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.
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 Last week I increased the amount being withdrawn from each paycheck to do just that!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