What happens when you are actually debt free?

[missmanny]

Villagers,

with only 8 days left until I send in my last ever payment I am wondering what other who have become debt free have done to keep up their motivation?

Or what your plans are for once you are debt free...

At the moment I am on count down until the last payment is gone and then I plan to fully fund my emergency fund, but how do you keep going?

I put $750 every two weeks onto my snowball and so that money will be available to fund my 6 months of EF (this won't take very long though only 3 months or so).

My evil inner devil is already staing to think of all of the things that I will spend my money on once I have got there. It has been such a hard slog to get to this point with the debt payoff as the goal and it has kept me going.

I am really worried that once I get there I will fall back to my wicked ways.

[Bethany]

Excellent question, I'm not there, so I can't answer. I've never thought that far ahead..........

[Wendy99]

It's awesome being debt free ... I think fear keeps dh and I debt free? When we think of how much stress & interest were spent, we just want to stay this way. That being said it's ok to dream about what you want etc - we do that all the time, but now we do it with control. We dream of a newer tent trailer (and I even look them up online to see prices etc); however, the difference before I would have jumped on it and bought one, paid later. Now I know I need to save up some more EF & a new to us car/van first. It's hard and we slip, but nothing like we use to.

CONGRATULATIONS !!


**** just an extra note, wasn't sure if you meant debt free by means of cc & bills ... or debt free all together ... we aren't completely debt free - still have to pay for our mortgage ....

[forHISglory]

Congratulations! You must be so excited that you can barely sit still.

I remember when Hubby and I crossed that finish line. There is the feeling of jubilation and a profound sense of freedom. For the first time (other than taxes), the money belongs to US!! And now we have the freedom to use it as we wish.

Here's what we did: We continued to save. We tracked down the best CD offers from the various banks, and bought a CD every month. We bought some US savings bonds. We added to some other investments. Our motivation was fueled by watching the investments grow on-line. I could plug into the bank sites and see the difference as the CDs grew. Our determination to save was what allowed us to retire early.

But even more than saving, was the freedom to give. We could give more freely to our church (we had always tithed, but now we could give to other aspects of church above and beyond the tithe), we could give to individuals in need, to community charity drives, and to other charities of our choice. We could meet some needs of our family members.

We really didn't change our lifestyle or make any large purchases. Our buying patterns continued to be about the same. But being able to save and give gave us pleasure.

[itlw8]

I am close to paying off CC but then I have done that before


What we failed to do in the past is build up a freedon account to allow for needs.

I still need to pay off mortage and keep saving for currents needs and the future.

[missmanny]

Thanks Wendy99 - I think that fear will be a great motivator for me too.

I am already scared to death that I will end up back where I was 12 months ago - lets just say I could never go back ther again.

I will be completely debt free - no mortgate - but we rent so I will still have rent payments.

buying a house is on my list but not until I have saved up enough to put a substatial ammount down / pay cash (this probably won't happen though as housing prices is Oz are fairly hefty.

forHISglory - you are right I can barely sit still. I have listed a heap of things on ebay that will end before my next pay - if they sell and I get the money then that wil be going stright to the debt, 8 days just feels like too long!

[daughter of pearl]

I heard a rumour that angels sing, and George Clooney shows up at your door to congratulate you...no? Crap, that's been keeping me motivated...

Seriously, it is a good question...maybe the fear of doing it again...

[missmanny]

LOL - daughter of pearl.

If george clooney comes to my door to congratulate me then I will get in debt and pay it off all over again!

[ladykemma2]

i would give myself a one month reprieve, spend that 750 on a reward.

for me, it was replacing all the dishes that had broken over the past year and what i lost in the divorce. (I HATE incomplete sets of dishes). the I got right back on track with the 6 month EF.

[missmanny]

ladykemma2 - that is a great idea.

I have already promised myself a hair cut (haven't had one for nearly a year)

Might have to see if there is anything else I would really like.

maybe a celebration is the way to go.

[peanut]

We gave ourselves a bit of a celebration, then sat down and figured out all our goals and what we wanted to save for next. By keeping our goals sharply in focus, we find we keep our spending in check.

For awhile DH went wild spending money, but I realized it couldn't go on forever. I quickly sat down with a goals list we'd done earlier this year and tried to put a price tag to the goals...just a rough one. I showed it to DH and he got depressed again. But hey, at least we're being realistic. We simply have more goals than we can possibly afford the next five years before he retires. It means we'll be looking at different ways to accomplish the same ends (ie. instead of traveling half a continent to a creativity conference, I'll go to one in the city where my brother lives and take room and board with him for the duration).

