Becoming Financially Independent, what do I need to plan for?

[delsolkm14]

Rothman, I will look into the backdoor Roth IRA's when I get to that point. I had heard of that before, so that was the plan.

Got 2 more CC paid off. Would have paid a 3rd off but had to get 4 new tires on the SUV due to the wire belts showing on one. Life is much easier when you have the cash to battle these unexpected expenses. Before, I would have had a heart attack, $1000 for 4 new tires. Keeping some out of this check to probably put back into savings once I see how much my wife spends on a trip back to our hometown for a couple weeks.

Keep trudging along, paying it all down.

Credit cards: $15,000 - $12,700 - $12,450
Other charge accounts: $6,700 - $5,300 - $4,700
Student loans: $23,000 - $22,500 - $22,400
Car loan: $23,000 - $19,000 - $18,700
Mortgage: $154,000 - $152,000 - $151,800

Checking: $2,000
Savings: $1,000
401k: $7,200 (mis-stated almost $8k in other post, it was almost $7k)
Roth IRA/Spousal Roth IRA: $800

I know it is not like a lot of the super-wealthy on here, but still getting myself out of debt and some money in the bank is good for me. Used to have $0 or -$ before the next paycheck hit a year ago, what a difference a year can make.

 

[Maenad]

Life is much easier when you have the cash to battle these unexpected expenses.

Isn't it, though? What a great feeling!

I know it is not like a lot of the super-wealthy on here, but still getting myself out of debt and some money in the bank is good for me.

Pshaw! Damn right it's good! Congrats on your progress!

 

[delsolkm14]

Back with another update. Trying not to post too much in here (over-share), but like to show my progress... makes me wanna push harder to get it paid down and only place I can tell others about it.

Credit cards: $15,000 - $12,700 - $12,450 - $11,500
Other charge accounts: $6,700 - $5,300 - $4,700 - $4,600
Student loans: $23,000 - $22,500 - $22,400 - $22,200
Car loan: $23,000 - $19,000 - $18,700 - $17,900
Mortgage: $154,000 - $152,000 - $151,800 - $151,600

Checking: $500
Savings: $2,000
401k: $8,300
Roth IRA/Spousal Roth IRA: $1800

Still whittling away slowly. Only got $2000 paid down on the debts this month. I have three more paychecks that I am paying some other debt payments, then will have an extra $1,750 out of each check to put towards these debts, so they should start going down quickly once that happens.

 

[delsolkm14]

Well, here it is a couple months later and I wish I could say I was in a way better position than I was then, and although I do have some more in retirement, I had a temporary setback in my progress.

I just got back off my 3 weeks of R&R leave, and we took a vacation and spent a little more than originally planned and then I did some home improvement stuff while I was home that was needed, so funds took a little hit. I ended up putting some back on my Credit Cards to ensure the house stuff got done while I was home, rather than having an additional cost of paying someone else to do it.

Good news is, this next paycheck is my last with the $1750 coming out, so from here to the end of the year, should be able to pay around $10k off.... so that well help dent it all.

Here is the updated info:

Credit cards: $15,000 - $12,700 - $12,450 - $11,500 - $13,200
Other charge accounts: $6,700 - $5,300 - $4,700 - $4,600 - $4,400
Student loans: $23,000 - $22,500 - $22,400 - $22,200 - $21,500
Car loan: $23,000 - $19,000 - $18,700 - $17,900 - $17,400
Mortgage: $154,000 - $152,000 - $151,800 - $151,600 - $150,900


Checking: $500
Savings: $1,250
401k: $11,500
Roth IRA/Spousal Roth IRA: $3950

I adjusted my 401k contributions to max it out before the end of the year, and will max out both IRA's for 2013 as well.

Still making small steps towards the goal, but had a temporary pause in reduction. Full steam ahead the next few months to knock out all the credit accounts and start on the student loans.

 

[Maenad]

Good job - keep on trucking!

