It has taken a long time for me to realize that being in debt was a decision I chose. After finding FIRE I made up in my mind that debt would no longer be an option for us as a family. So to start this journey I had to figure out what all our debt was made up of. Upon listing all of our debt this is what I discovered:
- Mortgage (4.68%)
- Student Loans (6.8%, 4.04%, 3.51%)
- Car Loan (4%)
- 401k Loan (5%)
- Solar Panels (0%)
The great thing about our situation is that we didn’t have any credit card debt (we used the debt snowball to pay them off in 2017) and the debt we had carried pretty low interest rates. The plan I came up with involved using the debt avalanche, with this plan I chose not to include our mortgage or solar panels. I chose not to include the mortgage at this time because it is such a large debt, so it will be the last and final of our debt that we tackle. I didn’t include the solar panels because, although I want them paid off before the 20 year term, they are interest free and I can use that money towards our other debt. So here is the order we’re paying off our debt currently:
- Student Loans (6.8%)
- 401k Loan (5%)
- Student Loan (4.04%)
- Car Loan (4%)
- Student Loan (3.51%)
As of March 1, 2019 we have paid $6,156.76 towards the student loans. Now I am feeling even more motivated to keep going and stick to the plan.
In a future post I will detail how we were able to pay $6,156.76 towards our debt in just 5 months. It may not even seem like a lot to some but for us it is a HUGE accomplishment.
Until next time!
T.L.Forbey
Forbey Financials 