Reducing personal expenses to save more over time

[Romero Silvestre]

Hi everybody! New member and first time posting here. I’m looking to get started in real estate. I am particularly interested in rentals for their long term stability and wholesaling for raising cash.

Raising cash is why I’m posting today. As I said above I’d like to get started and am leaning towards buying a multi family rental. Where I’m getting stuck is finding liquid cash. I want to be able to raise funds faster for a down payment and in general.

My questions is this: Does it make financial sense to use a chunk of cash I currently have saved to pay off some debts to reduce my monthly expenses? The way I see it is that by having fewer fixed expenses I will be able to save more money faster. I would recoup the initial chunk in roughly 6 months and would be able to put away much more than I can now.

Any and all advice and comments are appreciated. Please share the reasons you feel this is good or bad. Thanks in advance and I look forward to being on here much more!

[Brett Baginski]

Welcome Romero!  It really depends on what debts you are talking about.  If you are paying 20%+ interest charges in credit card debt every month, then I would say pay this down.  Something like a car payment or school loans are much lower interest rates.  You will probably save most of your money by creating a monthly budget for yourself and really analyzing how you are spending your money.  Going out to dinner three times a week with the family can really eat up a lot of cash, so something as simple as cooking more meals at home can make a huge difference.

If you really want to get technical, look over your expenses the past 3 months and see where you are spending the most and where you can cut back, then stick to it.  If you decide to pay off the debt you have, you have to be sure to not to keep those same spending habits that got you there in the first place.

Hope this helps.