PROGRESS TOWARDS FINANCIAL INDEPENDENCE
- Jessica Schwartz
- Sep 29, 2014
- 2 min read
One of the truly great features of Mint.com is that you can easily pull up charts that help explain changes in your finances. Today I decided to pull up my net worth chart to specifically see the progress I've made paying off my student loan debt.
Looking at the exact numbers, I have managed to take my debt down from $57,727 (originally borrowed $54,605 so the extra $ is from interest) to $45,064 this year. That's a difference of $12,663!
To put this into perspective, let's look at my steady income (after taxes):
Income from main job: $16,908 (started working February 10th, 2014)
Income from 2nd job: $3,005
Income from Google Adsense: $807 (from youtube video)
Gift $ from parents: $1,000
$ taken out of trust: $6,000
_________________________________
$27,720
So $27,720 is my total income so far this year after taxes (but not including gigs). If I divide the amount of debt I've paid this year ($12,663) by my income ($27,720) I can see that I've allocated 45.6% of all my income to paying off my debts. I am essentially living off of half of my income, and I think that's something to be proud of.
What's even more amazing about this fact is that it shows me that I'm also on track for one of my largest goals, early retirement. Mr. Money Mustache is a blog written by someone who achieved financial independence early in life. I've followed it for some time now, and through this post, I've carefully studied the chart here:
According to the chart, if a person were to save 50% of their income, they would be able to retire in about 16 years. Using an online calculator I have determined that if I stay my current course by paying at least $1100/month towards my debts, I'll be debt free by July 2018. If I also continue to save 50% of my income after I finish paying my debts, I'll be able to retire 16 years after that, in 2034. I will be 44 years old, 11 years prior to what the government considers the usual retirement age.
That's 11 years of freedom to do what I want, how I want, when I want, without the pressure of having to work 40+ hours a week to support myself.
There are many things that could happen between now and then, but for now, seeing my progress align with both my short term and long term goals is inspiring and makes all of this planning worth it. Continue, I shall.
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