Thursday, February 25, 2010

My "first" real post

My first real post wasn't actually on this website, it was on my buddies Free Money Finance, and I'd like to say thank you to him.  I've been interested in money my whole life, seeing compound interest in other things before money, and once I saw that it translated over, I was pretty happy.  Within the past few years I've become increasingly interested and active managing my money and then I chatted with FMF and he sort of convinced me that I could start up my own blog.  So here's my outreach and an intro to what my finances are now.  In the future I'll be posting my "Net worth" updates each week on Friday, not to get my posts up, but simply because I receive them each week and I feel like it'll encourage me even more so to hit chunks out of it bit by bit.

Below is what I emailed FMF and what he posted!

Help a Reader: Getting Out of Debt

Here's an email I recently received from a reader:
I'm currently 25 going onto 26 soon.  My net worth is currently -$73,520 roughly and although that's (really) bad, I'm not in a horrible spot overall but want advice. 
Currently I have :

  • $3k in emergency fund,
  • a few hundred in my savings/checking (which I'm trying to have a base of 1 to 2 thousand)
  • no credit card debt.
  • a few thousand in stock
  • ~ -$52k private student loan @ 3.1%
  • ~ -$32k government student loan @6.8%
Currently I'm paying the minimum on the government and paying an additional $300 each month on top of minimum for the private.  The reason why I'm paying more on the private than the government is because of a new rule that just happened for people who work for the government or public service which allows for your student loans to be wiped free after working there 10 years which is what I'm doing currently.  Also that 300 dollars will allow me to have it paid off in about 5 years instead of 10 and saving me a lot of money.  Also, my job allows me (actually forces me) to save for retirement 6.5% of my pay along with them contributing an equal amount. 
Also, I'm hoping in the next year or two to get married. The ring I've priced out is going to cost somewhere around 3 to 5k.  I think my folks will give us some money for the wedding as well which I'm hoping we won't go over, but still planning on doing it all myself.  Each year at my current job we get a COLA (Cost Of Living Adjustment) "raise" but once the fiscal year starts I'm hoping to get a pay raise of 25 to 50% of what I make now, apprx 35k which will bring me up to (at least I'm hoping) 50, preferably 55.  Planning on this raise money to set aside a portion for budgeting a ring/new (used) car since mine is starting to go and also mainly the student loans again.  I'd like to have almost no debt by 30.  Idea's?  Thoughts?  Suggestions?  Am I nuts?
I believe the main question here is how to get out of debt by 30. Think he can do it?

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