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Debt Free? What comes next?


As my debt free date grows closer, I find myself thinking about the next step. I’m about 6 months away and it’s an incredibly strange feeling. I have had some sort of debt since I bought my first car at 16. I’ve spent half my life paying someone back.

When my debt is reduced to only my mortgage payment, what will I do?!?

If you had asked me, when I first started this journey, what I would do when my debts were paid, I would have said, “I want to remodel my 50 year old kitchen” or “I want to restucco my home!”

The fantasy has changed.

My fantasy now consists of a paid off mortgage and growing mutual funds.

I can’t tell you how strange it was to sit down to deliberate over the next step. Obviously we are going to save a larger emergency fund and aggressively pay our second mortgage but my dreams of ‘big shiny things’ are fewer and farther between. OK, I’ll just spit it out…

I’m an addict.

I’m addicted to the good feeling I get when I see zero balances.

Have you thought about your life after debt? What are your plans (other than investments and mortgage payoffs)?


  • Reply Kyle Heon |

    Good for you. I’ve been following your journey. My wife and I did something similar a few years back and while we didn’t have quite the debt you started with, we knocked it out quickly. We then got lazy, enjoying the massive “raise” we got. We are currently building our first home (first built and first to own) and I agree, paying off the mortgage as quickly as possible is high on my list. I want to be able to put my mortgage money away into mutual funds so that we can really live. Good luck and keep up the good work.

  • Reply Jane |

    Kudos on getting debt free! What’s next? Once you are debt free, you’re living paycheck to paycheck. As long as that paycheck keeps rolling in and you have no big new expenses there’s nothing wrong with that. The next step really is safety. make sure you have enough insurance and beef up your emergency fund.

    After that, you can position yourself to financially pull ahead. Start saving for purchases in advance. Put away some for your next car, that big trip you plan to take in a couple of years, junior’s college education or whatever. Remember that your biggest purchase is not your house; it’s your retirement, so don’t forget that! Once you’re out of debt, it’s time to plan to enjoy your money now and for the rest of your life.

    Keep up the good work!

  • Reply Jenn in Michigan |

    Congratulations! Other than watching your mortgage go down to $0 now you can start watching the numbers in your savings and retirement get bigger. I think that will be much more exciting.

  • Reply T'Pol |

    I am debt free. I own my two bedroom apartment free and clear and I do not owe anyone a single penny. I had built a large emergency fund in the past and thus I quit my horrible job last year right in the middle of the global crisis. I am doing some free lance management consultancy. It is not enough to cover all my expenses yet but, I am sure, I will get there. Being debt free is so empowering… I am sure you will enjoy this new type of freedom and love it.

  • Reply divine and debt free |

    I am also about 6 months away from debt freedom and its been a 3 year journey. Prayerfully my house will be sold and I will be COMPLETLEY debt free. I know one thing I will NEVER have a mortgage again!!

    I think the first thing I will do is beef up my emergency fund, then do some traveling since its been a long road I really wanna treat myself! Congrats! its fun to think about!

  • Reply Debt-free Dan |

    I’m already debt-free including the house and it’s awesome! I agree with the comments that debt-free people should build up their emergency fund (following Dave Ramsey’s baby steps). I have mine as well. My wife and I are reasonably frugal, but our investments allowed us to buy a second house debt-free as well. We have been able to allow a jobless family to live in the house for the last 8 months.

  • Reply Janelle |

    We have a long road to go, but we will be debt free minus our mortgage and student loans in about 20 months. I am just looking ahead and thinking how freeing it’ll be in 10 years from now, when we are completely debt free, large emergency fund, investments growing and we’ll actually be able to help our kids with college expenses! Its exciting to watch our total debt load drop a huge chunk each month. I love this living on less thing!

