Money modding or paying off the taco.

Most my other vehicles were modded within the first few weeks I had them. I'm leaving the Taco stock for now until it's paid off. That way I can make all my mods at once and it'll be almost like I jumped into a new truck.

 

Lots of good advice in this thread....the best being to kill credit card debt if you have any! I'm "old school" and don't like owing money so long ago started saving for the next vehicle rather than making payments so have pretty much bought every new vehicle in the past 20 or so years outright.....but there is a downside to all of the double payments and such also....every once in a while you need to do something for fun, so go ahead and do some mods....lots of things you can do to make the truck yours that don't take big $$$. Play around and do some small stuff to keep you in a "Happy Mode" until you get it paid off, and then do the major stuff. Depending on finances, pay your bills, fund an IRA, put some away for a rainy day fund, and if you have extra left over, then put it towards the extra truck payments. Don't short change yourself and your financial security simply to pay off a vehicle.

 

Well Put. With the current super low interest rates, there is no upside to having equity in your Tacoma or having it paid off early.
Think of it this way...you plan to pay off your Tacoma in 2 years. Instead of paying the bank those extra payments...put those extra payments toward some sort of investment (money market, bonds, index fund)..and when 2 years comes around...you can either pay off your truck at the exact same time you would have by making extra payments (Plus having extra money left over from interest you earned)...or you can spend that money on something else and continue making your payments as scheduled...and have a lot of savings. Why give the bank money early...so THEY can be making interest off it, instead of YOU?

I understand nobody likes having a car payments, and you constantly hear its bad to have debt....but as someone else mentioned, you have to balance everything and take an "Adult Look" at your own situation. Put the 2 situations down on paper with a schedule...and you will see what makes the most economic sense.

Making extra payments
Paying off your Tacoma - you are "Zero-ed Out" You own an asset that is depreciating (great Tacoma resale value aside). You now have equity in something you can not borrow against and has no liquid value (You cant use your Tacoma to pay for anything else without having to sell it)....and everyday you drive it...it loses value.

Making regular payments
You make regular payments and invest your extra money in something making 10% You are still paying the bank 2% but you are gaining 10% - you are basically coming out ahead 8% (Basically)...and you now having a very liquid asset that you can choose do spend however you want...pay off the Tacoma, Mod the Tacoma, down payment on a house, vacation, buy the wife boobs, whatever.
Just another perspective. Take all factors into consideration and do what is best for you...but review all the facts. Good luck on your decision.

 

^^^^^ X2

My tacoma is the first vehicle (first thing really) that I financed. I really hated the idea of having debt and a payment obligation, but tacoma! Originally I planned on paying it off as quickly as possible... but I gave up on that in favor of saving on higher interest, higher liquidity things. Plus mods. I really really enjoy all these mods. Being a responsible adult is boring.

 

Sounds like you have a good financial plan in place already. Getting it paid off in 2 years is FANTASTIC!

I hope you're paying extra money towards 'principle' and not just handing over extra payments???

In your situation, where you're ahead of the game - you can afford to treat yourself with a modification (if it makes you feel good). However - if your more inclined to feel 'anxiety' because of debt....then put the money towards paying it off.

 

Pay it off, then drop a load of money into mods.

 

This is a good thread. Keep the good advice coming. I could use all the insight from more experienced financially stable adults here. Especially with the incoming uncertainty of the current job market.

 

paid mine off this month, but before that I would set aside the $ for a mod before I actually bought things. besides the lift, ive held back on alot of mods for awhile myself. but now that hes all paid for im seriously in the modding frame of mind again.

edit: but you have found TW, so your chances of being able to NOT mod your truck are shrinking rapidly...

 

Lots of good advice here. Some people are more comfortable with debt than others. It really sounds like you have a good plan to pay off your truck in a very short time. My advice is to always make a payment. Make your regular payment if you come up short one month and pay extra any time you can. If you can pay it off in 2 years, fantastic. If it takes you 3 years, that is still great. Always remember that mods can wait, and keep taking care of business.

By the way I hope to pay off my 2012 this year, 1 year, 4 months early.

 

Not at all... I want some OME BP-51's

What's your interest rate OP? If you have a low interest rate It's like free money!
I'm around .9% which over 5 years is about $12/mon $700 total...

MOAR MOD's!!

 

Agreed.

Agreed, with the substitution of 'below your means' for 'within your means'.

To me 'below' means you are saving for the future....... which not enough people do enough of.

To the OP, pay it off. If you have a repair or maintenance that needs to be done, consider doing that work with upgraded parts. At that point at least you are 'reducing' the net mod expense. Example. Wear out your stock tires? Upgrade the replacements.

 

Its good to hear a lot of you young fellas just starting out in the world are trying to make some good financial decisions and planning ahead. So many people I know both in their 20s and 40s (that make good money) are living the dream/high on the hog....but also living paycheck to paycheck and drowning in debt. One hiccup and they are done. They just make one stupid financial decision after the other...spending away like no tomorrow.
When I was just starting out...I had nothing and didn't know anything about personal finance. and I just wanted to live comfortably and not go to bed worried about money every night. So there were some guys at work in their 30's/40s, they had fancy cars, beautiful homes, ranches, boats, went on exotic vacations...and I flat out asked them how did they get where they were at...because I wanted to have nice stuff too when I am their age.

Every single one said...you have to have your money work for you....you will never get ahead by earning a paycheck. The key was making money by not doing anything......saving and investing.

Start out with very short term goals. For example...if you can put away $5,000 making 10%...that is $500 you can use for Christmas money (Mod Money). Next year set your goal...I want to make at least $100 a month from my investments....$1,200 a year not doing anything. So on and so forth. Eventually my goal was to make more in investments in 1 year than what my first year's salary was.

Anyway, by making the right decisions, I was eventually able to buy the cars I wanted, put together a 20% down payment on my house, etc. Now, by refinancing my house, putting away the max in my 401K...I am hoping to retire early. And its hard when you are in your 20s...first you want a new truck, then a nice apartment, then a house, then a girl comes along and things get serious...and of course you always want go out on the weekends and have a good time...and all that costs money. Obviously, keep your credit in good shape and don't get some random girl(s) pregnant.

Try to find a local mentor, to help guide you. Whether it be a co-worker or relative, they will be impressed you have taken a interest in personal finance. It takes discipline (and I know you young military guys have that), but if you make it your priority...it will pay off.

 

Deleted my post/rant

 

Paid off means no more high priced "full coverage" insurance payments!

 

So you wouldn't carry full coverage on a truck that's worth $15-$20k

 

It really depends on your situation.... most of us will always have some form of dept. I have my house paid off (paid off early as my priority) I have two cars paid in full and put $$ aside for investments but I wanted a Tacoma. I purchased my truck through a 5 yr loan but added the mods that I wanted and I now have my mobile dog kennel I paid cash for my mods and now I will look to pay the truck off early.....along with my daughter's university tuitions..... It really never ends!

 

I'm a big fan of mods as parts wear out. You paid for that stock suspension, tires, etc so midaswell use them up before buying new ones and throwing the old ones out. I've had my truck 3 years and I just lifted it b/c the stock suspension was shot. It had new tires when I bought it and they're just about toast so this spring I'll go for new/bigger tires.

Plus then you can justify it to yourself as "well I had to replace it anyway so I just got something alittle better"

 

Are you planning on staying in the Army ?

That'd be my deciding factor.


In reality... read my signature before you take my advice

 

Or sell your stock parts and upgrade right away!!