Life After Debt

by Kay Lynn


I made the last payment to Sallie Mae (student loan servicing company) today.  It was the last debt, and the biggest, so by the time I got to it with the debt snowball the monthly payment averaged $2,000.

That motivated the budget makeover recently as we figured out where to allocate those funds.

Increased Spending

With costs of just about everything going up it’s time to increase spending.  We could have cut down the amount of driving or eat less meat but why?  We only fill up the car once every 10-14 days and don’t buy a lot of meat anyway.

Instead I’m upping the budget categories where costs have risen (gasoline, groceries, and cable).  That’s the limit of higher spending for now.

What we are not doing is adding any additional monthly obligations such as gyms or buying season tickets to the Chargers (I like my living room seats).  Nope, there is not any lifestyle inflation planned.

More to Save

Instead of increasing our standard of living we’re taking the opportunity to save for things that are important to us.  Since I want to retire in seven years, retirement savings is the number one priority.

One of my goals was to max out my 401K this year.  Last week I increased the amount being withdrawn from each paycheck to do just that!

Then there is savings for pleasure.  I normally put aside $200 a month towards our vacation fund.  We want to go to Italy in three years to celebrate our 20th anniversary and need to up the money set aside.  I’m going to start saving $450 a month towards the Europe trip and the annual vacation until then.

Lastly, I’m going to open a IRA and hope to max it out for 2012.

Freedom to Choose

The best part of being out of debt is the freedom to do whatever we want with our money.  Although my choices aren’t glamorous, I’m pretty excited about putting our money to work for us versus paying off past decisions.

What does being debt free mean to you?

photo by: Brad_Chaffee

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Money Beagle February 27, 2012 at 7:02 am

That’s awesome. I think a balance of increasing some of your spending but also increasing your saving is ideal. Sounds like you’re on the right path. Great work!

Kay Lynn March 1, 2012 at 1:30 pm

Thanks Money Beagle. We are increasing the savings much more than the spending.

Money Infant February 27, 2012 at 7:15 am

Congrats on finally retiring the last of the debt. I agree with you that the best thing about being debt free is the freedom to do what you want.

Kay Lynn March 1, 2012 at 1:37 pm

I keep thinking about Aretha Franklin singing Think (freedom).

Julie @ The Family CEO February 27, 2012 at 7:27 am

Congratulations!! Getting rid of that last debt must feel fabulous! And how fun to decide where the new money will go. Italy on cash will be wonderful.

Kay Lynn March 1, 2012 at 1:39 pm

Julie, I couldn’t enjoy a vacation if it meant accruing debt.

krantcents February 27, 2012 at 8:21 am

It means a lot mmore choices! I am able to put my money to work versus paying off debt.

Kay Lynn March 1, 2012 at 1:39 pm

Krantcents, that is a great way to look at it!

Michelle February 27, 2012 at 8:29 am

Congrats on paying it off! That’s awesome.

Jeff February 27, 2012 at 10:56 am

Congratulations on becoming debt free, but more importantly, on your decision to allocate extra funds towards retirement rather than increasing your budget. If you’ve been able to live happily on the tigher budget put in place to get out of debt, it would be a mistake to deal with your monthly surplus by expanding your expenses, though I imagine most people do that immediately.

Kay Lynn March 1, 2012 at 1:42 pm

Jeff, thanks for nothing our choice to expand savings instead of spending for the most part.

We really have everything we need so it wasn’t a hard decision.

Earn Save Live February 27, 2012 at 12:54 pm

Congrats! That must be such a great feeling.

We’re snowballing over $25,000 of credit card and personal loan debt this year. After that, we’ll tackle student loans. Like you, I love to travel and I can’t wait until we can make that more of a priority!

We live in Australia now, but will spend several months in 2015 working in Europe. While we’re over there, we’re hoping to a lot of travel around Eastern Europe and the Middle East. But we need to budget for it first. 🙂

Newlyweds on a Budget February 27, 2012 at 3:39 pm

Way to go! You have such an inspirational story!

