First Small Step To FI

[bexrayx91]

Me and My wife have completed our first step to financial independence. Today was the day we finished paying off two of our credit cards. We are on track to pay off all our debt within 21 months. It's a small step for most but feels like a huge win in the BeRay Household.

[SwordGuy]

Congrats!  It feels good to be moving in the right direction, doesn't it?

You might consider putting some numbers up in the recommended case study format.  There are some very smart folks on this forum, they might be able to help you cut that 21 months substantially!

[bexrayx91]

Income-
Me-1700
Wife-1500

Expenses-
Rent-711
Power-53
Insurance-189
unmustachian car loan-292/month w/ 14000 left
unmustachian financed wedding ring-260/month with 3000 left
cc me-25/month with 564 left
cc wife-25/month with 588
Cellphone-200

Assets- No assets worth posting at ages 21(me) and 19(wife) respectively, we're just starting out.

The plan as of now is to pay lowest balance debts off first while snowballing the money toward the next debt as they get paid off.

[footenote]

I must disagree with you. This is not "a small step."

This is the step that begins the Insanely Successful BeRay household journey to FIRE. You Go, BeRay Household, You Go!

[sunshine]

Congratulations!!!!!

[Stackfault]

+1 on that not being a small step.  That is HUGE!  It's both a big accomplishment and a landmark shift in behavior.  Congratulations!

[2527]

Great accomplishment!  You're really in pretty good shape...some more credit card, a car loan and a ring.  Some people have $100,000 of debt to shovel out of.  Good luck! 

[bexrayx91]

We were lucky to start out "early". With our old spending habits it could have easily been 10's of thousands of dollars. Thank goodness for mmm punching me in the face and telling me how irrational I was being.

[Phoebe]

Congratulations that is a huge accomplishment!  I didn't start paying of my debts ($65K in total) until I was 24 and now we have a networth of over $500K 5 years later.  You are way ahead of the game, please keep us posted on your progress!

[bexrayx91]

Will do:) I can't even imagine a net worth of 500,000 right now, but it'll be here soon enough.

[meadow lark]

Good job!   You are doing fabulous.  I think it is reasonable to consider selling the car - but not the ring.  Jewelry depreciates so fast after it is bought, I doubt it would be worth the possible reaction by your wife to that suggestion!

[bexrayx91]

Thanks for all the encouragement in here. As far as selling the ring goes, it would not be wise to bring up that idea. The car we're underwater on as it was a very recent purchase.

As I posted earlier i was able to find a much better deal on insurance dropping it to 142 (speeding tickets caused it to be higher than the initial quote) for auto and renters combined.

We have begun looking into getting a cheaper cell phone plan.

I will keep this thread updated with progress, and thanks again for the encouragement.

[2527]

You're going to do well.  Please comment on your progress. 

[kms]

Congrats. I remember that amazing feeling. The day we finally became completely debt free was one of the greatest days of our lives.

The amazing thing though is that even if you're not completely out of debt yet every small step will lead to a fastened pace towards the next small yet marginally larger than before step. First, you pay off your credit card debt. That gives you some extra cash to pay off student loans. That, in return, gives you even more extra cash to pay off car loans or other debts.

[aj_yooper]

Congratulations!  Whichever choice you do, you are on a winning path.  Good job.

[dude]

yeah man, the fact that you even recognized the problem, nevermind took action on it -- at age 20(!)* is pretty extraordinary!  You are well on your way to good things if you hold to this way of thinking.

* I averaged 21 and 19!

[bexrayx91]

Today, I increased my LOC limit to $1000 for emergency purposes. Also this has a $0 balance now so i'm still getting more and more debt paid off, and at a much quicker rate than expected.

I also opened up a visa with my credit union at an 8.25% interest rate and did a balance transfer so that the ring is now at an 8.25% interest rate as opposed to the 23% rate it was at before.

I can't wait to be out of debt and to start investing. Thank you guys for all the support.

[2527]

Those are great actions.  Maybe you could start reading a couple of books about investing so you are more informed when you have cash in hand to start.

[bexrayx91]

This week i have read A Random Walk Down Wall Street, and am half way through The Warren Buffett Way. I am definitely doing everything i can to prepare myself intellectually for investing.

[2527]

Perfecto!

[bexrayx91]

Quick Update: We have now paid off all cards except the ring which i transferred to a credit card through my credit union at an 8.75% interest rate.  So now we are down to that and the car which got refinanced to a 3.5% interest rate. Almost Debt Free!