Today’s episode features Rebecca from My Fat Purse.
She breaks down how she and her husband paid down his $180k student loan debt in just 2 years.
Rebecca and her husband gave up pensions from the military and are poised to hit FI in 5 years.
She talks about how powerful tracking their spending and avoiding lifestyle inflation was to this journey.
Listen, learn, and let us know what you think.
- She started taking her finances seriously after marriage
- Rebecca’s husband came into the marriage with $180k of debt
- They paid that debt off in 2 years
- Rebecca graduated without any student loan debt thanks to the military
- She studied mathematics for her bachelors
- Then she got paid by the Air Force to get her masters
Paying Down $180k Debt
- Rebecca attributes tracking expenses as the most powerful force to paying off debt
- They put all of one salary completely towards debt
- She also calls out how important it was to avoid lifestyle inflation
- That refers to slowly spending more money over time
- Rebecca’s husband was also in the Air Force
- He was supposed to be on scholarship but ended up losing on it
- She covers that tough decision on giving up a pension and chasing FI
Life After the Military
- Her husband took a slight hit in income and she saw a raise
- Rebecca stuck with working for the military as a contractor
- Her husband decided to completely change up his job
- They now have control over where they live but decided to stay in Colorado
- This was mostly due to her husband’s job and ease for her to find a good job
Path to FI
- They have purchased two homes
- One is their primary residence
- The other was for renting out on Air BnB
- That experiment didn’t turn out well so they sold it
- Outside of their primary residence, they keep it simple with a three-fund portfolio
- Rebecca feels they are five years away from financial independence
- Next Rebecca walks through why and how they combined finances
- They do keep separate accounts for some flexible spending
- Rebecca really emphasized tracking spending and how she does it
- She started with Mint
- Recently she transitioned to an app called EveryDollar
- She also has built a very robust tracker you can download
- True Partnerships: Rebecca didn’t put all the debt payoff on her husband, she knew that their goals were tied together and decided to help
- Tracking not budgeting: People often think you have to set limits on yourself when in reality, simply knowing where your money goes is the first step
- Not all real estate is gold: Just a nice reminder that while real estate is extremely powerful, it’s not foolproof as Rebecca found out
Call to Action
Take some time and completely track your expenses for 1-3 months even if you’ve done so in the past. This can help make sure you fully understand where all your money is headed.
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Facebook: My Fat Purse
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