Kay Lynn March 1, 2012 at 1:45 pm

Newlyweds, I think striving to pay off debt at your stage in life is much more inspirational although I appreciate your kind words.

I wasted a lot of years spending too much instead of saving.

Paul @ The Frugal Toad February 27, 2012 at 4:55 pm

Congratulations on paying off your debt! For me being debt free will allow us more choice on how to spend our money.

Jai Catalano February 27, 2012 at 5:44 pm

Are you guys enjoying life? If so then spend spend spend on whatever you want… As long as you don’t go back in debt. 🙂

Kay Lynn March 1, 2012 at 1:46 pm

No worries; we will not go into debt for anything.

SB @ One Cent At A Time February 27, 2012 at 7:21 pm

Welcome to the club! Be debt free always and spend only when you can repay in full..being debt free doesn’t mean you can go on spending spree. Off course you know this..

Jackie February 27, 2012 at 7:39 pm

And congrats! Being debt free to me is all about choices too 🙂

Ella February 28, 2012 at 5:29 am

Congratulations! For me debt-free means freedom!

shanendoah@the dog ate my wallet February 28, 2012 at 10:53 am

I am so jealous of you at the moment! Congratulations on getting the last of the student loan debt paid off.

Kay Lynn March 1, 2012 at 1:50 pm

No reason to be jealous. You will get there as long as you keep focused on the goal.

Dr Dean February 28, 2012 at 12:39 pm

Whoop!, fist bump, high five and all that! We added a HSA to go with our high deductible health insurance. Great way to save tax free for us more mature, healthy folks.

Kay Lynn March 1, 2012 at 1:52 pm

I have an HMO plan through work but would do the same if we had a high deductible plan.

Rick @ Invest In 2012 February 28, 2012 at 2:51 pm

Wow! Huge congrats! It must feel like a heavy rock’s been lifted off your chest.

Dannielle @ Odd Cents February 28, 2012 at 4:14 pm

Congrats! That must be a great feeling! You’re approaching your retirement debt free!!!!!

Julie @ Freedom 48 February 28, 2012 at 5:24 pm

Congratulations! An awesome job in working the “snowball effect”. $2,000/month debt payments are amazing! You must feel so much lighter and stress free knowing the debt is wiped clean =)

Kay Lynn March 1, 2012 at 1:54 pm

FYI, that average payment amount also included blog revenue.

Charlotte @ Out on the Veranda February 28, 2012 at 7:32 pm

Way to Go!!! We just paid off our house and both cars in January. The idea of being out of debt hasn’t really sunk in yet. Looking at saving most of it and replacing my carpet this year.

Kay Lynn March 1, 2012 at 1:55 pm

Congratulations! Having no rent or house payment would be nice!

Dave Hilton February 29, 2012 at 6:41 am

The Snowball definitely works…as long as you don’t stop half way through to try to make a snowman! Congrats!

Do you know (or are you going to learn) Italian? Definitely a place my wife & I want to visit at some point, too.

Kay Lynn March 1, 2012 at 1:57 pm

Dave, I have no plans to learn Italian other than basic phrases to aid our travels. Spanish would be a good thing for me living in California.

Promotional items February 29, 2012 at 9:30 am

Hi Kay Lynn,
I congratulate you from the bottom of my heart for the completion of your debt and I wish you enjoy your life after debt at its best. I know the pain of paying the monthly payments, its like giving up your precious dreams in installments. I am feeling very very happy for you.

Cruisingcouple2008 February 29, 2012 at 6:06 pm

Kay I love your blogs. This sounds so much like us. We are on track to be debt free before retirement too and already save in many of the same ways.

Cant wait to meet you..

Kay Lynn March 2, 2012 at 6:05 am

Thank you so much. I can’t wait to meet you as well.

First Gen American March 3, 2012 at 3:23 am

The thing that debt freedom helped me most with is the stress level. Although my job hasn’t changed, the fact that it could potentially be optional made me stress less about it in general. My performance hasn’t changed significantly, but my outlook sure has. I can just tell myself, “If it really gets that bad, I can always quit…is it that, not really.”

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