This is the beginning of my journey towards being debt free and achieving Financial Independence. How did I get here? I currently have a career of 9+ years at a multinational corporation, and as of last year we have been threatened with layoffs a total of 3 times!
Well let me tell you, as of the first lay-off threat in May 2014, I quickly woke up to the fact that even though I was not living paycheck to paycheck, I had some drastic lifestyle changes to make and debt to pay off quickly in order to quit the Rat Race and not be so dependent on my 9-5. Besides, I love to travel and the “cubicle farm”environment is getting very very old.
What does my financial situation look like? I have never been a fan of credit cards so luckily I do not have any consumer debt to pay-off. I have about $15,000 in emergency cash savings. I also have a $55,000 student loan that I am aggressively trying to pay off by December 2015 when I turn 40.
I have a $170,000 mortgage for my primary residence and also have a rental property with $168,000 mortgage, the rent is $1200 a month (and set to go up to $1300 in September) which covers the mortgage plus some extra income which I am using for any repairs needed or towards my S Loan.
Fast forward to April 2015, here are some steps that I am taking to annihilate the debt:
– I am looking at selling the rental and net about $50,000 to help pay off the Student Loan quicker and avoid paying the interest.
– Lowered my 401K contributions to 8% to meet company match, extra income goes towards S Loan. (I have a healthy 401K balance, still at 5 figures though).
– Disconnected satellite TV, (kept Netflix $8.61 and HuluPlus $7.99 per month). I will occasionally splurge and rent an iTunes new release $5.99 no more than once a week, what can I say… I LOVE MOVIES and reading of course.
– I DO NOT grocery shop unless I have planned my meals for the week and the shopping list. I shop after lunch to avoid impulse buys.
– Started de-cluttering the house and selling items on Craigslist, books and DVDs on Amazon. Its great to get rid of stuff and put the extra $ towards the Student Loan!
– I am researching how to generate extra income online for a side hustle (Etsy store to sell artwork and carvings, freelance writing and IT consulting).
– I have a fiance who is very supportive of the above and is also aggressively paying down his debt. We manage our finances separately, except for the mortgage, groceries and utilities etc which we have a joint checking account which we evenly contribute too.
– We cut out eating in restaurants frequently to basically once a week. We mostly eat at home and take leftovers as lunch for work the next day.
– Lastly, frugality is the key! Before we buy anything e.g. shoes, gadget, we ask ourselves – is it a nice or need to have? Usually the answer is no.
With these baby steps, hopefully I am on the fast track to annihilating my Student Loan debt and start aggressively saving towards Financial Independence.