On The Loose Finances: The First Step on the Trail to Financial Independence

Today we hit an important milestone here at Home On The Loose HQ. As you can see from the title, we finally hit a zero balance on our credit card!! Whoops of excitement bounce off the walls, impromptu fist pumps abound and The Dance of  Joy  has been performed almost constantly. You might say we are a little over-stoker about it.

If you are rolling your eyes and wondering what the big deal is; we have carried a large credit card balance since our wedding ten years ago. While we have aggressively paid it down a few times life events such as our house flooding out, our school closing down and the birth of two children have caused us to let spending on credit get out of hand. I do not regret for a second some of the decisions that have gotten us here. Going back to school to become a classroom teacher (becoming an intern, making a pittance and taking on student debt) so that I could spend more time at home with my wife and child (now children) has brought me memories that I will cherish forever.

However, during my Christmas/New Years reading glut, I stumbled upon Mr Money Mustache after he was interviewed on the Tim Ferris Show. This blog, written by a man who lives just a short hop north of us, is an entertaining and sobering punch in the face on the subject of personal finance.  Mr Money Mustache “retired” at the ripe age of 30 after amassing enough wealth to live comfortably on for the rest of his (and his family’s) life.

While we here at Home On The Loose love our jobs, we have often dreamed of having the means to, say, take a trip to Machu Piccu, live in Europe for the summer or climb in Australia. But debt and spending have always prevented us from saving enough to make these trips seem feasible. Enter MMM and the blog post titled: News Flash: Your Debt Is An Emegency!!  This post was the proverbial kick in the ass that helped galvanize us into action.

The first step,of course, is paying attention. Another shot in the arm from Tim Ferris in the form of a quote I have heard a number of times on his show: “That which gets measured, gets managed” – P. Drucker  We have created (free) accounts with Mint and on Personal Capital. These two services help us to understand our inputs, outputs and spending habits and have helped us get a handle on what it is we are doing with our money. 

The past two months we have moved some existing resources around, cashed in some investments and, today, fully paid down our credit card debt! While I was celebrating, I began looking through our account data. We have given the credit company over $20,000 in the past year. AAAAARRRRGGGHHHH!  Eff that! 

While the credit card has been our largest interest percentage debt, we also have student loan and car loan debt, plus a mortgage on our house. (Ever look up the historical meaning of the word mortgage? NOT cool) The crippling load of interest on borrowed money has been written about exhaustively by people more qualified than I. If you want to get fired up about nuking your debt, peruse mrmoneymoustache.com, earlyretirementextreme.com or any of the other multitude of financial independence blogs and podcasts out there. Suffice it to say, debt: Bad, paying down interest for the rest of your life: Really Bad, financial freedom to live the life of your dreams: Good!

I am taking a stand here and stating that 2017 is the year we  move towards financial independence. The first steps have been taken: We are paying attention to our spending and, now, no more bleeding out 16% interest on our credit card. Next up is to nuke the student loan debt, then send the loan we took out on the Sprinter. (MMM would punch us in the face for borrowing to buy a car, but I’m going to justify the cost for now as it allows us to bring in rental income during the summer while we live in the van) Six years from now we should have the house just about paid off and be entering the realm of limitless possibility.

So how are you doing? Are you shaking your head at our financial foolishness or slapping yourself because you are in a similar position as ourselves? Wherever you are, make sure that your money is helping you to take the next step towards living the life of your dreams.

See you out there,

Jim

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