A colleague mentioned she was inspired by a financial independence book. Intrigued, I did some searching and found the FI community. Wow. I am encouraged and determined by this community and I have so much to learn. I wish I would have found this 20 years ago (I’m in my 40s) rather than doing what’s expected: college, debt, work 40+ hours/week, retire at 65. No, thank you!
My husband and I are committed to achieving this and sharing this journey and knowledge with our two kids (under 10). I’m still trying to work out our timeline: the point we don’t have to work. We’re about one month into this new mindset and just analyzing our budget, fully understanding where we spend and making short- and long-term plans has really jumpstarted this for us.
Our journey begins with 3 tools: education, debt reduction and saving more.
- EDUCATION: It didn’t take much to get my husband on board, as I’m typically the spender for unnecessary stuff. There are so many great tools and resources. I started with the ChooseFI podcast – their Pillars of FI (episode 21) is the gateway drug. These guys are an amazing resource and have provided me with the resources I need to start on the path to FIRE.
- DEBT REDUCTION: Armed with little financial knowledge, we’re starting with what we know we can do – it’s common sense – debt reduction. Between job changes, cross-country moves and buying (and filling) a new house, we’ve managed to rack up an embarrassing amount of credit card debt over the last decade and just haven’t focused on getting rid of it. It’s stupid, we know … so we’re getting rid of it ASAP. Based on the debt reduction tracker worksheet I found through Choose FI, we’re looking to have our credit card debt paid off by May 2019. That sounds so far away, but at least we have a plan and end date now. I’m 99% sure that we are underestimating how much we can pay each month and I’m certain that we will be getting all that paid off months sooner.
- SAVING: Vanguard. It’s all over the FI community. I had no idea that I should be looking at fees or expense ratios. I already have 529s for both kids into which we contribute monthly and I opened an IRA into which I rolled over a Fidelity IRA, keeping a 401k with Fidelity. We’re going to keep our monthly IRA contributions low until we have the debt paid off. Then we’ll max it.
HSAs … this little gem! I already had one and didn’t take full advantage. I’ve increased my contribution, lowering my income while socking away pre-tax earnings into an investment account. No brainer!
NEXT 3 GOALS:
- Transfer both our Wells Fargo IRAs into Vanguard.
- Better understand maxing out the retirement savings – I’m not clear on limits. I think its $5500 per year. Is that for IRA and 401k? I’m assuming that doesn’t include employee contributions.
- Set realistic goals for 529 savings and our FIRE date.