How I Plan On Becoming Net Worth Positive
By Literally Broke
After one year following the Dave Ramsey method I officially went rogue in January 2020. For starters, Ramsey’s conservative views really don’t align with my own. And I was also just really #over his one-size-fits all approach to personal finance.
Yes, I’m bucking tradition, and yes, I’m sure some personal finance experts would have some choice words for me. But I don’t really care.
Personal finance is personal, and TBH I would kind of love it if Dave Ramsey came for me.
I Pay Myself First
Every time I’m paid $100 is automatically deposited into my emergency fund. My current goal is to have 5k set aside in my emergency fund. Although this isn’t exactly the recommended three months of living expenses most personal finance experts recommend, it’s a nice round number that makes sense (and I’m still recovering from high school pre-calc, OK?).
At the end of the day, I’m a single woman without a car, mortgage, or dependents. Given these factors I’m relatively free from any serious financial obligations other than my cats and myself. As I take on more responsibilities (ie marriage, kids, whatever the future holds) this number will inevitably change.
I Invest 5% Of My Pre-Tax Income
I work in post-production so my schedule (and my income) varies widely. I often work 60 hour weeks which means my bi-weekly investments fluctuate quite a bit depending on overtime.
Here’s where this gets controversial: my company doesn’t match 401k contributions.
I know, I know. “You should start a Roth IRA.”
I will, I promise!
But right now automation is just easy. And I honestly don’t have the mental bandwidth to add another account to the mix right now.
I Make Minimum Payments On My Student Loans
I spend approximately $2,748.80 on my student loan each year (insert crying emoji). That said, all my loans have low interest rates (below 5%) so I’m not in a HUGE rush to pay them off. Until my emergency fund is funded I plan to just pay the minimum.
Once I have my emergency fund set I’m planning to redirect all my freelance income towards my student loans. I project that once my student loans become my sole focus it will take me about 1.5 years to pay them off, which is pretty good if you ask me.
Will I be debt free this year? No. Will I have peace of mind? YES! And that’s something money actually can buy.
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