Author Topic: Bearded 29 Year Old In Need Of Some Mustache Help!  (Read 6360 times)

diesel

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Bearded 29 Year Old In Need Of Some Mustache Help!
« on: February 06, 2019, 06:22:05 AM »
To be clear, I have a literal mustache with my literal beard but I need to call on all of you with moneymustaches for help.

Some quick background - I am a 29 year old Lean Manufacturing Manager who lives in Tennessee with my girlfriend.  I have ben interested for personal finance for years and have progressively gotten more serious about it.  I graduated college with somewhat significant debt and have been working to get it down.  I started a new job a year ago and in the next month I am receiving my first bonus.  This really got me re-thinking my plan and my current path.  I've never had a sum this big (10-12k) to save/invest/pay debt so I am looking for advice on how to move forward.

Admittedly, we are not as mustachian as we could be but we are working on that.  Being an engineer, I can't think without a spreadsheet so I created a very rough and dirty one to post here that shows some figures.  As you can see it doesn't have all my personal expenses listed yet but I think it has enough to help with the questions I have and provide some general advice/encouragement from all of you smart and kind and good-looking mustachians. (Flattery works right?) 

I have been somewhat following the investment order as you will probably gather from my spreadsheet.

My main questions are as follows:
Am I totally dumb? (jk...but really)
Should I not be maxing my HSA and Roth IRA until I pay more debt down?
With my Bonus, should I throw it all at my high interest loan?  Should I increase my emergency fund?  Should I dump sums into my Roth/HSA in the interest of freeing up cash-flow throughout the year (thus using the extra cash-flow towards debt)?

I know I have a long ways to go but I would love to get some smart eyes on my situation now and I'm open to any advice I can get.

I will attach the aforementioned dirty spreadsheet.

Thanks in advance everyone!



« Last Edit: February 06, 2019, 07:28:32 AM by diesel »

RWD

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #1 on: February 06, 2019, 06:51:09 AM »
It sounds like you were reading the Investment Order post. Definitely a good place to start.

You are not totally dumb.
You should probably tackle the 7.25% debt before maxing HSA/401k unless you can refinance it. At your income level the [traditional] 401k is likely more advantageous than the Roth IRA.
You should allocate a bonus the same way you would any other income. I think putting it towards the 7.25% interest student loan makes a lot of sense.

MrThatsDifferent

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #2 on: February 06, 2019, 07:20:01 AM »
You need to post your expenses so we can see where your money is going and what you have left over to work with. Agreed with above to knock out the biggest loan with the ugly interest rate as soon as possible. I’m not a loan expert, either you can refi, or consolidate or kill. You’ll have to research those options and work out which is the best. You’re young still with a good salary, if you can kill the big loan, you could snowball the others as you build your savings and investments.

diesel

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #3 on: February 06, 2019, 08:05:33 AM »
Thank you both for your replies.  I made a slight update to the spreadsheet to show current 401k contributions.  I am on track to be debt free in ~3-3.5 years.  Faster if I were to stop contributing to my HSA and Roth IRA.  Due to the fact that I won't carry the debt for that long I need to run numbers to see how much re-financing will benefit.

Additionally it looks like I may be able to refinance that loan down a little but the question still persists - Put investing completely on hold and dump it all to debt?  My biggest fear is missing out on those 2-3 years of compounding/contributions.

I am working on my personal finances as well so I will get those gathered too.  I mostly didn't want to delay getting advice on my higher level strategy (invest vs pay debt)

merula

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #4 on: February 06, 2019, 08:51:54 AM »
I agree with RWD about focusing on the debt before maxing your accounts, and about traditional (pre-tax) contributions into a 401k or IRA before Roth, given your circumstances.

On the former, you're not going to find a guaranteed 7.25% return anywhere, and on the latter, I would suggest reading this article for more information:
https://www.madfientist.com/traditional-ira-vs-roth-ira/.

