Want to Pay Off Your Car in 2022? Here's How

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KEY POINTS

  • An auto loan can be a drain on your finances.
  • Spending judiciously on non-essential expenses and boosting your earnings could be your ticket to getting rid of that loan by the time 2022 ends.

These moves could be your ticket to knocking out your auto debt.

Some people own a vehicle because it makes life more convenient. Others own one because they have no choice -- they live somewhere without public transportation.

No matter which scenario you fall into, if you weren't able to buy a car outright, you may still be in the process of paying off your auto loan. Car loans are considered a relatively healthy type of debt. That's because vehicles are generally considered a necessity, and if you pay your auto loan on time every month, it could actually help your credit score improve.

But what if you're tired of those monthly auto loan payments hanging over your head? The sooner you get rid of them, the easier it'll be to meet other goals, whether it's boosting your savings or socking away money to buy a home. If you're eager to rid yourself of auto debt in 2022, here are two essential moves to make.

1. Rethink your non-essential spending

We all have monthly bills that aren't negotiable -- things like rent, groceries, and utilities. But if you have expenses you spend money on that aren't necessities, like cable TV, restaurant meals, a gym membership, and concerts, then cutting back in those areas could be your ticket to paying off your car by the end of 2022.

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Take a look at your monthly expenses, and within the realm of non-essentials, set some priorities. It's not reasonable to deprive yourself of every single luxury you enjoy. But you may decide that while you don't want to give up eating at a restaurant once a week or seeing your favorite band perform, you're okay with canceling your gym membership and downgrading your cable plan to eke out extra cash to pay off your vehicle.

2. Boost your income with a side hustle

You may only have so many expenses in your budget that you can cut. But if you're intent on paying off your car in 2022, boosting your earnings with a second job is a good way to meet that goal.

These days, there are numerous side hustles you can choose from. Many businesses are having difficulties hiring workers, so you may have plenty of options for picking up evening and weekend shifts at local establishments.

Another avenue you can explore is a side hustle you do on your own terms. In fact, you can turn the vehicle you're trying to pay off into a cash source by signing up to drive for a ride-hailing service. The money you earn shuttling passengers all over town could help you get rid of your auto loan before 2022 ends.

Many people have car payments to grapple with, and if you keep up with those payments, they won't damage your credit (quite the contrary -- they could help your score). But still, there's something to be said for shedding a monthly obligation. If you're motivated to pay off your car in 2022, rethinking your spending habits and getting a side hustle could make it possible to meet that goal.

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