a new car so a five year loan leaves me with two years to pay for a car with 90,000 miles on it. I’ve taken three year loans on all my other work cars and still don’t understand why I set up a five year loan this time around. I set up my payments to be automatically made online with the first payment on July 8, 2013.

  By September 8th 2013, I'd made three car payments and wasn’t seeing much of a dent in how much I owed to pay off my car. A couple of weeks later I got some checks for helping people who still use the shoe store software I wrote years ago and instead of buying a new TV or some chess books or anything else I deposited the checks in the bank and made an online payment towards my car. That made a small but visible dent in my car loan so whenever I got paid for supporting the legacy shoe store software I put it towards paying off my car.

  In December of 2013 I set a goal to pay off my car by May of 2016 (three years from when I took out the loan). To that end I increased the automatic monthly payment from $249 to $325 and I started putting all my extra money towards the car. I got a check from my father in law as a Christmas gift and it went towards my car. I put in some extra time at work (I don’t get paid overtime or even straight time but I do get some time) and I put that towards my car.

  Once 2014 started it was more of the same and more. At work we got a profit sharing bonus and it went to my car along with my shoe store money. Then I was assigned to work at a bank on the other side of Des Moines for most of the year. I got a few dollars a day in mileage reimbursement for driving across town. The reimbursement would get deposited in my bank account once a week and once a week I forwarded it towards my car loan. Even though it was just a few dollars at a time I took a lot of enjoyment in watching the loan balance go down and each time I erased a month’s payment from the end of the loan was like a mini-celebration. Just a week before the 2014 elections, I got a $79 check from Iowa’s incumbent attorney general Tom Miller for a class action lawsuit for some distress I apparently suffered during some telemarketing calls. It was a win-win situation since Miller won re-election and I got to put another $79 towards my car loan.

  Slowly but surely every little bit added up and by March of 2014 I was on pace to meet my goal by just making my automatic payment but I was on a roll. Each night I put my change in a giant jar. Once a year I cash in my change jar but this year I put my change jar towards my car. I kept on putting my gas and shoe store support money towards my car and by the end of 2014 I was on pace to be finished by September of 2015. Then in March I got another profit sharing bonus from work and combined with some of my tax return I made the last payment on my Chevy Spark 22 months after I bought the car and 20 months after my first payment in July of 2013.

  What did I learn from my 18 month quest to pay off my car loan early? I learned a lot about discipline. I could easily have taken a few dollars of my found money and bought a book or had a nice lunch but I didn’t. And I didn't miss the found money since it was found and not something I ever counted on. I’ve known a lot of people that would spend their found money two or three times and be worse off than if they hadn’t any found money in the first place. I’ve been there myself but for the last year and a half I was able to take my found money and put it to a single goal. The other thing I learned is that between occasional gas reimbursements, tax refunds, bonuses, change jars, and supporting my old shoe store software I get a lot more ‘found money’ than I thought I did. Now that my car is paid for the big question to my mind is will I let my found money drip through my fingers or be able to find another good use for it.


Happy Elf Mom (Christine) said...

I'm so glad you got over your "distress" and took the money for your car. Congrats!

Hank Anzis said...

Hi Christine, it was so distressful that I didn't even know I was being distressed. Some sort of 'Stockholm Syndrome', i suppose...

Lonnie said...

In my experience, it is definitely worth it to pay off a car loan as soon as possible. I work at a banking institution, and I see countless clients who are in a financial mess because they owe at times over $600 a month for a faulty car. I'm glad that you did not put yourself in a similar situation and paid your car loan off quickly and promptly.