If you have access to credit cards and could cash-flow a low-level emergency like car or house repairs, I wouldn't increase your emergency fund. In fact, depending on your circumstances and risk tolerance, you might even throw that money towards your debt. A lot of folks around here don't have an e-fund at all, because they have high savings rates and credit cards, so if something bad happened, they could put it on a credit card and skip saving that month to pay off the card before any interest was charged. That's not for everyone, but it's an option. (I personally have an e-fund, but I've used it once in 10 years. I have it because I'm the sole income in my household, I have two kids and an older house and it makes me feel more secure to have that money readily available.)

Also, you might be interested in the Stocks series by JL Collins, it starts here: https://jlcollinsnh.com/2012/04/15/stocks-part-1-theres-a-major-market-crash-coming-and-dr-lo-cant-save-you/. I think your current index funds are perfect, but it was reading that series that made me get out of my company's stock. (Now, granted, there weren't any perks from my company's stock other than it being available in the 401k portfolio; if you have an ESP discount or something your answer might be different.)

Your income is very high; $7,500 per month, gross. Obviously taxes and other payroll deductions will eat into that, plus $600/month for the 401k and ~$1,350 to student loans, but that still leaves ~$4,000/month in income. We could probably offer some suggestions for lowering expenses if you're willing to go that route.

Philociraptor

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #5 on: February 06, 2019, 09:14:38 AM »
Your debt isn't too bad actually. We just finished paying off the last $60k of my $90k student loan debts in the past 2 years (making lower incomes), so it's definitely possible for you to get it done rather quickly. Agreed with other posters, we need to see your expenses and see what could be cut. Your income is an amazing asset! I wouldn't keep more than about $5k in an E-fund with this debt emergency. I'd advise only contributing enough to 401(k) to get the match and putting any remaining extra money each month towards the highest-interest loan until you've eliminated all the loans with over 5% interest rates. Unless your spending is insane it should be pretty easy to pay down that amount in less than 2 years.

edit// As an example of what a monthly report could look like as we track your progress, here is my report from my journal for last month:

January 2019 Report Card:

Income (2 29 year old earners, less 401(k) contributions): $6,320

Expenditures:
Auto & Transport: $768 - higher than usual thanks to replacing wife's tires on her 2010 CR-V
Bills/Utilities: $327 - typical
Groceries: $547 - typical
Charity: $100 - typical
Health/Fitness $190 - typical
Home: $589 - typical
Property Taxes: $3,812 - annual
Travel: $1,489 - booked 2 round trip plane tickets to London (November vacation, will be my first time off the continent), 2 round trip plane tickets to San Francisco (March, to visit wife's sister), paid for our 2 night stay in San Juan, PR (February, mini-vacation before attending fraternity big brother's wedding), and paid for 2 night stay in Houston (January, wife competed in state weightlifting championship)
Everything Else: $994 - ouch, expanded below
Total spent: $8,816

Debt:
Mortgage: $98,702 (-$184)
Total debt: $98,702 (-$184)

Assets:
House (Tax value 2018): $180,410 (+$0)
Cash Savings: $35 (-$10,401) - primarily went to funding IRA's and paying property taxes
His Rollover 401(k): $132,760 (+$9,846)
His 401(k) $2,266 (+$2,266)
Her 401(k): $89,474 (+$7,714)
His Roth IRA: $38,717 (+$7,368) - funded $4.5k/$6k 2019 limit
Her Roth IRA: $39,481 (+$8,998) - funded $6k/$6k 2019 limit
His Traditional IRA: $16,740 (+$1,317)
Her Traditional IRA: $16,697 (+$1,267)
Co-owned Taxable Brokerage: $13,293 (+$1,053)
His Sofi Wealth $215 (+$112) - put $100 to get $100 bonus, will probably liquidate after a year to simplify life
Total assets: $530,088 (+$29,428)

Net Worth: $431,386 (+$29,724)

Figures next to debts and assets are difference from previous month.

