by Tricia
Our pizza party to celebrate our debt payoff went well on Saturday. I can’t say the same for the morning after. That pizza tasted so good (take out), but it hurt so bad LOL. The heartburn was enough for me to declare that we are definitely going back to making our own pizza.
I thought I would feel a little different after paying off our debt. Like maybe I would want to kick my feet up for a while. You know, take some deep breaths and relax a little. Instead, things are back to normal. We went to the grocery store and still searched for the deals. We are still working our jobs and working on our business.
I think my sights have already shifted from our debt to everything else we need to take care of financially. We have a lot yet to do. Here’s what our list looks like so far:
- Increase Emergency Fund to $10,000
- Start Saving for a Car
- Start Retirement Contributions
- Start Savings Account for New (smaller) Home
- Increase Mortgage Payment by 100%
To be honest, I look at that list and wonder how the heck we are going to do it. I start to feel like I did way back when we started reducing our debt. There’s a lot to accomplish and I get that feeling of “It’s going to take forever.” Talk about déjà vu.
But then I look back at what we did. I am taking a deep breath right now. We can do this, and we will do this. The first order of business is to get our emergency fund up to $5K. Then we start splitting up all extra money to the four savings baskets as start paying more towards our mortgage. I’m not sure how our extra money will be split yet (except for the mortgage – I would like to double the monthly payment).
Now I’m feeling excited. Just the thought of having $10K in our emergency fund puts a smile on my face. Rome wasn’t built in a day and this isn’t a race. We’ll get where we’d like to be. Just like with paying off our debt – it is going to take some time. Patience young grasshopper…patience.
As you said Tricia “Rome was not built in a day”. It is good that you have clearly defined future financial goals and are keeping to the strategies that got you out of debt. Too often people work toward debt elimination and having achieved it have no clear idea of what the next step will be. In addition some people forget the strategies that they used like looking for bargains and feel that their new status is an excuse to spend money. What tends to happen is that they find themselves back in the pits of debt and that the journey out is harder.
I’m so happy for you. Your blog has been inspiring me to do the same and I’m glad that you’ve finally reached the finish line. Now it’s my turn… 🙂
I am ECSTATIC for you!! I had gotten away from blogging for a few weeks due to busy life and four teens, and when I read this site today, I just wanted to give you a hug!! JOB WELL DONE! I wish you could keep this blog…or keep blogging somewhere on how you go forward from here, accomplishing the goals you have stated above. You have been such an inspiration! I still have so long to go…sometimes I feel like I will never see the light at the end of the tunnel. But I keep rereading your “archive” blogs and it gives me greater inspiration to keep going. Thank you again. You and this blog have been such a blessing in my life these past months!
God Bless!
DEBT FREE JOURNEY
debtfreethroughchristwhostrengthensme.blogspot.com
Congratulations. I think it was great that you celebrated your achievement. I felt the same way when we paid off our big debt– like something would change. It was kind of depressing to me that we still had to count pennies and their was still so much to accomplishment. It is a hard task to stay on track with your goals and not fall back into the debt trap trying to “reward” yourself for all your hard work. We “deserved” new furniture and are now working on paying that off….. Good luck with all your new goals.
Hi Tricia,
First off, congrats for becoming debt free!
Secondly, I just have a question. Why double your mortgage payments if you plan to move into a new home? I realize it’s a personal decision, but I’m curious. Thanks! By the way…I’m looking forward to being CC debt free before the end of the year!
Don’t you still have a substantial amount of student loan debt? Why are you concentrating on extra mortgage payments instead of paying off that, since the interest on the home loan is tax deductible and the interest on the student loans isn’t. Just curious . . .
Judy – we do hope to have a new home in the very near future so we will more than likely need a new mortgage. I would like more equity in our home than we currently have (which isn’t much) so we have more freedom when the time comes. If we can pay off the mortgage by then – even better.
Congrats on your CC debt!!
ConnieF – we haven’t been able to deduct mortgage interest since we never itemize our deductions. We have always taken the standard deduction so far since it results in the higher deduction. Our student loan interest is tax deductible regardless. Our mortgage also has the higher interest rate.
