Over the past year or so, I have become much more interested in personal finance. Last summer, I started using a program called YouNeedABudget to track all of my spending. Doing that, I've managed to stop accumulating debt. I also have a debt spreadsheet that I use which allows me to snowball the payments to my various debts.
As you can see, my minimum payments are around $500 and I'm adding $200 extra towards the debts. The result of this is that I will be completely debt free in a little over a year. Combine both of those and I will be living within my means without any debt next winter. What is a young guy to do with his money then?
The answer, of course, is to start looking at retirement which is a tricky topic. I've been reading a lot about retirement in the past few weeks. I've mainly been looking into one question: How much should I save in order to retire? That is a hard question to answer, it seems. Luckily, I follow some smart bloggers. Mr. Money Mustache covered how much you should shoot for in retirement in his post The Shockingly Simple Math Behind Early Retirement. Using his math, I've arrived at a number to shoot for. If I had $1,000,000 in my retirement accounts, Hilary and I could retire and never work another day. That's a big number but thanks to the power of compound interest, I think that it's doable. In fact, I think that I could hit that by the time I'm 60 (maybe even earlier). Why do I think that? I crunched the numbers using Networthify. If anything, I think that's a conservative estimate since the stock markets have averaged about 8% growth over time and that graph is assuming 6% average growth.
So that's my next goal: retirement. Hopefully, I'll be able to save enough and even retire early!
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