On May 27, my wife and I finally paid off our student loans! After about 4 years of crazy hard work, extra jobs, limited spending, we are free of student loan debt! It’s actually kind of a weird feeling. In a couple days we will finalize our monthly budget, and we don’t have a specific place for the extra money to go (at least not yet).
Before, it was always about our student loans, so at the end of the month we made an extra lump sum payment to knock down our debt. But now, the world is our oyster! We can do anything we want with this extra money! That’s why we have to be careful, especially right now, not to be tempted to spend money irresponsibly.
Here is How We Are Handling Debt Freedom So Far
Step one of debt freedom was to scream and dance around our kitchen. In case you’re wondering, our happy dance was in full force and on point. Our dog even got pretty excited and started running around the house and jumped up on us. Next we went to Caribou for a celebratory coffee (with a BOGO 50% of course) and bought a nice bottle of red wine.
That’s it so far, oh, and we have been grinning ear to ear pretty much nonstop. It’s really small and simple, but that’s how we’re used to celebrating. Our plan is to have a bigger celebration with friends in a few weeks, but like any big expense, we need time to figure out how it fits into the budget and how much we actually want to spend.
The Temptation is Real
In the first couple days of debt freedom, we are already feeling the temptation to spend money impulsively and more extravagantly than we normally do. We can buy more food, (I know exciting right), update our falling apart shoes, get new summer clothes, try a few new restaurants, and treat ourselves.
We joke around saying, “Sure, we can buy that! We’re debt free!” While this is absolutely true, it is a dangerous trap to fall into. If we buy whatever we want and give into every impulse, it could severely mess up the disciplined spending habits we created over the last four years. It’s a slippery slope and a dangerous path into more debt.
Making a Plan to Beat Temptation
To avoid giving into all sorts of temptations, we decided to make a plan with our extra money. Priority number one: We are absolutely going to treat ourselves for paying off our debt! Once we have that taken care of, we need to re-allocate our budget so that every dollar is accounted for and has a home. We have a bunch of options, like savings, investing more, paying off our house, and having more fun money. As of right now though, we have no real idea of what we are going to do, but it’s on our to do list and I’ll share more once we figure it out.
Wrapping it Up
Our student loans are gone, and now we have to start pursuing our new financial goals. Wish us luck!
Let Me Know in the Comments
What are your biggest money temptations?