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May 10, 2013

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You are off to a great start. You didn't mention whether your employer offers a match. Since you mentioned real estate interests a possible option for you would be to reduce 401k contributions to the match and then use extra income to pay down debts faster. That would accelerate your timeline and start investing in real estate sooner.

Why wait to get married? Your money is already intertwined. A lavish wedding is not necessary. I understand that combining finances with someone you're not married to can get sticky. Also, married people seem more stable and respectable than those "playing house".

In contrast to Carole's opinion, I totally understand on waiting for the wedding... you probably want to be more stable financially before taking the leap. Maybe I'm just more sympathetic because I'm in a similar situation... but you're doing a great job. Just make sure you continue to stay committed to each other, and the marriage just becomes a piece of paper at that point.

Also (I deal with this too), it's prudent, as the higher earner, to not jump into decisions like that too soon. :)

I immediately hesitated when I read that you decided to combine your finances-- I agree with Carole that it can get "sticky" (as she said).

Otherwise-- you guys are making a good incme for your age and I think you have a bright future ahead of you. I would reccomend a few basic steps to solidify your finances. Most importantly, I would beef up your cash emergency fund a bit . Currently it is less than 3 months expenses... you should take that up to 6 months...maybe 8 months.

Then start investing that monthly overage and let compounding work its magic. If you are able to invest $2500/month starting at your age....your net worth will grow exponentially and you will have the opportunities available only to those lucky few who are financially independant.

Retiring after the kids graduate high school is a lofty goal for sure...... but go for it. I am sure you know many things will change along the way that might change or defer that goal.

I know if you invest $2500/month for the next 40 years until you are mid 60's--- you will be a millionaire many times over.

good luck.

You are in relatively good shape when considering your Young and have strong cash flow. A year from now, you could have all your debt paid off, except for the mortgage.

Here is what I would suggest. I would take your existing cash and pay off the loan due to The family. Spend the following 2 months paying off the student loan. For the remainder of the year, you can rebuild your cash right back to where it was as you now have even stronger cash flow. You the take all available cash for the first 6 months of next year and knock out the car. With those things knocked out, you just added $1500 a month to cash flow from where you are at today? That should more than make up for eliminating the extra jobs.

You're off to a great start and on a good track. Good to have goals, but prepare to be flexible, that's a lofty one indeed :)

You may want to put off school until you're out of all of your debt (other than mortgage), not just the family loan. I hope your work will pay for part of school. I wouldn't buy an investment property until I had paid off that school, but I may be more conservative than you.

@Paul

--- Time for me to harp on the bad debt equivalency mindset again. I may have to change my handle to something like The Debt Defender or something here pretty soon. :) ---

"I wouldn't buy an investment property until I had paid off that school"

Why? What is magical about his school debt? If instead his mortgage debt was larger and he had no school debt would it be ok then or would he have to pay down more of his mortgage? Are you looking for a magic debt to income ratio? Are you looking for a certain cash flow margin? I don't get the sense you are. If you could make an argument along those lines then it could be analyzed and it might make sense. But it seems like you are just making a statement about being averse to moving forward while you are holding certain debts.

The difference with investment property is it is not something that you are waiting for it to pay off. In the current market it is easily cash flow positive on day one. And by the way the market is heating up. It is getting less cash flow positive every day. These windows don't stay open for ever. It will get very hard to cash flow investment property again one day.

If the investment property is cash flow positive and he has a cash buffer to cover unexpected costs, how is other debt that is easily covered by his current cash flow of any concern, from either a financial stability standpoint, a cashflow standpoint, or a risk standpoint?

I understand your point Apex, thanks. I wasn't clear, I was referring to his plan to start graduate school in the fall. Student loans will be at 6.8% again after July. That's a magically high interest rate in these times. I'd avoid them if possible.

Marriage isn't about the fancy ceremony. It's about building a life together. There's no reason to put off the wedding--and many reasons why it's a bad idea to do so.

Other than that, you look like you're making good progress on your goals.

Cut your expenses down a bit and pay off your debt. You should be out of debt within a year at the most given your numbers (excluding mortgage). You will feel much better and have a lot more money to put towards your future.

I agree with others who say you shouldn't put off the wedding. I also agree it's generally a bad idea to buy property, etc. without being married. I admit, as a gay person, I get a little riled up when I see people take the marriage contract for granted, as if it isn't that important. That contract matters a great deal.

Other than that, CR is doing well.

You don't need to be buying rental properties when you have $35,000 in debts.

Congratulations on your up coming wedding. The best wedding present you can give each other is paying down non-mortgage debt as soon as possible. Consider using your emergency fund to pay off the car loan and student loan first while still paying the minimum on the awesome generous family loan.

$35.9k debt
($15.k)free cash
$20.9k balance
/$2500 free cash per month
8.3 months and all debts will be paid

then you'll have $2500/month to rebuild emergency fund toss in your up coming bonuses and with 1 year you'll have all NM debts paid and rebuilt your emergency fund..

Article is interesting, but i wonder where i can find good company for pre settlement funding, any ideas?

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