Everything Else categories with > $100 spend:
Restaurants: $273 - majority of this was spent while in Houston, remainder was lunches/dinners with friends
Gifts: $178 - cash for Chinese New Year this coming weekend, 2 birthday presents (mom and sister's boyfriend)
Alcohol & Bars: $118 - a few beers on a work trip, "VIP cocktail night" with family, lunches/dinners with friends
Clothes: $114 - annual replacement of gym clothes that gets destroyed (2 shorts for me and some t-shirts for both of us)
Personal Care: $100 - Wife's lashes that her niece does for her

Overall, we live an exceptionally extravagant life.
« Last Edit: February 06, 2019, 09:18:55 AM by Philociraptor »

diesel

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #6 on: February 06, 2019, 10:42:24 AM »
@RWD @merula @MrThatsDifferent @Philociraptor   Thank you so much for the advice you have given me already.  While I am getting my personal finances together I have a question I wanted to get some thoughts on.

If I do decide to stop contributions to my Roth, should I also stop contributions to my HSA?  I wasn't sure if tax implications should be considered.

Hypothetically, if I do stop contributing to both of those, the numbers say I should be debt free in less than 2 years.  I am looking into rates for refinancing the high interest student loan.  I'm not too concerned about minimum payment at this time since I am/will be paying well over that each month.  I found one offer that is 5 year, 2.68%...but it's variable.  Given that I should be done paying on it in 2 years or less is it worth the risk of variable?  Theoretically with that short of a pay off period, the chances of going up exponentially are smaller correct?  I'm not a loan expert....(even though I have too many of them haha.)

Thanks again.

RWD

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #7 on: February 06, 2019, 11:03:22 AM »
An HSA is more valuable than a Roth IRA. You should probably continue funding it. See this article:
https://www.madfientist.com/ultimate-retirement-account/

Variable interest rates can go up but I agree that if you're paying them off in under 2 years it will almost certainly be cheaper than a fixed interest rate. Though at 2.68% I would probably invest instead of pay more than the minimum payments.

MrThatsDifferent

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #8 on: February 06, 2019, 12:39:16 PM »
An HSA is more valuable than a Roth IRA. You should probably continue funding it. See this article:
https://www.madfientist.com/ultimate-retirement-account/

Variable interest rates can go up but I agree that if you're paying them off in under 2 years it will almost certainly be cheaper than a fixed interest rate. Though at 2.68% I would probably invest instead of pay more than the minimum payments.

RWD makes a good a point, if you can get the interest rate for all of them that low, then go back to the investment order: maximize your tax advantage accounts and then, with what you have over, you can either invest in a taxable account or snowball the debt or both. Logic says invest, emotion says remove debt immediately. I’d probably do both by taking the excess and putting some in a taxable account and some in extra to knockout the smaller loans and then save the biggest loan for last (assuming you go that interest rate down). Also, look to see where you can continually trim expenses to have more money to invest and conquer.

diesel

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #9 on: February 07, 2019, 07:53:00 AM »
I agree with RWD about focusing on the debt before maxing your accounts, and about traditional (pre-tax) contributions into a 401k or IRA before Roth, given your circumstances.

On the former, you're not going to find a guaranteed 7.25% return anywhere, and on the latter, I would suggest reading this article for more information:
https://www.madfientist.com/traditional-ira-vs-roth-ira/.


Thanks for the advice.  I actually read through that madfientist article when deciding to use a roth vs trad ira.  My thinking was that my income is too high for the traditional ira tax deduction so I should go Roth?  Am I misunderstanding that?

Thanks again.

RWD

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #10 on: February 07, 2019, 08:18:43 AM »
I agree with RWD about focusing on the debt before maxing your accounts, and about traditional (pre-tax) contributions into a 401k or IRA before Roth, given your circumstances.

On the former, you're not going to find a guaranteed 7.25% return anywhere, and on the latter, I would suggest reading this article for more information:
https://www.madfientist.com/traditional-ira-vs-roth-ira/.


Thanks for the advice.  I actually read through that madfientist article when deciding to use a roth vs trad ira.  My thinking was that my income is too high for the traditional ira tax deduction so I should go Roth?  Am I misunderstanding that?

Thanks again.

I would assume that is likely the case for you. But a 401k has mostly the same tax treatment as a traditional IRA so you should focus on maxing that before a Roth IRA (unless you have poor fund selection and/or fees in the 401k). Note that the investment order post mentions you should swap steps #4 and #5 if you earn too much for the IRA deduction.

