Yes you read that right – we are now officially debt free for the first time in our lives!*
*Exception: six-figure mortgage debt, but let’s not allow this to dampen our spirits, k?
You may recall that when I started this blog in October of 2018, we owed about $24,000 outside of our mortgage debt. We started using YNAB at the same time which helped us to feed every spare dollar to debt (well, not EVERY dollar, but a fair number of dollars).
The plan was to pay it all by June 2020. Well guess what?! We finished the last payment this month! Woohooo!
I’m unnaturally excited to do the budget next month and not have to account for any debt repayments. What will we do with all this extra cash?!
I know, spend it on a trip to France! And also, increase our savings rate considerably.
Have I lost my mind?
I know that doesn’t sound very FI-oriented, but hear me out. We have this very unique opportunity to visit France for a couple of weeks this summer, and our accommodations will be FREE. Which means we only pay for our flights and entertainment/some food while we are there. This is just not something a travel-loving family can pass up! It means our travel budget will need to be a bit bigger than last year (we spent about 4k in 2019), but with no debt repayments we should be able to funnel more into the travel sinking fund, AND dramatically increase our savings rate (more towards the end of the year once France is paid for).
It’s certainly possible that I have lost my mind, however travel is always one area I’ve been reluctant to limit in any way in order to reach FI a bit sooner. I think it’s important for my kiddo to see and do things at a young age to better understand the world, even a little. And, we will be seeing family while there, which is also very worthwhile. Maybe we can think of it as a present to ourselves for paying off debt (of course, without incurring more debt – this trip will be fully funded).
Although we COULD have paid it off faster, and we COULD get to FI/RE faster, I feel like we’ve done a lot over the past year to really focus on this, so I’m quite happy about our progress.
The fact is, my family is not ready for hard-core frugality, and I’m dealing with that as best I can, while continuing to make small incremental changes to reduce expenses, increase savings, and increase income.
FI/RE – When can I get there?
After doing multiple online FI calculators with various inputs / scenarios, it’s clear that it will be quite difficult for me to retire before 60 with the current progress we are making. That said, I’m going to continue to work at this over the next year to shoot for T on FIRE’s Freedom 55. I MAY be able to “barista FIRE” by then by working a reduced schedule after 55, however for now, I’m just going to continue making improvements to try to make 55 my true “FIRE” goal.
MORAL OF THE STORY TO THE YOUNGINs: Start early. FI often.
How are you doing on your journey to Financial Independence? Do you have lingering debt that needs to be paid, or have you paid it all off? If so, how did life change afterwards? Please add your comments below!