I made my final car loan payment and I am DEBT FREE! I paid off my car loan 8.5 months early!
So now what? I’m going to go on a luxurious tropical vacation! Just kidding. I am going to continue on my journey to financial freedom and reach my new goals.
Here are my financial goals now that I am debt free:
I have always put 6% in my 401k because that is what is matched by my company. To me, it is free money and even though I had debt I wanted to make sure I saved for my retirement. Compound interest is an incredible thing and the earlier you start the better. I started my 401k four years ago and I have about $40,000 in there just from putting in the 6%. Not bad for 25 years old! I want to increase it to 7-8%. I do not want to increase it much higher because there are still things I need to save for and I will need the money within a few years.
There are a few different things I will be focusing on saving for now:
- Wedding: To learn more about why I am saving for my wedding check out my post Why I am Saving for My Wedding Before I’m Engaged. I have $8,500 saved and my goal is to have $25,000 (maybe $27,000) saved by my wedding. I still have about 2 ish years to save the money but I want to be better at setting money aside for it each month.
- House: I don’t plan on buying a house for at least 3-4 years but I need time to save for a down payment. Currently, I have $100 for my house fund so I want to try to set $50-$100 aside each month for that fund. My boyfriend has a house so we are planning to live there for a year when we get married to save money since his mortgage is pretty cheap. Then we will move into the area we want since that area isn’t the best (nicest way to put it).
- Future Debt: I know this sounds funny that I am saving for future debt. I have no plans to get into debt (I promise) but, I know when I do get married I will be marrying into a lot of debt. I am totally okay with that and I know what I am getting myself into. My long-term boyfriend has a lot of student loans and a car loan so I will go from debt-free to back into debt and that is okay. We will get out of debt together and then we will finally be debt free for good! Check out this post to learn more.
I tithed every month even while in debt but now that I am debt free I would like to give more. Not to the same organization every month but when I run into someone in need or I hear of an opportunity to give, I would love to be able to give freely.
I know how lucky I am to be 25 and debt free (for now). Here are a few of my top money tips:
1. Don’t Compare Yourself to Others:
You can use other people for motivation and for help but do not compare your situation to theirs. Everyone is on their own journey and most people post the positives on social media. I might be posting how I am debt free now but I 100% could have been debt free sooner. I could have chosen not to go on a trip to Australia or paid for NCAA tournament tickets. I could have chosen to not splurge on memories but I did. Use social media to learn helpful tips and to motivate you but sometimes take a break. Focus on your own journey.
2. Use Your Credit Cards Wisely:
Credit cards are not cash (obviously) but they can be used responsibly. I have never had credit card debt and I use credit cards for pretty much everything but I have never ever treated credit cards as cash. I have never come close to my credit card limit and I have only ever had 3 credit cards (only recently did I get my third). I am not saying this to judge anyone, just saying it to let you know my journey and my experience with credit cards. Currently, I have 3 cards: a travel rewards card (capital one venture card), a cash back card (Bank of America cash back), and my original credit card from college (Citi bank). I only charge what is in my budget. I track my expenses daily and that has helped a lot. Could I save a little bit more by using only cash? Probably. For me, it is much easier to carry a credit card. I also get gift cards, cash back, and free flights/hotel nights so it is worth it. If it is a self-control issue then use cash. I am not against using cash, I have just found what works for me. Credit cards might not work for you where you are in your journey but one day you might be able to use them to your advantage.
3. Start Saving for Retirement ASAP:
I know some people think you should wait until you are debt free to save for retirement but if your employer offers retirement matching I personally do not think you should leave that money on the table. It is free money that you could have and like I said earlier compound interest is a wonderful thing. I know so many people who are nearing retirement age and are unsure if they are able to be financially comfortable when they retire. The earlier you can start the better even if it is $20-$50/month.
4. Be Honest:
It is important to remember you are not alone. Whether you lean on your spouse, friend, or someone on social media you need to be honest about your situation. You need someone in your corner so find someone. If you don’t have someone email me! I will be there for you. Once you verbalize (or write down) your financial goals and tell someone it helps you stay on track. I told you my goals in this post so that I can be held accountable for my financial goals now that I am debt free.
5. Track Your Expenses:
I track my expenses every day in an excel file. You don’t need to be crazy like me but even track what you spend for one month to see if you spend more than you think. Whenever I complete my monthly budget, I complete my expected daily budget. My daily budget consists of when bills are paid, expected grocery trips, when I expect to eat out, and any other expenses I know will come that month (birthday parties, vacations, gifts, etc.). Then each day I edit the file and add/subtract depending on what I actually spent. This way I can adjust my budget if needed (if I spent more than I thought). If you need more explanation or want to see my excel file just let me know.
I am super excited to continue my journey, so stay tuned! I will be posting updates. I am now obsessed with checking my net worth. I do so for free through Personal Capital. I wish I started tracking it when I was in debt. I think it would’ve motivated me even more. You can create an account for free. I highly recommend checking it out (it’s quite addicting).
What are your financial goals for when your debt free? When is your debt free date?
For more money tips, resources, and ways to make money, make sure to check out my recommendations page.