Advice on leanFIRE

Based on your situation, here's a tailored plan to help you move towards leanFIRE:

  1. Create a Debt Repayment Plan:

    • Focus on High-Interest Debt: List your debts from highest to lowest interest rate. Allocate a significant portion of your income (aim for 50% or more) towards paying off the highest-interest debt first. For example, if you have credit card debt at 20%, prioritize that over lower-interest loans. Use any bonuses or tax refunds to make lump-sum payments.

  2. Establish a Strict Budget:

    • Track All Expenses: Use a budgeting app like YNAB or EveryDollar to categorize and track your spending. Set clear limits for discretionary spending (e.g., dining out, entertainment) and stick to them. Aim to reduce non-essential expenses by at least 20% to free up more funds for debt repayment and savings.

  3. Build an Emergency Fund:

    • Start Small: Aim for an initial emergency fund of $10,000 (about 3 months of expenses). This will provide a safety net as you pay off debt. Once you reach this goal, focus on increasing it to cover 6 months of living expenses after you become debt-free.

  4. Maximize Income Opportunities:

    • Side Hustle or Freelancing: Consider leveraging your skills for additional income. For example, if you have expertise in your previous job or in the business you started, offer consulting services on platforms like Upwork or Fiverr. Aim to generate an extra $1,000-$2,000 per month to accelerate debt repayment.

  5. Invest in Financial Education:

    • Learn About Personal Finance: Read books like “The Total Money Makeover” by Dave Ramsey or “Your Money or Your Life” by Vicki Robin. Understanding financial principles will help you make informed decisions and avoid past mistakes. Consider joining local financial literacy workshops or online courses.

With your high income and newfound financial awareness, you're well-positioned to achieve leanFIRE within 5-10 years if you maintain discipline and focus. Remember, the key is to avoid lifestyle inflation as your financial situation improves.