So the investment order, tailored a bit better for your scenario:
0. Emergency fund
1. 401k match
2. Debts around/above ~7.6%
3. Max HSA
4. Max 401k (assuming fees and funds are good)
5. Roth IRA
6. Mega backdoor Roth, if applicable
7. Debts around/above ~5.6%
8. Taxable investments and/or 529

gwhunter

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #11 on: February 07, 2019, 08:44:06 AM »
@RWD @merula @MrThatsDifferent @Philociraptor   Thank you so much for the advice you have given me already.  While I am getting my personal finances together I have a question I wanted to get some thoughts on.

If I do decide to stop contributions to my Roth, should I also stop contributions to my HSA?  I wasn't sure if tax implications should be considered.

Hypothetically, if I do stop contributing to both of those, the numbers say I should be debt free in less than 2 years.  I am looking into rates for refinancing the high interest student loan.  I'm not too concerned about minimum payment at this time since I am/will be paying well over that each month.  I found one offer that is 5 year, 2.68%...but it's variable.  Given that I should be done paying on it in 2 years or less is it worth the risk of variable?  Theoretically with that short of a pay off period, the chances of going up exponentially are smaller correct?  I'm not a loan expert....(even though I have too many of them haha.)

Thanks again.

I am looking to refinance some student loans as well.  Care to share who is offering a 5 year refi at 2.68%? 

merula

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #12 on: February 07, 2019, 10:01:26 AM »
Do you actually make too much for the IRA deduction? Because it's easy to look at the AGI threshold and think "yeah, my income is above that", but there are a lot of other factors.

For example, your gross salary for 2019 is $100k. But that's not your AGI. Do you pay for anything pre-tax out of your paycheck (insurance, parking, transportation, etc.)? That reduces your AGI. Student loan interest, HSA, 401k and trad IRA deductions can also reduce your AGI to the extent you qualify.

If you pay $500 per month in pre-tax benefits, $2,500 in student loan interest (looks like you're probably more than that given your loans and interest rates, but that's the max), max out your 401k, and split $8,500 between your HSA and a trad IRA, you're magically below the AGI threshold for the deductions for trad IRA contributions. (And also the student loan interest deduction threshold, though it's not as clear whether you're above or below that today.)

It's a little funny that you can use those payments to get to the AGI threshold, but only if you hit the threshold, but it's not the weirdest part of the tax code by far.

Philociraptor

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #13 on: February 07, 2019, 10:43:17 AM »
Do you actually make too much for the IRA deduction? Because it's easy to look at the AGI threshold and think "yeah, my income is above that", but there are a lot of other factors.

For example, your gross salary for 2019 is $100k. But that's not your AGI. Do you pay for anything pre-tax out of your paycheck (insurance, parking, transportation, etc.)? That reduces your AGI. Student loan interest, HSA, 401k and trad IRA deductions can also reduce your AGI to the extent you qualify.

If you pay $500 per month in pre-tax benefits, $2,500 in student loan interest (looks like you're probably more than that given your loans and interest rates, but that's the max), max out your 401k, and split $8,500 between your HSA and a trad IRA, you're magically below the AGI threshold for the deductions for trad IRA contributions. (And also the student loan interest deduction threshold, though it's not as clear whether you're above or below that today.)

It's a little funny that you can use those payments to get to the AGI threshold, but only if you hit the threshold, but it's not the weirdest part of the tax code by far.

To my knowledge, IRA deduction phase-outs use MAGI, not AGI. MAGI doesn’t include traditional IRA contributions.

diesel

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #14 on: February 07, 2019, 10:49:44 AM »
@RWD @merula @MrThatsDifferent @Philociraptor   Thank you so much for the advice you have given me already.  While I am getting my personal finances together I have a question I wanted to get some thoughts on.

If I do decide to stop contributions to my Roth, should I also stop contributions to my HSA?  I wasn't sure if tax implications should be considered.