(That's the closest I could find to some kind of "keep movin'" smiley. )

 

[Cassius King]

Nice work. Keep the momentum going!
I'd personally like to see those loan amounts going down faster than they are. Even if it meant less in savings.
I would be paying off the cards and student loan as quickly as possible and leave your savings where they are.
My personal #1 goal coming out of this possible 3-4 year job is to be completely debt free. The savings will follow from that.

 

[eta2020]

In general marry a right person and don't get divorced.
Though I see you are already married......

 

[RISP]

Congratulations, you are on the right track!

I started paying off the CC debt this paycheck. Paid 2 completely off and 1 almost 3/4 off. Next paycheck will pay that one off and 2 more completely off and then working on the larger accounts I have.

Great job. But why in the world do you have 5+ credit cards? No offense, but you Americans are crazy. Pay off the debt, and then cut up all but one. Pay off any balance on that one every single month!

I figured it up, I am paying over $325 a month in interest alone on the CC/Charge accounts. That is so ridiculous. I can't believe I let myself get into that trap, never again will I do it.

Yep, ridiculous. Good thing you figured this out and can now change your habits.

I'd personally like to see those loan amounts going down faster than they are. Even if it meant less in savings. I would be paying off the cards and student loan as quickly as possible and leave your savings where they are. My personal #1 goal coming out of this possible 3-4 year job is to be completely debt free. The savings will follow from that.

+1

 

[REWahoo]

No offense, but you Americans are crazy.

I don't believe Americans have any exclusivity when it comes to personal financial impropriety. Das ist verrückt - und unhöflich.

 

[F4mandolin]

Guess I am just too negative....but I was wondering why you spent too much going on vacation. Depending on the vacation......could be a lot of savings.

 

[RISP]

I don't believe Americans have any exclusivity when it comes to personal financial impropriety.

Certainly not. In fact, I think they are on average doing very well. There must be a reason why it's the richest country in the world. But I'll stick to my opinion: The way many US citizens handle consumer- and CC debt is imprudent. And the way banks and corporations support this behaviour is IMO just short of criminal.

Das ist verrückt - und unhöflich.

Entschuldigung, ich wollte niemanden beleidigen.

 

[HFWR]

The way many US citizens handle consumer- and CC debt is imprudent.

Agreed

And the way banks and corporations support this behavior is IMO just short of criminal.

Some likely IS criminal. But, you know, though they use sophisticated psychological techniques to lure customers, they don't actually hold a gun to anyone's head...

Entschuldigung, ich wollte niemanden beleidigen.

Gesundheit...

 

[Mick Dundee]

You are getting a lot of well done's in this thread but its already 8-9 months you've been on the huge 180k money almost half way through the contract.

8/10/2010 Debt 208k Retirement/savings accounts 14K
22/7/12 Debt 208K retirement ?
16/12/12 Debt 222k retirement 20K
29/6/13 Debt 211K retirement 10K?
14/7/13 Debt 209K retirement 11K
7/11/2013 Debt 207400 retirement 17K

Looks like your 12k better off since the 180k contract. You put holidays back on the credits cards You can't afford a $24000 car loan, sell it. There should be no holidays till the credit card debts at least are completely paid off.

Sorry if this is harsh but the big money will end soon and you need to get a lot more serious / motivated about your situation . Good luck.

 

[Mick Dundee]

If you look at it from 3 yrs ago you are you are 3k better even though you have had 9 months of the increased salary.

 

[target2019]

Note that the 300K job is a 180K job. That still seems to be enough to pay off the credit card debt.

 

[delsolkm14]

Didn't know I had so many replies, sorry about not responding sooner.

One thing I didn't include in these calculations is that since March, I paid $13,900 towards my mortgage that was 12 months behind, $10,000 in a govt debt that I had, and $7,500 for my mom's mortgage that was 12 months behind.

That is an additional $31,000 that I have paid out since March not accounted for here.