  • Reply Nicole |

    I know just what you’re talking about. Both my husband and I lost our vehicles in the last 12 months, his to an accident and mine to a break down. My natural thought would have been to buy another one and have a car payment but thanks to Dave, that is NOT an option. Looks like it will be a $5000 used car to get us through until we can save for something better. The smell of new upholstery doesn’t have the pull it used to : )

  • Reply JMK |

    We’re down to just our mortgage. Every week once the pay has arrived and that week’s credit card charges are paid off, I skim off the excess and either make a contribution to our retirement accounts or an extra mortgage payment.

    When we cleared up the credit card debt and line of credit, we briefly considered loosening up the frugal budget we’d been living with, but found that we were so used to our lifestyle that spending more just because we could seemed wasteful and didn’t hold the appeal it might have years ago.

    So we decided to continue with the same budget and just redirect all the excess to the mortgage and retirement savings so that we can retire early. The one splurge we have introduced is travelling on a regular basis. Yes, we could retire a couple of years earlier if we’d put that money into the mortgage or investments, but that’s a trade off we’ve decided is worthwhile. You never know if you’ll be in good enough health in retirement to do all the travelling you’ve been putting off.

  • Reply Nichole@40daysof |

    I have found that life after debt is more difficult than I thought it would be. Don’t get me wrong, I don’t mean to sound like a whiner. I’m grateful we got out, but disappointed that I’ve slipped back a few times. We also moved to be closer to my husband’s job and made the interesting decision to buy a larger home. The combination of me still having some maturing to do and empty rooms taunting me has caused some problems.

  • Reply Jen |

    I’ve been debt free for several years. In that time I bought a home (with a standard mortgage), created an emergency fund, and maxed out my 401(k) contributions.

    Now I am working on increasing my emergency fund from 6 months to 1 year’s worth of take home pay (easier for me to calculate than expenses), saving for large purchases, and pre-paying my mortgage. My method is to pay all the bills, then divide the surplus between my three goals. In months when the cash flow is tight, I don’t save extra or pre-pay on the mortgage. I’m disappointed when that happens, but I just tell myself that I’ve still got money in the bank and overall I am doing well.

  • Reply Amy |

    I will make the last payment on our Home Depot 0% transaction next month and we will be debt free for the first time, ever. No mortgage, no car payment, no loans, no debt (not even 0%!). I thought I had been debt free before, but I went back to check my net worth and I had those 0% balance transfer arbitrage deals that were going on a few years ago. So, never totally debt free and we are very excited! Our plans – just to beef up our retirement and cash accounts.

  • Reply Mama Koala |

    We are getting close-targeting the end of August. Up next? Building Emergency Fund, Car Replacement Fund, Vacation, and maybe a new laptop.

    (fun mixed in with beefing up financial security)

  • Reply Charles |

    Be it ever so humble there is no place like a PAID OFF HOME..I am a man that lost my home was left to raise 2 daughters 4.and 8 on my own ,The wife took off with another”man” and i never seen her again that was 32 years ago..I had no other family . No help .No job.But i started a business..One thing about being down and that is .Well theres only one way to look and thats UP..Anyway long story short both girs are married (Happily) ME ,well i never remarried . Sold the Biz ,Paid Cash for a beautiful Condo…Have enough that i am financially secure .As long as i live a frugal but happy lifestyle .Everyday “I SMELL THE ROSES” So to speak .Anyway i find that once your accomadation is YOURS All paid for .Then the rest is Groceries etc..Dosent take much to live,,BUT PAY OFF TOUR ROOF .(No matter how humble)

  • Reply Randall |

    I am proud to say that I will be debt free including house in three weeks. I am not sure how to feel, it feels like a dream. I have always paid more than the payment on all the bills I have and now it’s all over. Not really sure where to go from here. I will get 6-12 months of expenses built up, which should not take long then I’m am not sure after that. It’s a great feeling that I wish all could experience.

  • Reply jack foley |

    Yea I have a nice bit of credit card debt and like you, i imagine what things will be like after it..

    In saying that, when they are used properly, they are a wonderful asset to have

So, what do you think ?