Hypothetically, if I do stop contributing to both of those, the numbers say I should be debt free in less than 2 years.  I am looking into rates for refinancing the high interest student loan.  I'm not too concerned about minimum payment at this time since I am/will be paying well over that each month.  I found one offer that is 5 year, 2.68%...but it's variable.  Given that I should be done paying on it in 2 years or less is it worth the risk of variable?  Theoretically with that short of a pay off period, the chances of going up exponentially are smaller correct?  I'm not a loan expert....(even though I have too many of them haha.)

Thanks again.

I am looking to refinance some student loans as well.  Care to share who is offering a 5 year refi at 2.68%?

Absolutely.  Using lendkey.com I put in all of my info and that was the best variable rate it quoted me at.  Not knowing all of your info I can't say if it would be the same but that's what it gave me.

diesel

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #15 on: February 07, 2019, 11:46:56 AM »
Hey Everyone,

I updated the excel file and attached it here.

Changes:
1. Stopped contributions to RothIRA and Emergency Fund.  Added those amounts to debt payoff.
2. Added a monthly breakdown showing Paycheck breakdown and "Living" Expenses.  I say living in quotes because I am by no means at the bare minimum of living...rather they are my monthly expenses.

* I still don't have a good breakdown of "Personal Expenses" (AKA the anti-mustachian black hole that my money goes to.)...still working on that breakdown.
* I am paying more toward debt than minimum as noted in the comments section. (with the addition of the Roth & Personal savings contribution around 1800/month total.  300/week going to highest interest loan)


Next up - stop HSA contributions?

I thought this may help clear some things up.  Thank you all so much for the help you have given me so far and for sticking with me while I work this out.


MrThatsDifferent

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #16 on: February 07, 2019, 01:58:59 PM »
I’d definitely put all that bonus to that largest loan and kill that fucker as quickly as possible. Now, here’s the other thing and you’re not going to like it, get rid of the cable! You don’t need it. Netflix is enough, if you have it for sports, go visit a friends place or stream online. Put that money to killing these loans. It’s worth it and you’ll quickly discover that life without cable isn’t bad at all.

merula

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #17 on: February 08, 2019, 08:21:25 AM »
To my knowledge, IRA deduction phase-outs use MAGI, not AGI. MAGI doesn’t include traditional IRA contributions.

Yes, you're right, thanks for correcting me.

Maybe marry the girlfriend for the tax deductions?* :P Married limits are higher, though if she's a similar high earner the whole thing is moot.

On your expenses, that seems like a lot to spend on cable, especially when you also have Netflix and Amazon Prime. Water/Sewer also seems high; that's almost as much as my quarterly water bill for a house with two adults and two kids.

I'm not entirely sure where you live, but your average electric/gas bill is the same as my Minnesota winter heating bill. You might not have as much control over insulation and stuff, since you're renting, but even things like adjusting to a wider temperature range and dressing for it can make a real difference.

(*Don't actually marry for any monetary reason. It'll cost more in the end.)


diesel

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #18 on: February 27, 2019, 09:23:13 AM »
Hi all,  first of all thanks for all your responses and help so far.  I just wanted to fill you in on the changes I have made so far.  I have totally stopped contributing to the Roth IRA and HSA for the time being and started putting all of that money to loan payoff.  (9500 extra dollars/year).  This week I will be getting my bonus so that will be another 7k-ish I can throw at my highest interest debt.  Based on those two things I am slated to be done with all my debt in less than 2 years and that is without any other trimming/extra paying.  I am by no means done working at it but I wanted to show my progress so far.

Thanks again for helping on this journey.

Philociraptor

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #19 on: February 27, 2019, 01:05:19 PM »
Hi all,  first of all thanks for all your responses and help so far.  I just wanted to fill you in on the changes I have made so far.  I have totally stopped contributing to the Roth IRA and HSA for the time being and started putting all of that money to loan payoff.  (9500 extra dollars/year).  This week I will be getting my bonus so that will be another 7k-ish I can throw at my highest interest debt.  Based on those two things I am slated to be done with all my debt in less than 2 years and that is without any other trimming/extra paying.  I am by no means done working at it but I wanted to show my progress so far.

Thanks again for helping on this journey.

Excellent! Once you have all the loans 5% or higher knocked out you should probably max out (in this order) your HSA, IRA, and 401(k) before paying down the remaining loans. Hope to see some payoff posts in your future. Cheers!