Commenting on Judy’s & Tricia post about paying off the mortgage.
I would not pay more money on the mortgage they you already are. You can take that money, save it (make a little in interest) and use that with your house as a down payment. I can’t see any good of paying down your mortgage early if you are going to move.
I still have some debt that I am diligently working on. However, I get distracted and discouraged. I am saving about 25% of my income and paying down debt and I am able to live pretty frugal, but I just get antsy for the day when I will be debt free totally. How do you keep yourself from not getting discouraged and distracted? 🙂 Thanks,
Congratulations! Eliminating debt is a truly liberating feeling. I thought it was interesting that you’ll still be living frugally. That’s a key component. I’ve been reading “The Millionaire Next Door” and have learned that one of the major keys to wealth is to consistently live BELOW your means. Keep up the good work!
Sorry to say, paying off the debt is just the first step in a long journey. That being said, it should get easier with time. Good Luck!
Tricia:
Please don’t stop blogging. I have been following your blog for about a month which is just enough time to see you “finish.” As you state you aren’t finished and there are many more mountains to climb and I want to hear about that process as I to try to create an emergency fund, pay off a mortgage, etc. etc. I think deciding which of these to do first is a really interesting question and I look forward to how hearing how you make these decisions.
Good for you Tricia!
One giant step in progress, a few more to go. It’s a project and you’ve got the first leg concurred!
Hang in there, you’re an inspiration to me as I battle my student loan debt.
Thank you for all that you have done. I look forward to reading your about your continuing financial journey.
Tricia, You are going to stop blogging? What? You can’t do that to me/us! Noooo!! 🙂
Hi Tricia,I just wanted to react to your blog,been following it for a while now.First of all ,congrats from Belgium!
My own story isn’t one of incredible debt but of frugality from an early age.I have been working sinds I was 15,spending money on the fun things in life,not on stuff.I am now 45,no debt,we payed off our mortgage 3 years ago.
I recently went back to school and have a parttime job and lots of time to enjoy life.IT CAN BE DONE.
Make sure your son knows the values of life .Not what you have is important,what you are is.
dominique
Just my two cents worth: move the retirement up to the top of the list. Speaking from the point of view of a soon-to-be-57 year old (and tired!) lady who wishes I had thought more about retirment when I was younger. Before you know it, the time will go by, and you can really beef up your retirement if you start early. Don’t wait! I know it seems like it’s a long way off, but trust me – it’s not!
What a great moving forward plan! I agree about not paying extra towards your mortgage. Have you had a professional appraisal on your home recently to know what its worth in today’s marketing if it goes up for sale in the next 4-6 months? Compare that to the balance on your home loan. If you have equity today, even a little bit put the cash towards in the down payment fund.In the end if you dont move you have that extra padding to go towards your $10k ER fund. Any thoughts for a college fund for the little guy?
I think I should clarify something about our mortgage. We purchased our home with no downpayment. Our monthly payments only resulted in about $25-40 going towards our principal each month. We have very little equity in our home.
I watch real estate prices in our area and for a while comparative homes were in the price range that we purchased our home in. Unfortunately, it is dropping. Not a lot, but enough to be concerned about a short sale situation.
Nancy – I will still be giving updates on here. I just won’t be blogging regularly 🙂
The mortgage makes the most sense to me too for extra attention. Right now you are paying a huge chunk of change in interest just for the “right” to give them some pennies toward the principal. Once you’ve paid for that “right” you might as well maximize it.
There is no good place to earn interest right now on savings. The rates are awful. If you are willing to risk falling back on the FDIC opening an account at some desperate bank that offers a slightly better rate you can get 2.7%. Payments made on the mortgage are a guaranteed x% (whatever the mortgage is at. Most likely 7% or more.
Pull up a mortgage calculator, like this one from bank rate and see how a little extra a month on the payments cuts years off the loan. For example a 120k 30 year mortgage will be done *13 years early* for a mere $200/month extra.
First, congratulations on both paying off your debt and establishing goals.
Second, congratulations on understanding the importance of patients in achieving your financial goals.
And you should keep up the blog. Even if you are no longer blogging away debt, that doesn’t mean you can’t be blogging your way to a cushy retirement.