Author Topic: Step 1, dive in head first. Step 2, research swimming.  (Read 2222 times)

Northaholic

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Step 1, dive in head first. Step 2, research swimming.
« on: December 15, 2017, 05:42:31 AM »
Hello Everyone,

I think a lot of people can relate to me when I say, "Wow, I should have started earlier." But I am positive I am not too late to this party. I am 25, single, have two jobs, and trying to make up for lost time.

When I do things... I tend to jump in before I know which way is up. I think struggling at this point is my comfort zone. Mustache is where I want to go, but here is what I got myself into, in the meantime.

-18k left in student loans with a A.S degree to show for it.
-18k left on a good car, after the previous 3 died within a 1-2 years of owning them.
-In the process of purchasing a house for 45k (1,200sqft/good condition)
-My credit card floats about $1000 on average for bills.
-I own a little over 6k in firearms.

On the whole, I believe in this day in age, I am not doing too bad comparatively. Mustash-ish-ly, my life is on fire, I cant find a bucket, and my mouth is dry.

On the other hand:
I started putting money automatically away in each check into a bank account, out of sight, out of mind.
I have started using an investment app to aggressively keep myself poor so I don't spend anything.
I put in 10% of my check into a 401k with a 3% company matching
I have banned myself from buying more guns.

The tricky part:
Now that the dust is settling, I am getting a home put together and trying to get everything consolidated on the best interest rate.
-Mr.Money.Mustache made it very clear that debt is the ultimate enemy. This is my first goal. Be debt free.
-I will be living in an artic tundra, with a 60 mile a day commute, for a little over $15/hour.
-I have been reading about all the amazing tips everyone keeps posting on here.

Where, What, When, Why, How?
- The $5 dollar win. This is a struggle area for me. But the impact is huge.
- Misc. subscriptions. The little leaches that such all my money without me noticing.
- Impulse buying. Put it into a savings account instead.
- Home made meals and my weight in sandwiches.
- Trimming the fat, what can I sell to get some money back?

Does anyone have any 1-2 year goals/best practices that really helped them out in these kinds of situations?

boarder42

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Re: Step 1, dive in head first. Step 2, research swimming.
« Reply #1 on: December 15, 2017, 05:55:53 AM »
So for starters debt isnt bad when its good debt.  and by goood debt i mean a low fixed rate -

Your car debt is bad b/c thats a way too expensive car. dude you make 15 an hour that car is over 50% of your annual income its insane and should be sold for something cheaper and more economical.

Your SL debt if fixed could be good debt to hang on to and take the federal deduction on but we'd need the interest rate.

Your Mortgage debt is by far the best debt you can hold in the US - assuming you're in the US b/c of the guns.  its a fixed rate for 30 years so its usually best to keep that to term. 

Now that we've got the debt issue out of the way. - please dont consider all debt bad it can be good.

you would probably due best to put together a full case study for us b/c you're missing alot of data here.

Reynolds531

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Re: Step 1, dive in head first. Step 2, research swimming.
« Reply #2 on: December 15, 2017, 06:23:52 AM »
I would challenge you to sell one gun...for a profit. You can keep your hobby but it must pay for itself.

Also the commute must be drastically shortened.

Finally you should be able to tell us your savings rate. Once you know that focus on bringing that and your income higher.

terran

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Re: Step 1, dive in head first. Step 2, research swimming.
« Reply #3 on: December 15, 2017, 06:51:07 AM »
Sell the guns. keep one if you want because "self defense" or whatever, but no one NEEDs $6k worth of guns.

Like Boarder said, consider selling the car.

Why do you commute 60 miles for a $15/hour job? Can you buy a different house that's closer to your job? Can you get a different job that's closer to the house you're buying? Can you move to an entirely different location with houses and jobs closer together?

frugaliknowit

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Re: Step 1, dive in head first. Step 2, research swimming.
« Reply #4 on: December 15, 2017, 11:55:39 AM »
Ditch:

1.  Car loan.
2.  Clown commute
3.  All but one gun.
4.  All but 401K match (pay down debt with difference).

Lews Therin

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Re: Step 1, dive in head first. Step 2, research swimming.
« Reply #5 on: December 15, 2017, 12:04:43 PM »
Read up on case studies on the forum, create one, list everything in the format given, and you'll get plenty of advice, from the simplest (hey this is too much) to the most long-term and convoluted tasks.