Jean

[britbunny]

Hi,

Great question and congratulations in advance of your own debt freedom.

It was really weird for us when we became debt free (other than that house). It was like when you've finished your exams - you've spent all this time focused on one thing and it's taken all you time and energy and then, all of a sudden... nothing. You don't need to give it any of your energy anymore. We had a bit of a celebration but that was quite hard too, as we felt a bit guilty to be spending the money, even though it was ours to spend. (That feeling wore off thankfully!)

What keeps us motivated to stay debt free? It is its own reward, less stress, more choices, being able to say yes to things, give more and be more spontaneous. Beforehand we would have to know about things in advance so we could squeeze the budget a bit, but now if we get a call from someone out of the blue we can just nip out to see them etc.

We had huge lists if stuff we wanted to buy when we had cash but when it came down to it, for a lot of the things we just wouldn't part with the money. So we still ended up only buying what we REALLY wanted. You get so used to budgeting it makes it easier to self-regulate, prioritising seems to become easier imo - it's like the weightwatchers thing "no spending is as good as being debt free feels" lol.

[Michelle]

You must be so excited. I can't wait until I'm able to say the same thing

I won't be debt-free for a while since we have a mortgage, but I did recently pay off my CC's and cars. It's funny because the more money we have, the more we worry about what to do with it. It's like you said...we had a goal, and now that we're done with that one, we need to move on to a new goal...but the new goal is almost optional. We could technically just start spending money...spending it to fix up the house, decorate it (because we've never had the money to do so), go on a vacation, etc. There's too much "freedom" now, and that's a bit scary in some ways.

As a previous poster said, we are somewhat motivated by fear. We know that at any time, we could lose our good financial standing, and if we don't prepare for that (by having a substantial savings in place), then we have no one to blame but ourselves for circumstances that may make things difficult for us financially. I don't want to hit a bump in the road and look back and say, "If only we had saved that money instead of going on vacation or buying a new living room set, or..."

Right now our goal is to build up a fully funded EF and a car fund (our minivan isn't going to last much longer).

I hope my rambling made some sense, and good luck to you as you enter this new phase in your life

[TheRootedNomad]

We still hav ethe mortgage to pay down so w eare not completely debt free. However, when we crossed the line of debt free, except for the mortgage we had a small celebration.
So yes, breath for a month, splurge a little, and figure out your next goal.

We are multi-tasking, which is very hard to stay motivated with, so we break some of them down to smaller steps.

Increase our retirement savings
~ We break this down into goals of percentage increases to the funds or dollar amounts to CDs. Every three months we re-evaluate. For this quarter we are both upping the percentage of our work plans a couple of percent.

Emergency Fund
~ While we had considered this complete for awhile we have decided recently that it needed beefed up some. Currently we have the mini-goal for the next 6 months to put the mortgage payment amount into a CD each month until we finish the 6 month ladder. This will assure 6 months of mortgage payments.
If we have extra to build with we do. The goal is to get the EF to 6 months of expenses if neither of us was working.

Mortgage
~ We set a goal number to try and pay extra each month.
~ We also have an inflated goal number for the year so that we stay motivated to not forget to throw extra money here when we get it

Renovation
~ We save for our house projects in pieces and do them as we have the money. Currently I'm working up a budget for the kitchen as we have the money to complete the rest of the projects we are working on. We'll finish them while preparing to role into the kitchen work.

Again it might be psychologically easier if we said. Ok, lets finish beefing the EF. Next lets pay off the mortgage, and so on, and occassionally we do switch geers and focus on one thing.

Our goal is to get to the point where we have all our ducks quacking happily (and producing more ducks) so that then we can then rotate out working and not working as we please.

In your case you may want to review your retirement directed funding, finish off the EF, and then save the down payment for a house, if you want a house. That snowball will start rolling pretty fast. Whatever you decide to do I know you will agree it is a WONDERFUL feeling to get to choose what you feel is the best place for your money to go instead of being obligated to send it on debts.

[homemaker66]

Congradulations on your sucess. I would go get a nice makeover and spoil myself and DH for a job well done. Good luck of staying debt free we will be there in a couple of years hopefully. GREAT JOB!!!