MrThatsDifferent

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #20 on: February 27, 2019, 01:22:58 PM »
Hi all,  first of all thanks for all your responses and help so far.  I just wanted to fill you in on the changes I have made so far.  I have totally stopped contributing to the Roth IRA and HSA for the time being and started putting all of that money to loan payoff.  (9500 extra dollars/year).  This week I will be getting my bonus so that will be another 7k-ish I can throw at my highest interest debt.  Based on those two things I am slated to be done with all my debt in less than 2 years and that is without any other trimming/extra paying.  I am by no means done working at it but I wanted to show my progress so far.

Thanks again for helping on this journey.

Congrats on all of that, you’ll enjoy life without that debt. I still encourage you to drop the cable, it’s a rip off. The quicker you kill the debt, the quicker you can aim that firehose at building your investments back up and every extra helps to make up for your two years of putting that on hold.

diesel

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #21 on: February 28, 2019, 10:25:06 AM »
@Philociraptor the way my avalanche debt payoff strategy looks, it will only take 2 more months at that rate to pay off the lower interest loans after the higher are gone.  For that short of a time I may just knock them out for complexity sake and peace of mind and then start maximizing investments.

@MrThatsDifferent I am still working on the cable and looking in to other options.  On that note, yesterday I switched cell provider/plan and lowered my monthly bill by 25 dollars.  Small wins!

MrThatsDifferent

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #22 on: February 28, 2019, 11:26:34 AM »
@Philociraptor the way my avalanche debt payoff strategy looks, it will only take 2 more months at that rate to pay off the lower interest loans after the higher are gone.  For that short of a time I may just knock them out for complexity sake and peace of mind and then start maximizing investments.

@MrThatsDifferent I am still working on the cable and looking in to other options.  On that note, yesterday I switched cell provider/plan and lowered my monthly bill by 25 dollars.  Small wins!

Congrats on that, every win counts.

diesel

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #23 on: June 19, 2020, 11:50:15 AM »
Hey everyone.  It has been a while and I just wanted to get back and do a bit of a gut check/progress update.

So a couple updates:
1)  I'm 30 now.
2)  I no longer have cable (yay)
3)  Since my first posting here (16 mos. ago) I have managed to pay off a little over $39K in debt.  As of last week I paid off my last "high" interest debt.  That means the only debt I have left in the world is ~$13K at 3.49% interest.  My plan has me paid off completely in December. (Surprisingly accurate timing guess from my original posting)

Based on the investment order, it would be time to start steps 3-6 before paying off that last debt.  I'm now deciding if I should keep the bandaid off for another 6 months and finish it or ramp back up investing.  Does anyone have experience in making this decision?  What other things should I consider in the thought process?(Market, Life Situation, Etc.)  If anyone has any insight or past experience on this decision that would be great.

A little more information if it helps.  I expect within the next 2-4 years some pretty big life changes will take place. (marriage, saving for house, kids, etc.)

Thanks in advance and thanks for the help and guidance you all gave me when I started this 1.5 years ago!

MDM

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #24 on: June 19, 2020, 12:08:07 PM »
Based on the investment order, it would be time to start steps 3-6 before paying off that last debt.  I'm now deciding if I should keep the bandaid off for another 6 months and finish it or ramp back up investing.
For a 6 month duration, it's pretty much a coin flip.

If the only way you could max your tax-advantaged contributions for 2020 is by not paying the debt early, consider not paying early.  Otherwise, flip a coin (which may or may not result in not paying early).

Laura33

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #25 on: June 23, 2020, 08:07:27 AM »
Do whatever you need to to take full advantage of your 2020 tax-advantaged accounts.  Those are "use it or lose it"; if you don't fund them this year, you cannot contribute more in future years to make that up.  HSA is top priority, followed by maxing out your 401(k).  If you want to pay off the loans before attacking the Roth, that's ok -- you can fund the Roth all the way until tax day 2021, so you have a little more time to work with there.  Plus it isn't quite as valuable as, say, your HSA, which has several layers of tax protection built in.