I agree, I need to pay the CC off faster, but due to being forced to pay those other payments (the $31k), I had to push them off a little. I am done paying on all that debt, so now over 50% of my paychecks will go to the debt and only the debt listed here.

The $20k in retirement I had 7/22/12 was used while I was unemployed and in school for 7 months to help cover bills, so that was all gone way before this income started.

Since March, I have paid off over $14k towards debt, plus the $31k, and have over $18k back in retirement accounts. Not nearly as well as I would have hoped 9 months ago, but still making progress.

The next 3 months will be the months that I see the largest debt reduction now that the other debts have stopped coming out of my checks.

Honestly, we haven't been spending a whole lot extra, given the increased income. Yeah, there have been a few things we got or spent money on we didn't HAVE to have, but we haven't went over the deep end yet and won't.

 

[eridanus]

You need to get rid of the debt! That interest you're wasting could go to a nice vacation but instead it's going to a bank. Increase the payment amount on that debt until it hurts.

 

[readytofire]

Keep it up delsolkm14. This is a very interesting thread to follow.

 

[delsolkm14]

Decided to update this a couple months down the road.

Still slowly paying on the debt, things keep coming up taking the money I had planned for it. We had to have some plumbing work done, tree removal, extra propane, and a few other things this last month that took about $3k that was planned for the CC's. I will be paying $2k towards them in 2 weeks and plan another $3.5k at the beginning of next month (if no new surprises come up).

Here is where I am at now.

Credit cards: $15,000 - $12,700 - $12,450 - $11,500 - $13,200 - $11,800
Other charge accounts: $6,700 - $5,300 - $4,700 - $4,600 - $4,400 - $4,400
Student loans: $23,000 - $22,500 - $22,400 - $22,200 - $21,500 - $21,250
Car loan: $23,000 - $19,000 - $18,700 - $17,900 - $17,400 - $16,450
Mortgage: $154,000 - $152,000 - $151,800 - $151,600 - $150,900 - $149,750
Mortgage 2: $55,650


Checking: $1,000
Savings: $1,600
401k: $19,000
Roth IRA, Mutual Fund, Investment Account: $10,550

I did get $3850 paid down in debt over the last three months (with Christmas thrown in there) so making progress, but slower than I wanted. Retirement and Investments did climb by $15,000 so seeing some improvement there.

I did just get verification I am getting another contract out here, so I will maintain the higher income for at least 6 more months. Good news, now just have to continue to pay the debt down and work faster towards it.

 

[RISP]

Mortgage 2: $55,650

Please tell me you didn't get a second mortgage.

 

[delsolkm14]

Please tell me you didn't get a second mortgage.

No, that is my mom's house that I am paying for. Valued at $120k, owe $55k on it still. She isn't able to pay for it right now, so I took over the payments. I know I didn't need to add to my already excessive debt, but I could not see my mom getting put out. Since my dad passed away last year, has been hard on her, so I took it on.....

 

[RISP]

I know I didn't need to add to my already excessive debt, but I could not see my mom getting put out. Since my dad passed away last year, has been hard on her, so I took it on.....

Sorry to hear that. I understand that you want to help your mother. Still, I hope you can keep your plan to pay down $5.5k of CC debt in the coming weeks.

I did just get verification I am getting another contract out here, so I will maintain the higher income for at least 6 more months. Good news, now just have to continue to pay the debt down and work faster towards it.

This. Congratulations, you have all the means to get out of debt. USE THEM!

 

[delsolkm14]

I should be okay with the added mortgage... It is only $375 a month, so not a large expense, but does cut into some funds for payment to debt.

My father passed away from terminal cancer and some of the bills took a toll on them, I only recently found out they were behind on the house so I came to a deal with my mom that I would take over payments and catch her up on past due, and then I would own the house.

Not ideal to not have the mortgage in my name, but that is something I will look into in the future after i get this debt paid off.