Continuing the theme on how to pay of debt here are some of the things that helped me in paying down debt and start planning for the future. This is hopefully a future where I am financially independent. I hope these thoughts help you too.
– A better paying job
Like I said I got a better paying job that would allow my wife to stay home and also would allow us to be able to pay down our debts. The security and stability provided by a new job should help on multiple fronts. It is definitely not a ticket start buying frivolous things, it is more important to get debt free and live frugally. This is a bit more complicated in real life then for me to say, just because there is so much nice stuff out there too buy. However this might also me an argument to save for everything you want to buy, only use cash and buy high quality items that will last a long time. But here are the steps and actions that I took after I got my new job in order to get ahead financially.
– map finances:
One of the beauties of the internet is that it gives you many financial tools for free. It does everything from your bank keeping track of your expenditures to MINT keeping track of all your expenses. So it is important to utilize those resources in tracking where your money is going. Once a week you can use these tools to map out where your money is being spent and getting an idea of how to reduce these expenditures. I utilize a 30/30/30 approach to focus my spending. 30 percent of your income goes to donations and investments, 30 goes to rent and utilities and 30 goes to regular expenditures such as food , gas and so on.
– paper money
While I am big fan of gold and silver and other tangible things that have intrinsic value there is a lot of room for paper. I would recommend having an emergency fund and some physical dollars in your possession. This is because it plays back into using the envelope system. (the envelope system: https://libertariandad.wordpress.com/2013/11/28/the-envelope-system/ Also you never know when you may actually need physical cash and it shows how much you have. It is amazing how much less you will spend when you have physical dollars in your hand.
– set goals
Humans in generally can’t see much passed a year in terms of what they want to do and that is if they are lucky. Most people think about a week out and may plan about 2 months out. But with getting out of debt and where you want to go financially you want to look at 2 months, 6 months, 1 year, 5 years and then by age 30, 40, 50. Grab a note book and write your goals down and if you need help you can always Google goals. There are thousands of financial advisors out there. These are my goals for the coming years.
2 months: stick to the envelope plan and put away 500 into my savings account
6 month: (which will be December) pay with saving for all of Christmas and pay of my wifes student loans with the money I have been putting away
1 year: Buy 400 dollars worth of silver coins (you should have physical silver not stocks in it), have 30k in my 401k, have 2-4 months of emergency savings and I could go on.
I’ll skip thirty cause I have already passed that goal.
40: I would like to own a house, have 6 months of emergency savings, have over 100,000 thousand dollars of assets (liquid and solid)
– read articles about saving money
Just like anything else one is interested in it is imperative that you read about it. There are thousands of articles on finance on what to do and where to go. At this point all you have to do it Google how to pay of debt and you will be greeted by thousands of hits. Most of these websites will also tell you how to pay of debt and where to go from there.
I hope that this advice is useful in helping you focus for the future. I will write more on where I am today and what my plans are for the future.