JGS1980

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #26 on: June 23, 2020, 08:41:38 AM »
Hey everyone.  It has been a while and I just wanted to get back and do a bit of a gut check/progress update.

So a couple updates:
1)  I'm 30 now.
2)  I no longer have cable (yay)
3)  Since my first posting here (16 mos. ago) I have managed to pay off a little over $39K in debt.  As of last week I paid off my last "high" interest debt.  That means the only debt I have left in the world is ~$13K at 3.49% interest.  My plan has me paid off completely in December. (Surprisingly accurate timing guess from my original posting)

Based on the investment order, it would be time to start steps 3-6 before paying off that last debt.  I'm now deciding if I should keep the bandaid off for another 6 months and finish it or ramp back up investing.  Does anyone have experience in making this decision?  What other things should I consider in the thought process?(Market, Life Situation, Etc.)  If anyone has any insight or past experience on this decision that would be great.

A little more information if it helps.  I expect within the next 2-4 years some pretty big life changes will take place. (marriage, saving for house, kids, etc.)

Thanks in advance and thanks for the help and guidance you all gave me when I started this 1.5 years ago!


Pay the F-er off, and you'll be REALLY glad you did so. Closes a chapter in your life. Allows you to move on. 6 months in payoff either way is not a big deal mathematically, so I favor simplification.

JGS

P.S. I paid off $250K+ in student loans.

maisymouser

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #27 on: July 09, 2020, 08:03:56 AM »
Hey everyone.  It has been a while and I just wanted to get back and do a bit of a gut check/progress update.

So a couple updates:
1)  I'm 30 now.
2)  I no longer have cable (yay)
3)  Since my first posting here (16 mos. ago) I have managed to pay off a little over $39K in debt.  As of last week I paid off my last "high" interest debt.  That means the only debt I have left in the world is ~$13K at 3.49% interest.  My plan has me paid off completely in December. (Surprisingly accurate timing guess from my original posting)

Based on the investment order, it would be time to start steps 3-6 before paying off that last debt.  I'm now deciding if I should keep the bandaid off for another 6 months and finish it or ramp back up investing.  Does anyone have experience in making this decision?  What other things should I consider in the thought process?(Market, Life Situation, Etc.)  If anyone has any insight or past experience on this decision that would be great.

A little more information if it helps.  I expect within the next 2-4 years some pretty big life changes will take place. (marriage, saving for house, kids, etc.)

Thanks in advance and thanks for the help and guidance you all gave me when I started this 1.5 years ago!


Pay the F-er off, and you'll be REALLY glad you did so. Closes a chapter in your life. Allows you to move on. 6 months in payoff either way is not a big deal mathematically, so I favor simplification.

JGS

P.S. I paid off $250K+ in student loans.

+1, I remember exactly where I was when I hit the "submit" button to make my final student loan payment. It really did start a new (debt-free) chapter in my life. The emotional and mental relief and feeling of freedom was extravagant.

Then I got a mortgage.... ;)

catorbe

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #28 on: July 09, 2020, 02:59:10 PM »
Hey everyone.  It has been a while and I just wanted to get back and do a bit of a gut check/progress update.

So a couple updates:
1)  I'm 30 now.
2)  I no longer have cable (yay)
3)  Since my first posting here (16 mos. ago) I have managed to pay off a little over $39K in debt.  As of last week I paid off my last "high" interest debt.  That means the only debt I have left in the world is ~$13K at 3.49% interest.  My plan has me paid off completely in December. (Surprisingly accurate timing guess from my original posting)

Based on the investment order, it would be time to start steps 3-6 before paying off that last debt.  I'm now deciding if I should keep the bandaid off for another 6 months and finish it or ramp back up investing.  Does anyone have experience in making this decision?  What other things should I consider in the thought process?(Market, Life Situation, Etc.)  If anyone has any insight or past experience on this decision that would be great.

A little more information if it helps.  I expect within the next 2-4 years some pretty big life changes will take place. (marriage, saving for house, kids, etc.)

Thanks in advance and thanks for the help and guidance you all gave me when I started this 1.5 years ago!


