What to do after debt

Only $1,000 Left Until I Pay Off My Student Loans … Then What?!

I woke up this morning, checked my Mint.com balances, and saw THIS:

Screen Shot 2013-08-20 at 9.36.00 AM



Pardon my French but HOLY SH*T.

Naturally, I started doing this:

happy dance

Why is this such the big deal?

Well, when I first graduated from school four years ago, I had over $30,000 in student loans. Even this time last year I had over $15,000 in student loans. That means I’ve paid off almost $15,000 in debt in one year.

Now I have only two more payments until I’m utterly and completely debt free.


Becoming debt free didn’t feel like it could be a reality until this morning. I know I’d made a commitment to crush this debt once and for all and become completely debt free by the end of the year, but I don’t think it hit me until just now that I’m actually going to get there. And soon.

Yeah. I’m a little giddy 🙂

So… What Do I Do With My Money After I’m Debt Free?

That’s the question I’m asking myself now… what’s next? Paying off my debt has been a laser-focused priority of mine for four years. And soon (thankfully) that priority is going to disappear.

This is exactly how I felt after my 200 mile bike ride: I was super excited about accomplishing my goal, but I had no idea what I was going to do next! After I’ve wiped out this debt, I’ll be freeing up almost $1,000 a month. There’s so much I could do with that money… I just haven’t decided what I’ll do yet!

I think I have some ideas of where I want my money to go in my post-debt life. But I’m curious what you would do if you were me.

What do you think I should do? What would you do with your money if you didn’t have to make any more debt payments?

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14 thoughts on “Only $1,000 Left Until I Pay Off My Student Loans … Then What?!

  1. Sarah

    Right after it’s paid off, I would say you deserve to treat yourself at least once – whether it’s taking a vacation, going out to a fancy restaurant, whatever! This is a huge accomplishment so there’s nothing wrong with a little celebration!

    After that, I would definitely up your retirement contributions and start saving for the down payment on a house.

    (By the way, I’m super jealous. We still have about $45K in student loans left to go…)

    1. Stephanie Halligan Post author

      Totally. I’ve already got a vacation in mind! I know $45,000 seems like a crap load of debt right now, but I was able to pay off $32,000 in just four years. It’s totally possible if you commit to it 🙂

      1. Sarah

        Yeah, my husband and I started with about $75K in debt between student loans, an auto loan, and a credit card… so the good news is that we’re down roughly $30K in three years. I’m just really tired of throwing every extra penny at loan payments. Feels like debt burn-out, if that’s a thing.

        My goal is to be debt-free by the time we’re 30 but it’s probably not realistic. (We’ll both be 28 in January.)

  2. Money Beagle

    Regardless of what you do, keep this in mind as you decide: Right now, your payments are going almost 100% to increasing your net worth. Your net worth is your assets minus your debts. As you reduce your debt, your net worth goes up. If your next step does not either increase your assets or further reduce your debt, then you will actually be taking a step back. Many people are tempted to spend the money, but they don’t see the bigger picture that it can actually slow down your ability to build your net worth. Just don’t fall into that trap, and you should be fine.

  3. Sven

    Just paid mine off. We laser-focused the last two years and paid off over $60k during this time frame. It’s amazing what you can do, if you’re focused.

    For now, we’ll be freeing up a lot of money each month. Most will go to savings and investments. I won’t enhance my lifestyle, because after this, I learned the value of the almighty dollar.

  4. Jake

    Stephanie, reading this thread I’m sure I can safely assume the last little bit of your loans are paid in full. How have the last few months been with out that payment?

    My self, I have 6 months left from a 3.5 year, 35k student loan planned assault of my student loan debt. My gut says go for a house, my brain says go for 401k max contributions. And society says divert those excess monthly dollars to shiny new cars/clothes/electronics etc…

    Assets and liabilities and knowing the difference is something I didn’t learn from my parents, and I am still struggling with it today.

    So I ask you, what have you been doing with the extra income not going toward your loans?

    1. Stephanie Halligan Post author

      Hey Jake! Yes, they’re all paid off. And it feels pretty damn awesome 🙂 I actually used the opportunity to quit my job and work for myself. Without a massive monthly payment holding me back, I got the confidence to take a major risk. You can read a little bit more about it here: https://empowereddollar.com/start-a-conversation/quit-my-job/ In the meantime, I’m maxing out my Roth IRA and starting to experiment with investing (which I haven’t done before outside of retirement!)

  5. charlotte

    Just reading all this because I want to know how others feel when they are finally free of their debts. Next month I make my last payment on my £9000 ($14500). I have thrown most of 14 months worth of salary over a seventeen month period at this debt. I can’t believe I am nearly there. It was easy at first because I got paid on a weekly basis and every 7 day I would see my debt go down a little more. Then I changed jobs and now get paid on a monthly basis……..like walking through mud waiting for each drop in my debt amount. I was rewarded a couple days ago though with a tax rebate! Not a huge amount but enough to bring my final payment forward by a month. That’s why I am so excited. I thought I was going to have to wait another two months.
    As for treating myself to something. Well, I have gone through many changes as I have paid off this debt..and before I started. I actually find it difficult to spend money now. I am completely minimalist. My treat will be being debt free and maybe for a day or so….gloating about it! Being debt free is rare but healthy.
    I gave up accommodation to pay off my debts. I am an outdoorsy person anyway so I thought I would try my chances at sleeping outdoors (showering and eating at work). I have done that since last June (nonwithstanding a couple months staying with a friend over winter). I guess you could say I went to the extreme to get my debts paids but I was so over this debt I wanted them gone asap. I reduced my phone payments to the minimum and my only other outgoing is a gym membership…..cheap because I work on a uni campus. I work for a catering company so I get a daily food allowance.
    I have friends who I house/cat/dog sit for every now and then so I do get a bed on occasion. I have one months worth of housesitting coming up after xmas.
    If you want to get yourself free of debt, I wouldn’t say you have to go the extreme that I went to but the more you get rid of all those extras….sky, mobile internet, etc, the easier it becomes to let go of even more stuff and think about the facilities that are already out there like libraries, etc. Life has become richer.
    What am I going to do with the extra money I have every month. I want to do my masters and I would like to build my own tiny home….see Jay Shafer on youtube…..but that’s a whole other story.
    For those of you just starting out on your journey to a debt free life….hang in there. It’s so worth it at the end.
    Right, I’m off to gloat!

  6. Corritta

    I paid off my debt as a lump sum last week and all though it was a lot of money $55,000 paid off in 3 years ins’t bad. I did not want to spend the next 25 years paying off debt. I can now move on and enjoy my life at 36 I am out from under my student loans. I will be using the money I was paying to contribute to my Roth, home down payment, 401k, and savings. It feels amazing to not have to worry about this debt any longer. I can finally breathe.


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