I have been thinking this weekend on the best and most strategic way to get debt free.
I first thought that I would use an extension of my snowball method. That is, pay the truck off first (12 months) and then focus on the trailer (18 Months).
Since I have decided that I will build up and maintain that contingency fund first (4 months) that pushes this whole plan to a total of 34 months.
This timeframe got me thinking, since there is only three years (36 Months) left on the truck anyways, why not focus on the trailer and then on long term Savings after that, all while letting the truck loan run its course.
Here is a chart to compare the two options before me. These months include this month (January).
|Option A||Option B|
|Phase Name||Months||Phase Name||Months|
|Total Months||36||Total Months||36|
As you can see, Option B makes the most sense, and certainly so financially. It just goes to show that you don’t always have to pay debts off fast and early. In this case, letting the truck loan run its course makes the most sense.