Free Money Finance
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Posted: 05 Apr 2013 10:53 AM PDT
The following is the latest post in my "Reader Profiles" series. Each post in this series details the financial situation and challenges of an FMF reader. The purpose of this series is to help us all identify with people like us (in similar situations -- not all will be, of course, but eventually I'm sure you will find someone like you here), get to know the frequent commenters on the site, and hear some financial wisdom/challenges from people other than me.
If you're interested in contributing to this series, then drop me an email. The series seems to be very popular with readers and I need a steady stream of new ones to keep it going. Also, please leave constructive comments, questions, and so forth. Simply telling someone what a mess they have, how they have made poor decisions, and so forth is not helpful. There is a way to say, "That was a mistake, but here's what you can do to correct it" that both acknowledges the problem and offers a solution. It's this sort of feedback that this series is intended to solicit. Next in the series is FMF reader CR. He answered my questions (in red below) as follows: Please tell us a bit about yourself. My significant other and I are both in our mid-twenties with jobs close to home which have good opportunity for career growth. We purchased our first home in Midwest earlier this year. At this point in time we decided to combine our finances. Our plan is to get married in the next year to year and a half, we have not yet decided when. We have no kids at this time but we do have 2 dogs. Describe your financial situation (who works in your family, how your income is (general), how your expenses are, etc.). Currently we have several sources of incomes, the primary being from our full time jobs. My weekly take-home after taxes and a 10% contribution to my company 401k is 1000/wk. Year-end I typically have received a bonus around $10,000. Additionally I have part time job with a take home of around $350 bi-weekly and I do some bookkeeping for a few small companies on the side which generates about $300-400 per month. My significant other takes home roughly $1200 bi-weekly after a 15% contribution to her 401k. She also receives $5000 in bonuses annually. On an average month our income is about $8,000 after taxes and 401k contributions excluding bonuses. Expenses per month are:
Assets
Debt
What are the current financial issues you're facing (saving, paying off debt, etc.)? Our current focus is paying down the family loan, while we realize the loan is interest free we would have much greater peace of mind knowing that it was paid off. We typically try to throw as much extra cash as we can each month. Last month we were able to pay $2,500 off. Our goal is to have this paid off by the end of August or October at the latest. At that point in time I plan to quit my second job as I would like to pursue my Masters degree this upcoming fall. This will reduce our income but not significantly and I believe we will still be able to pay extra towards remaining debt. We would then focus on paying down the student loans because they are a higher rate than the car loan and the balance is much smaller making it easier to pay off. I would like to take our bonus income and use it towards investment. I have always been interested in real estate investment and believe I would like to purchase my first property in the next 12-18 months. The bonuses could also be used to pay off all remaining debt outside of the mortgage. What are your plans for the future (retire early, build your career, etc.)? Our current plans are to advance our careers as much as possible. I have excellent career growth opportunity at my current place of employment and she continues to move up in her company as well. In the next 4-5 years or so once I have completed my Master's and we have established our finances we intend to have 2 children. We would like the option to retire from our primary jobs after our kids have graduated high school. I would like to work part time as a financial advisor later in my career or post retirement because I have always had an interest in helping others with their finances and investments. Our retirement plans will be heavily contingent on our career growth and whether she continues to work full time once the children are born. What's your best piece(s) of financial advice and/or your general philosophy on personal finances? Set goals, pay yourself first and invest for your future. I have always been very aggressive when paying down any debt and save as much as possible and my significant other is learning to do the same. |
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