Author Topic: Was 112k in debt a year ago...  (Read 1757 times)

samhh

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Was 112k in debt a year ago...
« on: May 30, 2019, 10:00:55 PM »
Net worth over the past year
Date.    Net worth
5/6/18   -112000
9/18/18   -96500
12/16/18   -90125
12/31/18   -85900
1/30/18   -82680
2/28/19   -80265
3/28/19   -78374
4/29/19   -$74,193.24
5/31/19   -$71,687.73

Overview
Got done with college and had 112k in debt and a degree that didn't really help much. Ended up with a very good resume, but my degree was in Kinesiology and I got into banking. I have a personal/group workout training business that is on pace to make me 6-10k this year, along with my bank job that'll make me about 40-42k and has some nice benefits. I've also just started bank account and CC churning.

Debts
4.5k loan @ 7% interest
23.5k loan @ 6.8%
24.5k loan @ 6.3%
29.7k loan @ 4%

Assets
1.5k in 401k
3.5k in checking/savings accounts
4.1k in roth IRA
1.6k in HSA

Expenses
I live at home and my parents are paying for food, insurance, phone etc. Basically I pay for gas, student loans, and food when I visit my girlfriend or we go on dates. All in all I spent about 5k last year and will most likely have to spend about 4k this year.

Goals
First I want to max my HSA. Then contribute to match in 401k. I want to slowly add about 1k into the Roth because it gives some flexibility. Besides that I throw the rest, about 85% of my net pay, towards my loans (obviously trying to pay off my 7% loan first). My plan is to do this again this year to try to get rid of two loans and only have about 53k in loans left. At that point I will have paid off 3 24k loans and will have some breathing room. At that point I will reevaluate whether I want to push through, live at home for a third year and pay off my last high percentage loan or save up for a house hack, or front load my retirement by investing about 40k. Wondering if this makes sense to everyone?

iluvzbeach

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Re: Was 112k in debt a year ago...
« Reply #1 on: May 30, 2019, 11:11:33 PM »
Iím not going to write an in-depth response but just want to say ďWow!Ē You are definitely off to a great start and what youíve accomplished is quite impressive. I very much look forward to future updates from you.

marty998

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Re: Was 112k in debt a year ago...
« Reply #2 on: May 31, 2019, 02:24:50 AM »
You're doing the right thing. So many people look at a six figure debt and think it's the end of the world and they'll never pay it off, but you have already knocked over a third of it in a year and could be done completely in a further two years.

Once you are finished paying it you'll hopefully have spent two years gaining experience in your job and are looking to progress your career and get pay rises.

The brilliant thing to look forward to after paying it down is that your well developed habits will mean the surplus $35-$40,000 a year will be easily be popped into savings or investments, and you are unlikely to feel like you are "missing out" on spending it.

Good luck, carry on, and update us regularly :)

UnleashHell

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Re: Was 112k in debt a year ago...
« Reply #3 on: May 31, 2019, 04:24:30 AM »
doing good and best of all  - you got a plan!!

I'd suggest adding to your 401k up to the match first  - free money. then to the HSA.

after that focus on debt reduction - you'll be free before you know it.

keep track of your progress because it can start to be a bit grim if your investments drop. if they do then just look back on your progress track to confirm you are on the right course.


Will your bank pay for relevant training/ mba? could be a good way to boost your income long term.

samhh

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Re: Was 112k in debt a year ago...
« Reply #4 on: May 31, 2019, 04:42:43 AM »
Thanks everyone! Unfortunately, because I have a medical background I don't have the relevant prerequisites for an MBA.

mies

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Re: Was 112k in debt a year ago...
« Reply #5 on: May 31, 2019, 05:12:23 AM »
Nice job on knocking out that debt. If your parents are cool with you living with them and continuing to pick up some of your expenses, take advantage of that until you are out of debt. Being able to get out of the house debt free will take a lot of the stress out of being out on your own initially.

