The debt you see there is what's remaining on our 3.95% auto loan on our '06 Accord. My goal is to have that loan gone, and thus be debt free (except for the mortgage) again, by December of this year at the latest. If I can accomplish this, I will have paid off the five-year note in just under three years.
In reality, though, I'm shooting for a Debt-Free October. Or sooner.
I'm pretty sure I can make it happen — especially given the fact that we've not yet received our snail-mailed $1,500 economic stimulus check. I've already earmarked that check for auto-loan debt paydown. Much to the chagrin of Congressmen and -women ... and guys named George W., I'm sure.
But perhaps the question begs: We have more in liquid funds than we have in debt. So why not pay the debt off now?
There's Value in Comfort
Personal experience has taught me that I don't do well when my bank accounts are sparse. That's why I could conceivably wipe out our car loan tomorrow, if I wished.
But I don't.
The thing is, you see, that I'm a worrier. When I know there's not much in our savings, my mind runs with the "what-if" ideas full-tilt and 24-7. I wonder what emergency's about to crop up that will require the money I just spent on something else (debt payoff).
Alternator on my truck comes apart?
Major home-roof leak?
Laptop decides to power down ... for eternity?
All could happen. So in times like this, for my own personal sanity, I choose liquidity. But it will still allow me to reach my paydown goals. I'm basically paying a bit of interest (the difference between my car loan @ 3.95 percent, and our savings @ 3 percent) in return for a bit of mental peace.
It's a tradeoff I'll take, for sure.