Saving Money

[StartingPath2Freedom]

Hello all my name is Brian. To learn a little more about my situation you can see my intro in Hi, I am.. thread.

So I currently in a decent amount of unsecured debt that have very high interest. I decide to take a personal loan through my credit union and was able to save myself ~10-13% interest. I have taken my cards out of my wallet and currently only living on my income. This will save me at min $4300 in interest and I plan to pay it off faster than the current agreed upon terms.

I know a lot of people including David Ramsey don't like consolidation loans because if you don't change money habits there is a large chance that you will end up on the same situation all over again with more debt.

I feel that making a budget and sticking to it will prevent this from happening and taking a lot of pride in never putting myself in this situation again.

Thank you for everyone's support!

Brian

 

[Hermit]

Most folks on this forum practice LBYM - Live Below Your Means. You are taking the right steps to get there. Good Luck!

 

[ERD50]

Sounds like you are on your way, keep it up!

On one hand, Dave Ramsey is right about the importance of changing habits. But that seems like a silly reason to not get a consolidation loan. They are not mutually exclusive.

So if you commit to an LBYM budget, a consolidation loan only makes it easier, by reducing your overall payments. Why wouldn't you do that?

It's like his advice to pay off the smallest debt first - so you get that "sense of accomplishment". OK, if you need that from an emotional view, then I guess that's what you should do. But it would be far better to realize that is better to pay off the highest interest rate debt first. That is what will help you the fastest. The small debt first does not help you as much. If you are in debt, you really need to maximize the effects of the limited resources (money!) that you have.

I think Dave Ramsey may have the right approach for people who " just don't get it ". But once you get a grip on these matters, and it ain't rocket surgery, you can do far better than follow his cookie-cutter rigid plan.

-ERD50

 

[StartingPath2Freedom]

@ERD50 I agree 100%. I am extremely analytical so much so that I'm even questioning my career path. I don't need emotional support from paying off a debt in full. I obtain motivation from being able to maximize my dollar and the potential growth of that dollar in the future.

This whole path to FIRE has brought up many different things in my mind which to be honest feel like organized chaos because I can get a little obsessive. Now to harness the obsession.

 

[rodi]

Saving interest is a good thing.
Now take it one step further - don't just live 'within' your income... live BELOW your income - and put some of the savings towards the debt, and some towards savings... You'll never get ahead unless you live on less than what you bring in.

 

[StartingPath2Freedom]

Saving interest is a good thing.
Now take it one step further - don't just live 'within' your income... live BELOW your income - and put some of the savings towards the debt, and some towards savings... You'll never get ahead unless you live on less than what you bring in.

I agree and that is what I have started doing. I will be paying this loan off with approx 300 a month when the min is 200. I am investing in my daughters college fund and building an emergency fund at the same time. I'm actually living a little too below my income but I will be okay with that for future FIRE as long as I'm not miserable today.

 

[Koolau]

I agree and that is what I have started doing. I will be paying this loan off with approx 300 a month when the min is 200. I am investing in my daughters college fund and building an emergency fund at the same time. I'm actually living a little too below my income but I will be okay with that for future FIRE as long as I'm not miserable today.

Yes, you really need to know yourself. Much better to make small changes than to go all in and later give up. You DO have to live TODAY and not in the future. Balancing all of this within your comfort zone will get you to FIRE. Sounds like you basically have it figured out, so good luck and keep posting.