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What’s Next For Us Now That We’re Debt Free?

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In October 2017, I shared with you guys that we are officially debt free! We finished paying off $87,000 of student loans in 2.5 years, and could not be more relieved. But now it’s been 2 months of living a debt free life, and we’re starting to plan for what’s next.

By being debt free, we really are embarking on a new chapter of life. And we couldn’t be more excited for what’s ahead. Just because we’re debt free doesn’t mean that we have thrown the budget aside. The budget is still in full use as we plan to accomplish our next goals!

Moving Out

If you’ve been following along with my blog, then you probably know my story. Basically, we spent the first 2.5 years of our marriage tackling $87,000 of combined student loan debt. When we were first married, we lived on our own in an apartment. But after renting for a year, we moved in with my parents to attack our debt even more. We rented from them for a lesser cost for about 14 months, and it was while we lived with them when we paid off our debt!

Living with my parents was a serious game-changer for our finances, but we knew we weren’t going to be there long term. We really wanted to have our own place again!

In November, we ended up finding a perfect apartment in a great area for an AMAZING deal. Supposedly, people don’t like to move in the middle of November, and since we were, we scored on our apartment. It’s a two-bedroom, two-bath unit and it’s so much nicer than we initially thought we could afford.

So we’ve been in our new apartment for a month now! It’s been so fun to decorate our own place again and be on our own in our home. Our apartment has been a huge blessing for sure! And so nice to have now that we’re debt free!

Saving For An Emergency Fund

Now that we’re debt free and living in our apartment, we’re working on our next big financial goal, which is saving for a full emergency fund! We always kept $3,000 in an emergency fund even when we were in debt because emergencies still come up for people paying off loans (unfortunately).

But now that we’re debt free, we want to build it to be a full emergency fund of about 3-6 months of expenses. This will help us feel secure no matter what happens!

So in our budget, rather than putting every extra dime to loans, we get to put all income after necessary expenses straight to our savings! It’s amazing to now watch our savings account increase rather than watch a loan balance decrease. It’s so rewarding.

Saving For A House

Next on our savings list is a house! We love our apartment but are excited to own a home someday. When we have a family, our desire is to have a house that our family can grow in.

So after we tackle our full emergency fund, we will be saving for a down payment on a house. I’ve learned that being a home-owner is expensive. There’s more to the cost of a house than just a monthly mortgage. You have many other expenses that go into home ownership. And sometimes things go wrong, like needing to replace some appliances or a roof.

We want to ensure that we would be covered in case of a house emergency. Which is why we plan to have a full emergency fund BEFORE we buy a house.

Many people think we’re strange for not buying a house now that we’re debt free. But we are all for being patient to save and be secure in our finances before we make the biggest financial purchase of our lives.

Saving For Retirement

For those of you who follow Dave Ramsey, you know that he says not to save for retirement until you’ve paid off all debt, saved for an emergency fund and bought your house. But we haven’t been delaying our retirement saving.

Even when we were in debt, we were saving for our retirement through our employer with up to whatever match they would provide. We didn’t want to miss out on free money, and we’re young so it has lots of time to grow and multiply.

Once we became debt free, we both upped our retirement contribution. Again, now is the best time for us to be saving. We are 23 and 26 and don’t have kids yet. So our budget doesn’t require a lot of needs and we have a lot of time for our investment to grow. We’ve both been putting 8% of our income into retirement before our employer match. We would like to up that to 15% once we buy our house.

Vacation

Now that we’re debt free, we have increased line items in our budget that are a little more fun. Like going on vacation! We’ve officially planned a trip to Hawaii together in summer 2018. This will be our first trip by ourselves since our honeymoon about 3 years earlier.

When you’re debt free, you get to say yes to more fun opportunities, like going on vacation! We’re so excited to start traveling more now that we’re debt free!

Babies?

I’m not going to lie you guys, we’re ready for babies! Jacob is 26 and I’m 23. And we want to be able to be younger parents so we can have lots of energy to keep up with our little ones! We are so excited to have babies and want that to be soon, but I’m not quite sure when that will be…

Babies are expensive. Sure, baby care (diapers, food, etc..) isn’t that bad. But childcare is what’s so expensive. When you have a baby, most of the time you either have to have both parents work so you take on the cost of childcare, or one parent stays home so there’s a loss of income. Either way, you decrease your income or increase your expenses.

