A listener joins us for a financial check up in our This Financial Life episode. Jeff Wilson finds out what he’s doing well and what he could do better.
Jeff lives in the Midwest where he works for the Department of Natural Resources, it’s an outside job where he helps care for wild life sites. He burns down stuff for a living!
Jeff is 26, he has $24,000 in student loans. He’s paid off about $12,000 so far. His rent is $300 a month. His loan payment is $400 a month. He’s making about $1600 a month with some fluctuation.
He has avoided credit card debt, a big plus. But he’s paying the minimum on the loans. Even still, they could be paid off in about six years. His cost of living is very, very low and Jeff hopes to retire early.
He has about $24,000 in cash saved, the same amount he has in loan debt. It’s daunting though, to wipe out your savings in one fell swoop. At the very least, Jeff has to get that money out of a crap interest savings account.
I see that large number and it's scary to wipe it down to zero.Tweet This
This is the ideal time for Jeff to pay off those loans. He has a low cost of living, no credit card debt, a good line of credit if there were an emergency. Kill the loans!
Jeff has an IRA with $10,000. He also has a Betterment account. The spanner in the works is that Jeff is laid off for three months of the year. During that time he’s receiving unemployment but it’s not a lot.
Jeff is doing well and he knows what he needs to do. He just needs a little convincing. He could potentially be retired at 40.
All of our This Financial Life guests are savvy and doing pretty well and Jeff is no exception. At just 26 years old, he’s already on the path to financial freedom.
Betterment: Investing made better.
Mint: The better way to budget.