At 30, I’m $45K in debt but landed a $125K job—how do I work towards early retirement?

It’s never too late to get out of debt, and a 30-year-old Redditor is planning their next move after landing a job that pays $125,000 per year. The individual also has $45,000 in debt and turned to the FIRE subreddit for advice. The individual wants to embark on their FIRE journey to achieve financial freedom.

The post got several comments from Redditors who offered their suggestions. Luckily, the Redditor is only 30 years old, so the individual has plenty of time to reach their long-term retirement goals.

Address Your Debt and Expenses

One of the top comments suggests that the Redditor works on their debt and controls their expenses. A $125,000 salary creates more opportunities and can make it much easier to pay off the debt. However, a high salary is only good if you keep most of the money. Reviewing previous credit card statements can reveal opportunities to cut costs.

The original poster explained that the debt came from student loans and credit card expenses from not working while in school. It sounds like a short-term issue that the Redditor should be able to address with the new salary. 

Live Below Your Means

Some commenters suggested that the Redditor lives cheaply and below their means. This approach will allow you to invest more money into assets like stocks and real estate. While the Redditor should prioritize debt before investing, it’s good to start thinking about additional investments. 

If anything, the Redditor may want to max out their retirement accounts while paying off credit card debt. However, this approach only makes sense if you can pay off the credit card debt within one year. Credit cards have higher interest rates than the types of returns you can make in the stock market in one year. The caveat with retirement accounts is that you can invest in traditional retirement plans while lowering your tax burden. A lower tax bill can make it easier to pay off credit card debt.

Find A Second Job

The Redditor sounds ambitious and is currently on the hunt for a second job. We don’t know if the Redditor has any family, but if the individual is living alone, now is the best time to make extra money.

The Redditor can work on side hustles while looking for a second W-2 job if that’s the path the individual wants to take. Side hustles are easier to start and can be quite lucrative if you continue to work on them.

It’s important to note that the second job doesn’t have to stay with you forever. Some people only work a second job for a few years until they reach a significant long-term financial goal. The Redditor seems poised to pay off the $45,000 debt quickly and make meaningful progress toward their FIRE goals.