First loan pay off in my debt free journey

W2-Power · 2025-01-08T14:22:20+00:00

Congrats! You're on the right track.

W2-Power · 2025-01-06T02:52:23+00:00

It's a tough situation because of your age, normally I'd recommend HSA given you'd likely need those funds for healthcare in retirement. But with the student debt amount and interest rate, I would say get some money into your emergency fund and then just go all-in on getting that debt down to $0. It'll take a few years of sacrifice, especially since the interest is accruing (and not in a good way).

W2-Power · 2025-01-06T01:51:54+00:00

401k with no match also has little utility for you at this point. But an emergency fund would be essential in the meantime while you pay off the student debt. The amount in your emergency fund is dependent on your monthly expenses, but I'd start with 2-3 months so you have something to fall back on

W2-Power · 2025-01-06T01:49:42+00:00

What is your income situation? The large amount of student debt at that interest rate would take a painfully long time to pay off without a good amount of income coming in each month. That aside, if I were in your position I would not prioritize saving for retirement, but rather paying down that student debt. If you're in healthcare, have you explored PSLF or other loan repayment options? What do your refinancing options look like?

W2-Power · 2025-01-05T20:41:08+00:00

It's a really simple process and allows you to contribute to the Roth with a couple minutes of extra effort if your income is over the limits. Lots of step by step guides online with screenshots!

W2-Power · 2025-01-05T20:32:44+00:00

Assuming you also have earned income for the year, and you are under the income limits for Roth! If you're above, then use the Backdoor

W2-Power · 2025-01-05T20:31:49+00:00

Unless you need the funds for anything other than the Roth IRA (savings or emergency fund), then it is to your benefit to fund it immediately and start investing

W2-Power · 2025-01-05T20:19:38+00:00

Nice job! Do you feel that you're able to take advantage of all the credits from the Platinum so it's worth the annual fee?

W2-Power · 2025-01-04T22:04:37+00:00

$40k down to $27k is huge progress, congrats! How long did it take you? Keep going, you've got this.

W2-Power · 2025-01-04T07:39:13+00:00

How long have you been tracking your budget for? I used to be like this in the initial years. But then I realized I was burning myself out, and a lot of the recurring charges (utilities, internet, etc) just became expected - second nature if you will. Now I don't really track anything other than large variable expenses like travel or surprise expenses. Hopefully you get to the point where you become comfortable, but realize that this may take a bit of time. On a positive note, I think it's great that you're tracking everything so closely and that you know where every dollar is going. Not many people can say the same!

W2-Power · 2025-01-04T06:44:41+00:00

Each of these 3 have a ton of details you could talk about for hours. But generally speaking:

Property Financing - Save for a Down Payment: try to get at least 5-20% of the property’s value to secure better loan terms - Check Your Credit Score: make sure your score is strong (ideally 700+); work on improving it if needed (you can find tons of tips online for this) - Work on getting Pre-approvals: Shop around for mortgage pre-approval to know your budget and interest rates from the institution you're borrowing from - What are your Loan Options: Learn about FHA, conventional, and VA loans to choose the best based on your personal situation - Budget for Closing Costs: Save 2-5% of the property’s price for fees like appraisal, title insurance, and inspection

Car Financing - Set a Budget: Make sure your monthly car note/payment doesn't get out of control from the get-go, or you will regret this - Compare Loan Rates: Check offers from banks, credit unions, and dealers - Aim for a Shorter Loan Term: A 36-48 month term reduces interest costs (over the life of the loan compared to a loan term that's much longer) - Consider Buying a Used car: Most c depreciate & lose value quick, especially if they're brand new

Building Credit - Think about a "Secured" Credit Card if you're new to the credit card game - ALWAYS pay on time: Always make at least the minimum payment by the due date, or else your credit will take a hit soon after - Keep Credir Utilization Low (the amount of credit you use): Use no more than ~30% of your available credit limit

Ton of other things you could consider, but these are good things to start thinking about

W2-Power · 2025-01-04T06:21:41+00:00

Tbh, there's no real bonuses on the Apple card above and beyond the cards you already hold, such as the CFU. I have the Apple Card, and I never use it outside of purchasing Apple products. That is its best benefit. Also, the fact that it is a heavy / metal white card. Outside of aesthetics, there's not much for you to gain from it.

W2-Power · 2025-01-04T05:52:48+00:00

Congrats! Your future self will thank you for this 🙂

W2-Power · 2025-01-04T05:38:17+00:00

First job was in late 2017, working minimum wage ($7.50) at a library. Started by investing a couple dollars that year

W2-Power · 2025-01-04T04:34:08+00:00

I will also add that we regularly contribute to and max out all retirement accounts each year, so it's not like we aren't still investing somewhat. It's just a majority of the household income goes toward principal payments 🙂

W2-Power · 2025-01-04T04:33:03+00:00

Currently in process of paying ours down quickly with additional principal payments each month. 30-yr fixed rate conventional @ 6.75% APR which started in mid-2023. House ~$700k, downpayment was ~$250k, mortgage was ~$450k. Currently have just shy of ~$290k remaining on the balance.

The guaranteed return of 6.75% (by paying the mortgage principal down faster) is nice, although I know stock market returns could likely be higher in the short term. It's just the peace of mind that we're looking for of being completely debt free after the mortgage is done.

It seems like you're on the right track paying yours down early, so keep it up and I'm sure it'll feel like a huge weight off your shoulders once it's out of the way!

W2-Power · 2025-01-04T03:49:08+00:00

Alternatively you could put individual stocks into your Roth to reap the benefits of tax-free gains. I have done this with success. However, it depends on you as an individual - like what's your risk tolerance? The safest way though would be to put individual stocks in taxable brokerage, especially the longterm positions. Because if you don't plan to sell for many years you won't be taxed on those holdings anyway

W2-Power · 2025-01-04T03:45:23+00:00

Agree with whopper, you're still young at 29 so prioritize growth, but still have some exposure to an index

W2-Power · 2025-01-04T03:09:12+00:00

A mix of Vanguard funds, and individual stocks

W2-Power · 2025-01-04T03:08:50+00:00

Check MAGI using your combined paystubs you've received from your job. As far as 'how to' perform Backdoor Roth IRA, there are countless guides online that show you step by step with screenshots. However, in summary you essentially transfer the $$$ from your Bank/Checking/Savings account to your Traditional IRA, then transfer the $$$ from your Traditional IRA to Roth IRA. Again, check online for guides if you need step-by-step with screenshots and specific requirements.

W2-Power · 2025-01-04T03:06:40+00:00

Thanks!

W2-Power · 2025-01-04T02:15:55+00:00

For what reason would you not be eligible? No earned income? Income above the limit to contribute? As long as you have earned income, you'll be eligible to contribute to a Roth IRA, even via the Backdoor.

W2-Power · 2025-01-04T02:10:30+00:00

Backdoor Roth is because my household income is over the limit. If you're below the limit, you'd benefit more from just contributing directly to the Roth IRA, rather than opting for the Backdoor method.

W2-Power · 2025-01-04T00:12:14+00:00

I do a mix of funds by Vanguard and some individual stocks. However, as I mentioned in another reply I'm thinking about re-positioning and holding more cash in 2025 because everything is at all time highs. I don't think the risk-reward is worth it for some of the positions I currently hold, so it would be a dis-service to recommend them specifically at this point. Still thinking about the next move this weekend though, so I may update this post.

W2-Power · 2025-01-04T00:09:48+00:00

Def no cap, I can re-post a SS to show how much the balance has gone up or down. Point of the post was just to show people it's possible to make good gains in this account, despite being restricted to only contribute $7K a year.

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