I’m not yet sure what I will do for work/staying home when we have kids. But I can tell you that our budget is not yet ready for babies.

We are in the middle of trying to save for an emergency fund, and house. And both of our cars are about 20 years old so we’re going to need new ones soon… All that to say, we have A LOT of expenses coming up.

We don’t want money to be the reason why we don’t have kids, but we also want to be financially responsible before we are in charge of another human being!

Wow. I feel like the baby topic could be an entire post of its own! But for now, the short story is, we wish it was sooner but know it will have to be later. So mom and dad, if you’re reading this, it you’ll have to wait a bit longer to be grandparents…

We’re Still Budgeting For What’s Next

At the end of the day, I really want you all to know that we’re still on a budget! Just because our debt-free journey has ended doesn’t mean that we’ve slacked off on budgeting. We will ALWAYS be on a budget: Assigning every dollar a name at the beginning of the month and tracking our expenses as the month goes on.

Whatever may be next for us (whether that be saving, investing, traveling, growing our family…) we will continue to spend our money wisely and strive to be good stewards with our finances. A budget will always be part of our next financial journey!

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6 comments

  • Chris W Werner

    December 25, 2017 at 2:24 pm

    Marissa- I love your blog! I really love how honest and open you are in reporting your income from it AND showing everyone exactly the steps on how you did it. Makes me want to monetize mine… Anyways, I know you have been blogging for a while, but I nominated your blog for the Liebster Award, which is an award designed to give new bloggers a little recognition. I hope you don’t mind… 🙂

    Thanks for writing!
    C.W.
    https://www.chriswwerner.com/2017/12/2017-liebster-award-nominee/

    1. Marissa

      December 25, 2017 at 7:51 pm

      Thanks so much, Chris! I appreciate it.

  • Don

    December 25, 2017 at 6:42 pm

    Realize that you are never truely debt free. What I mean is, you finance everything that you buy whether you realize it or not. When you call yourself debt free, what that really means is you are financing yourself. Financing yourself has a name. It is called opportunity cost. When you buy that shiney new ______ you take money out of savings to buy it. Now, that money is unavailable for doing something else. If you are honest with yourself you must pay yourself the opportunity cost plus the principle to replenish your savings. You are now your own banker!
    For example, you buy a nice used car for twenty thousand dollars. How much interest would you have paid to the bank had you financed that vehicle? That amount plus your principle is what you should pay back into your savings account. Why on earth would you pay someone else interest, and not your self? You are a business and
    a business needs to make a profit. Paying yourself the opportunity cost accounts for that profit!

  • Mr Shirts

    December 27, 2017 at 6:44 pm

    Marissa – Great work on your blog! I love the outline of advice and you’re well on your way to financial freedom!

    I once read the best advice is from someone ten years older in a postition you want to be in…Here’s some random advice from a couple half a generation ahead:

    – Don’t wait on those babies if you know you want them. Biology hasn’t been our friend there by waiting until 34.

    – Consider saving up to $100,000 in just a regular old taxable brokerage account. Vanguard’s VTSAX Fund is probably the easiest. It’s an all in one solution, emergency fund, down payment, changing job fund, move cross country fund, tell a horrible boss to go away fund. I can’t begin to describe how much less financial stress there is when we got that. Wwwaayyy more than hitting $1mil in the Bank, paying off six figures in loans, maxing 401ks, travel hacking.

    – Really, really, really consider a rentable property for your first house. Is there anything around that comes close to renting for 1% of the price. We kick ourselves for not picking up 1-2 units when we could. We had too much appreciation tax free in our first one to keep it, but then failed to pickup property when we could. The numbers may not work in Oregon, but consider it.

    – Keep up the good work on this side hustle, figure out what content you can make that will annuitize forever (ebook, YouTube, etc?). It’s unbelievable the opportunities in digital

    Best wishes in 2018!

  • Kim

    January 6, 2018 at 8:12 pm

    This is inspirational and I can’t wait to hear your updates for this year.

    1. Marissa

      January 6, 2018 at 8:17 pm

      Thanks so much, Kim!

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