Pay the F-er off, and you'll be REALLY glad you did so. Closes a chapter in your life. Allows you to move on. 6 months in payoff either way is not a big deal mathematically, so I favor simplification.

JGS

P.S. I paid off $250K+ in student loans.

+1, I remember exactly where I was when I hit the "submit" button to make my final student loan payment. It really did start a new (debt-free) chapter in my life. The emotional and mental relief and feeling of freedom was extravagant.

Then I got a mortgage.... ;)

Damn, I got a mortgage before finishing my student loans :( i'll never get that feeling anytime soon!

diesel

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #29 on: July 13, 2020, 06:16:34 AM »
Hey everyone.  It has been a while and I just wanted to get back and do a bit of a gut check/progress update.

So a couple updates:
1)  I'm 30 now.
2)  I no longer have cable (yay)
3)  Since my first posting here (16 mos. ago) I have managed to pay off a little over $39K in debt.  As of last week I paid off my last "high" interest debt.  That means the only debt I have left in the world is ~$13K at 3.49% interest.  My plan has me paid off completely in December. (Surprisingly accurate timing guess from my original posting)

Based on the investment order, it would be time to start steps 3-6 before paying off that last debt.  I'm now deciding if I should keep the bandaid off for another 6 months and finish it or ramp back up investing.  Does anyone have experience in making this decision?  What other things should I consider in the thought process?(Market, Life Situation, Etc.)  If anyone has any insight or past experience on this decision that would be great.

A little more information if it helps.  I expect within the next 2-4 years some pretty big life changes will take place. (marriage, saving for house, kids, etc.)

Thanks in advance and thanks for the help and guidance you all gave me when I started this 1.5 years ago!


Pay the F-er off, and you'll be REALLY glad you did so. Closes a chapter in your life. Allows you to move on. 6 months in payoff either way is not a big deal mathematically, so I favor simplification.

JGS

P.S. I paid off $250K+ in student loans.

+1, I remember exactly where I was when I hit the "submit" button to make my final student loan payment. It really did start a new (debt-free) chapter in my life. The emotional and mental relief and feeling of freedom was extravagant.

Then I got a mortgage.... ;)

Damn, I got a mortgage before finishing my student loans :( i'll never get that feeling anytime soon!

Thanks for the input everyone!  As of today I only have 5 payments left until I'm debt free....I plan to at least feel it for a couple minutes before a mortgage comes! ;)

diesel

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #30 on: February 05, 2021, 07:06:22 AM »
Hey Everyone.  As of December 15, 2020 I officially don't owe a cent to anyone in the world!

I'm not sure why I felt the need to come back and announce it but I'm sure you have all been on the edge of your seat to hear the news.

It feels good to have had a plan and stick to it.  Now on to the next steps!

Thanks everyone for your input along the way!

NonprofitER

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #31 on: February 05, 2021, 08:09:51 AM »
Congratulations!!!! That's a great achievement!!! 

meandmyfamily

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #32 on: February 05, 2021, 10:59:35 AM »
Excellent work!  Imagine where you will be in a year!

Hawaiian

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #33 on: February 05, 2021, 12:13:56 PM »
@diesel

You sir are a bad ace mofo!!!

Now just make sure you vet your spouse if you ever are to get married and you should be on your way to FIRE in no time.

I'll be waiting on the edge of my seat to hear your next update.

tarheeldan

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #34 on: February 05, 2021, 12:19:51 PM »
Congratulations!!!!!

better late

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #35 on: February 05, 2021, 12:39:39 PM »
So happy to read your update! You Did It! Outstanding!!!!

soily

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Re: Bearded 29 Year Old In Need Of Some Mustache Help!
« Reply #36 on: February 05, 2021, 01:10:01 PM »
Hey Everyone.  As of December 15, 2020 I officially don't owe a cent to anyone in the world!

I'm not sure why I felt the need to come back and announce it but I'm sure you have all been on the edge of your seat to hear the news.

It feels good to have had a plan and stick to it.  Now on to the next steps!

Thanks everyone for your input along the way!
I certainly enjoyed reading your journey! Keep it up.

 

Wow, a phone plan for fifteen bucks!