Today we dissect listener Andrew’s finances. What is he doing right, what is he doing wrong, and what can he do better. This financial life.
Andrew is a long time listener and today he shares his financial situation with us to get some advice.
Before Andrew found LMM he had student loan debt, credit card debt, high fees on what investments he had, no budget AND he bought a new car. Andrew recently married and brought about $75,000 of debt into the marriage while his wife had about $22,000 from student loans.
They have paid off about $20,000 in a short amount of time. He moved his investments over to Vanguard to save on fees, and set up a budget. Andrew lives in Minnesota and the couple make about $100,000 a year. They pay just $600 a month in rent on a two bedroom apartment. The monthly living expenses are about $2,000.
They want to buy a house but are first working to build their emergency fund and pay off debt. The student loans have a high interest rate, over 6%. He is paying $2,300 a month in loan payments. Andrew should speak to CommonBond about getting a lower interest rate. He is currently using the snow ball method to pay his debt but we recommend the stack method.
Andrew has a Roth IRA and is working toward maxing that out by the end of the year. Once the debt is paid off, in about four years, Andrew would like to travel before buying a home. Buying a home should not be a given. A lot of people just do it because it’s the next thing you do but it’s not for everyone.
Because he likes his job, Andrew is not in a big hurry to retire early. But it’s not if you don’t have to work no matter how great your job.
We’re glad that we were able to help Andrew take control of his finances.
Sebago Bump: A rich, black ale.
Mint: The easy way to budget.
Betterment: The smart way to invest.