Tomorrow I will add another $1000 to my debt repayment. The majority of my debt now is zero interest, so it is not as much of an emergency as it was when the average interest rate was in the 20s. However, this is still an emergency. Setting financial goals can help you gain financial independence.

With the end in sight, this is where things get even more difficult. It is easy to fall back on old habits. We have purchased a few things recently that we probably did not need. Our spending has increased as things start to go back to somewhat normal. Much of this spending has been medical.

Since the start of the pandemic, most of the offices have been closed or virtual. Now that things are returning to in-person we have been making those regular appointments again. Health care is expensive in America, even with good insurance.

Stay Motivated

What keeps me motivated? The fact that the $1000 I will be putting towards debt could have been put into savings or invested instead.

I have spent the last year reading personal finance blogs and spending time on Reddit. Since then I have been tracking my net worth and see the positive returns. Had I started this journey earlier I would be in much better shape.

It has helped to discover I am not necessarily in a bad situation as I have learned from the blog Late Starter Fire. Of course, I would love to be in a better place, but at least I am on the right path now.

Basic Financial Literacy

While the last of my debt is zero or low interest, allocating the funds instead of saving is throwing away money. I could not even tell you what I purchased with this debt.

Doing the math, the current interest rate on a high-yield savings account (HYSA) is 0.8%. Earning $0.67 each month may not be a lot but it is better than spending $2200 on debt, the amount I am currently putting towards my debt.

Adding on to that, the entire $2200 could yield $1.47. Does not seem like a lot but starting with my current balance (10,570) and adding that on a monthly basis, by the end of the year my balance would be $37,169.

If I calculate this same amount using an investment average rate of return at five percent, which is on the low side, this amount could be $38,236. That is a full debt payment just in earned income! In ten years that same amount would be $349k.

Have Short-Term Goals

Sometimes it is overwhelming to plan out ten years plus. You can lose sight of your progress can slow. In some cases, you may have an emergency or some other issue that causes you to get side-tracked.

It helps in these situations to set shorter goals. My immediate goal is to pay down all debt. This is over the next four months. I do plan on relaxing my debt payment plan over the holidays but still contributing enough to be debt-free by the end of this year.

This accounts to over $30k in debt paid off in just over a year.

My initial goal was to get rid of the higher interest debt which I did so immediately. Then I began attacking the rest. Recently we started spending a bit more as things have slowly gone back to normal. This has caused me to rethink my ultimate goal but not lose progress.

I still increased my retirement savings, added to my investment accounts, and paid more towards my vehicle. We just slowed down the progress slightly.

Long-Term Planning

In the past few years, I have changed my goals. Largely this is due to an increase in salary and the ability to save more towards retirement. It is also a realization that I have not traveled as much as I have wanted to. This year I spent over a week in Southeast Asia and now more than ever I want to return.

My long-term goals are now to retire with enough money to travel and maybe even try to live in Thailand or another similar country. My daughter has been talking about moving to Korea and being close to her will make it easier.

I have also been working on diversifying my investments. I want to have enough money to retire but also have enough in the interim to travel and make plans to relocate. I know that all of these will take a significant amount of money, but starting the process now I will be better prepared for the future.

While I would have loved to start earlier, reading some of the other posts on personal finance blogs I know that starting now is not a bad thing. I may just have to make up for lost time. With my salary being where it is now I can put more into retirement.

If You Make More, Spend the Same

A few years ago I was living paycheck to paycheck and since my salary virtually doubled I no longer live that way. In the first few years of this salary, my spending did increase but I have adjusted it down again to match my current spending.

Having a proper budget has allowed me to keep the spending I had when I was making half and living off of that. I have also been spending time investing in my skills and education. These will help me retire with a better plan.

My end plan is to hopefully find a teaching job as I approach retirement. Something that I can continue when I do finally retire from my 9-5. Basically I am hoping that a job like that would at least give me spending cash and I can live off my investments otherwise.

Having a good long-term outlook on finances helps you stay on the path and not get sidetracked. Make sure you set realistic goals though and not just an arbitrary number.

Good luck on your journey and don’t lose sight of your goals.