As someone who rushed into buying a house in my 20ís, I would recommend taking your time on a house purchase. They Require a lot more work and money than you think they will. A house isnít an investment unless you are renting it. You will also want to make sure you can afford to buy in a decent area. Waiting until you have a good down payment or enough to buy one cash will help with that. You will have enough time to figure out what part of town is a good place to plant some roots.

tamuaggie2011

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Re: Was 112k in debt a year ago...
« Reply #6 on: May 31, 2019, 07:14:35 AM »
To echo what previous posters said Definitely a good start and keep it up!!

I also agree I would contribute to your 401k up to the employee match. Never pass up free money!!

I think you will be further motivated too once that initial 7% loan is paid off, it will feel like one massive weight off your shoulders and you'll definitely begin to power through the rest.

Best of luck and keep us updated!

Tuskalusa

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Re: Was 112k in debt a year ago...
« Reply #7 on: May 31, 2019, 09:14:08 AM »
On the MBA.  If you choose to go that route, your demonstrated ability to manage money and your work experience (banking, business owner) will go a long way. You could look at community colleges to take some of those missing classes, as well (calculus, accounting, economics).

Not saying that you have to get an MBA. Just saying thatís itís not off the table as something to pursue, if you wanted to go that route.

Indio

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Re: Was 112k in debt a year ago...
« Reply #8 on: May 31, 2019, 12:54:49 PM »
Good for you paying off so much so quickly. I understand why you want to focus on the 7% debt but that is so low now that the 6.8% loan might be a better use of your payments. Just eyeballing, without running numbers, made me think that the 6.8% is probably costing more in monthly interest payment than the 7% debt at this point. I know there is the psychological beneft of having one loan totally knocked out.
When it comes to 401k make sure you put in enough to get corporate match.

mistymoney

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Re: Was 112k in debt a year ago...
« Reply #9 on: June 01, 2019, 10:02:41 AM »
You are so doing great with this payoff.

Kudos!

I also say - do 401k to the match at least.

samhh

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Re: Was 112k in debt a year ago...
« Reply #10 on: June 02, 2019, 12:29:13 PM »
Sorry I should clarify, I go to the match in the 401k. That is something that I will always do, therefore I don't really think of it as a goal, kinda just a baseline! But from there I will max the HSA, etc.

SwordGuy

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Re: Was 112k in debt a year ago...
« Reply #11 on: June 02, 2019, 03:06:24 PM »
Thanks everyone! Unfortunately, because I have a medical background I don't have the relevant prerequisites for an MBA.

Make the argument that with your side business, you've got some of the basics down already.   It doesn't hurt to ask.
(But read a few undergrad business textbooks first so you'll have more of the lingo.)

kei te pai

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Re: Was 112k in debt a year ago...
« Reply #12 on: June 03, 2019, 03:48:49 AM »
Hope this doesnt sound offensive, but are you pulling your weight at home? Doing the laundry, some meal prep, yard work etc? Contributing as an adult to the running of the household, even if the money side is being covered?

Your financial progress is great, and I applaud you for it. I just have a few qualms that you are being insulated from some of the life skills and budgetting etc involved with independent living.

tamuaggie2011

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Re: Was 112k in debt a year ago...
« Reply #13 on: June 03, 2019, 07:06:48 AM »
Hope this doesnt sound offensive, but are you pulling your weight at home? Doing the laundry, some meal prep, yard work etc? Contributing as an adult to the running of the household, even if the money side is being covered?

Your financial progress is great, and I applaud you for it. I just have a few qualms that you are being insulated from some of the life skills and budgetting etc involved with independent living.

This is phrased incredibly poorly. While living at home does prevent someone from learning about all the hassles involved with adulthood it doesn't mean he is completely being a bum. That said I do think it would be a good idea to try and develop all kinds of life skills and take the opportunity to ask your parents about common issues they have had to deal with. From your previous messages it definitely doesn't sound like OP is being a lazy bum at all.

Simpli-Fi

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Re: Was 112k in debt a year ago...
« Reply #14 on: June 06, 2019, 09:56:37 AM »
Agreed.  Get the match for 401k and start saving to move out the comfort of the nest.

Outstanding work over the last 12 months.  I hope to come back here in 12 months and read you have your own place and pay your bills.

Build something for your parents, they deserve it!