We are Finally Debt Free!

It feels like it’s been forever, but we are finally debt free! We have paid off our student loans, credit cards, and even a car loan we had to take out. It feels fantastic to just have our mortgage as our only debt. With this freedom comes a new responsibility: handling our money carefully and figuring out what financial goals we want to accomplish next. Truth be told, this next era scares me more than the debt repayment period.

When we were in debt, we had concrete numbers that we knew we had to work towards. It was easy to look up balances at any time and see how much we owed. Those goals were tangible, and easier for me to work towards than an unknown goal. I think now we need to create new goals that have numbers attached to them so that we’ve got that same financial focus.

I feel overwhelmed in the fact that I’ve got so many things that we could be saving for: retirement, replacement cars, emergency fund, future kids, paying on the mortgage, etc. Don’t get me wrong, I am so thankful that we have been able to work so hard to become debt free and I want to stay that way forever.

I’m thinking that we can come up with a strategy to save and maybe even pay extra on our mortgage that will make us happy. We’re also going to have to keep our future career aspirations in mind: I would like to work part time eventually, and when we have kids I would like to be a stay at home mom. My husband will continue to be a chef and try to advance his career when possible. I’d like to have a substantial savings account built up for when that happens for any unforeseeable expenses.

The thing is: I don’t know how much I should save towards each category. And I’m still lenient about paying extra on our mortgage. What if we decide to move? I’m almost tempted to just put all of the money into one account and just not worry about it. I’m thinking that a good plan of attack would be to prioritize our goals, decide a time line on when we want to accomplish them, and then start saving accordingly. It will be a bit easier to digest when we break it down into smaller goals.

The next step of personal finance is one that I’ve waited a long time for. It will be a new chapter of our lives. To be honest, it does not feel quite as exhilarating as I thought it would! That’s ok- the point is we’ve done it! YAYYYYY!

We’re debt free!! What do you think we should focus on next?

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My debt payoff- updated!



The last time I updated this, I owed $12,333.78 on the student loan. As of today, the current balance owed is $11,899.22! I am happy that it has fallen below the $12,000 mark!

I got paid a quarterly bonus and put most of it towards the student loan. Also, I have paid off the Home Depot Credit Card that had 0% for 12 months before the promotional period expired.

Ultimately, I’d like to pay off this student loan before the year is over, but that seems like a pretty hefty goal, so I’m going to go with 2 years, or 24 months to have it paid off.

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Calculating my Net Worth

money-print-c10055084.jpegI decided today that I was going to calculate my net worth because I had never done so. I was surprisingly astonished when I received a net worth of $37,337! This took into consideration myself and my husband’s information, but I was really expecting to be in the red!

To explain our financial situation a little deeper, I am still in my early 20s and my husband is in his early 30s. We both make a decent income for the area of the country we live in. In fact, we earn almost twice more than the median average household income for our state. We own our own house, have a first and second mortgage, both have Roth IRAs, I have a 401K, and we’ve got a nice chunk of savings kept in a high yield savings account at ING. We both work full time as managers in our respective fields, I work in finance, and he works in the food industry.

I was pretty shocked to see the number come up that was displayed. We’ve had a little bit of a financial crisis lately, with a tree falling on our house, tearing a hole in our roof, and totaling one of our vehicles. We’re going to have that extra expense of the deductible on our home owner’s insurance and we’re going to have to buy a new vehicle in a year or so. Luckily a family member sold us her car for something we could afford so we don’t have a car payment right now.

Throughout my life I have lived frugally. It all stemmed from the lessons my mother has taught me. I remember working my first job training horses, where my Grandpa would give me $50 or so when he sold the horse because I helped out. I always saved that money, and was glad I did. We don’t buy fancy cars or spend money on expensive clothes or electronics. We live well below our means, and to tell you the truth, I love it. I love being as close to debt free as I can. Hopefully in 10 years or so we will be completely debt free. I think one of the keys to long term wealth is not generating more debt than you can handle. For instance, don’t go out and buy a new plasma TV if yours works fine. You don’t have to have the nicest things to “keep up with the Joneses”.

I am going to try to “bank on myself”, where next time I need a loan, say for a car, I’ve got that money saved up so I don’t have to get a loan. I’m going to set up a pre authorized transfer of at least $350 a month (same as a car payment) so that I can pay cash for the vehicle of my choice when the time comes, or at least have a good amount to put down on a vehicle so my loan amount isn’t outrageous.

This was a really interesting exercise and I strongly encourage you to do it as well. You may be as surprised as me to find out your real net worth!

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