Most debt pay down articles will tell you to use a cash envelope system or stop drinking Starbucks, which I do agree with (kind of), but they usually don’t tell you about a secret weapon you haven’t considered to pay down your debt.
This secret weapon can actually accelerate your debt pay down and simultaneously chop a large portion of your debt off your bill.
If you haven’t guessed it yet, go look in your garage.
Sell Your Car to Accelerate Financial Freedom
Before you label me certifiably crazy, consider this: car ownership among adults under 25 has consistently declined since 2007.
If you choose to get rid of your only or second car, you wouldn’t be alone. More and more millennials, especially those in busy urban centers are choosing to walk, bike, uber, or take public transportation.
Personally, my husband and I have made this decision twice as we paid down our debt. When we first started living together, we each brought a vehicle into our household.
Since my husband was taking public transportation to and from work every day and we went to most non-work destinations together, we found that our second vehicle often sat parked.
We chose to sell my husband’s baby blue '88 Oldsmobile – I’d be lying if I said the only reason that retiree cruiser left was for financial reasons!
When we ended up buying a new vehicle that we found a great deal on, it didn’t take long for us to sell our 10-year-old Mazda and throw that big chunk of money towards debt.
Getting rid of a vehicle not only provides funds to apply to your debt if you own it, but you’ll saving in other areas like:
- Car insurance
- Car repairs
- Car wash
If you don’t own it, you free up your car payment or lease payment each month to apply it to debt.
It’s a huge win either way. Have you ever gotten rid of your car to move ahead financially? What advice would you give to others who are considering it?
Tell me in the comments below.