Start taking down absolutely every payment you are making to figure out where your money is.
Sit down and take a day to look at all your expenses: It'll end up paying you more than 15$/Hr long-term.
Is renting better than owning in your area? What is the % on your debt?
Why do you have guns? Self defence/collection/hobby? Are they all necessary?

Case study. A lot of info is missing that we could use to help you out.

lbmustache

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Re: Step 1, dive in head first. Step 2, research swimming.
« Reply #6 on: December 15, 2017, 12:05:56 PM »
Ditch:

1.  Car loan.
2.  Clown commute
3.  All but one gun.
4.  All but 401K match (pay down debt with difference).

Yeah, if you're truly serious about this, pretty much all of this needs to go. Most important is the car... I agree that your car appears to be astronomically priced compared to your income especially considering the student loan. Maybe things are different in the arctic tundra (is this Alaska? Canada? I'm going to assume Alaska.) but that seems pretty low given that groceries etc. cost a fair amount more in Alaska. $15/hr full time is less than $36k a year, no?

I don't think you need to ditch the guns if you can dump the car. Even if you sold them, you'd still have a fair amount of debt.

KelStache

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Re: Step 1, dive in head first. Step 2, research swimming.
« Reply #7 on: December 15, 2017, 03:23:18 PM »
For the people asking Iím guessing US, not Canada (house price / 401k / miles)

I think youíve got some great starting points here, and if you want more info Iíd second writing a case study.

dreams_and_discoveries

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Re: Step 1, dive in head first. Step 2, research swimming.
« Reply #8 on: December 15, 2017, 11:49:15 PM »
Wow - this is the first time I've seen firearms listed as assets, and as the largest asset class you own?

Second the calls to consider selling some guns, downsize the car and maybe post a full case study?

EricL

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Re: Step 1, dive in head first. Step 2, research swimming.
« Reply #9 on: December 16, 2017, 01:06:28 AM »
If you truly live in the boondocks a good gun can pay for itself by putting food on the table.  If you love, love, love guns $6k worth of them is fine. Or maybe not enough!  Generally the Forum consensus is a single expensive hobby is OK as long as itís not ruining your finances all by itself. But if the guns  were mostly impulse purchases, parting with most of them to pay off debt is ideal. 

As mentioned, the car is worse.  And the credit card only does you favors if itís a reward card and you pay off the balance every month.  Otherwise itís a shitty flaming Phoenix nesting in your hair. 

Donít bust your own balls about late starts and all that. Youíre doing fine.  Quite a few Forum members that are FIREíd got later starts than you. 

Laura33

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Re: Step 1, dive in head first. Step 2, research swimming.
« Reply #10 on: December 16, 2017, 06:16:14 AM »
Immediate goals and best practices?  Number one would be do not buy a house that locks you into a long-ass commute.

Number two is ditch the car.  It costs way too much for your income.  And that long-ass commute is going to depreciate it like a rock.

Conceptually, the primary lesson is donít buy luxuries that you canít afford to pay for in cash.  Youíve got the right idea with putting money away first so you donít have a chance to see it; but the other half of that is denying yourself access to borrowed money to buy that same stuff.  And yes, a car may be a necessity, but the expensive car is a luxury.  Youíre young, you have plenty of time to do great if you just keep that in mind.

Other than that, post a full case study, and we can give some more specific advice.

kpd905

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Re: Step 1, dive in head first. Step 2, research swimming.
« Reply #11 on: December 16, 2017, 06:49:56 AM »
If you assume that driving will cost you about 30 cents per mile, your 60 mile commute will cost you $18 a day, which is 15% of your gross pay.  After subtracting taxes, you are probably spending close to the first 2 hours of each day just paying for the drive to work.

meghan88

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Re: Step 1, dive in head first. Step 2, research swimming.
« Reply #12 on: December 16, 2017, 02:48:39 PM »
If you assume that driving will cost you about 30 cents per mile, your 60 mile commute will cost you $18 a day, which is 15% of your gross pay.  After subtracting taxes, you are probably spending close to the first 2 hours of each day just paying for the drive to work.

"Normal is getting dressed in clothes that you buy for work, driving through traffic in a car that you are still paying for, in order to get to a job that you need so you can pay for the clothes, car and the house that you leave empty all day in order to afford to live in it."
- Ellen Goodman