What does life after debt look like?

Grubers at Disney World
The wife (Amy) and I on our honeymoon, July 2003 at Disney World.

A friend of mine recently challenged to think toward the future. He asked, “What do you envision for your life or your finances after paying off debt?”

That was an excellent question. It’s like asking, “What do your dreams look like?”

After debt, what likely comes first is a trip to Disney World. We are putting the family through a lot to hit this goal in one year, and the efforts should be rewarded with something fun.

Next we’ll make a nice, robust emergency fund. In Baby Step 1, the goal is to have $1,000 emergency fund for emergencies that come up while you’re paying off debt (or $500 if you make less than $20,000 per year). For some, that seems like a small amount. However, we have found that it covers most emergencies that come up, and the goal isn’t to stay there forever. In fact, the amount is small by design. It’s small so you get motivated (scared) to get out of debt, fast, and then build up a robust savings.

After debt is Baby Step 3, where we’ll save three to six months of expenses. I’m not sure where we’ll land — be it the three months or six months amount — but either is a far cry from where we’ve ever been. It will feel great to know we have a good amount of money waiting for when emergencies come.

Another thing we’ll be thinking about is replacing our kid hauler. My daily driver, although not at all attractive, is working fine for now. However, our 18-year-old van will need to be replaced. We’re having issues cramming all our stuff into the van when we travel, and more room is needed the bigger these kids get. Eventually, we will replace my car as well. However, we’re going to do this with a twist: we don’t want to have a car payment ever again. So, we’re going to take a different approach to getting newer vehicles. More on that later.

Beyond that, as my Magic 8-Ball says, “Cannot predict now.”

I really don’t know what our life might look like when we’re not shelling out tons of money toward debt every month. Will we get a new kitchen table to replace the old one we have? Probably not, because what we have works fine and the kids are still young enough to do plenty of damage. Will we purchase a bigger TV? Our is big enough and working fine, so I don’t think we will.

The funny thing about “stuff” is that you can get to a point where stuff isn’t a big deal anymore. My interest in minimalism has really subsided my thirst for more to the point there’s not many material things that make me happy. For my family, I value experiences over things, and safety over large impulse purchases. I think having a better safety net and the ability to do something fun on a whim for a weekend will be quite a lot to satisfy me.

For the moment, all the above is just a dream. But dreaming is an excellent place to start.

6 responses to “What does life after debt look like?

  1. Once debt free, in order to stay debt free, you must start aggressively saving for the kids college. Even at today’s rates, you are talking a minimum of about $10,000 per year per child just for tuition and fees. More if they want to be a Jayhawk. 😉 If they aren’t staying at home, you additionally have lodging and dining costs. It is a real ass kicker if you don’t plan ahead with a college fund.

      1. And they might be living with you indefinitely. I promised my kids two things, a pretty smile and all the education they want. One chose not to go to college, two have at least one bachelors and their masters, one is in his last semester of his masters, and the baby is working on her masters. No student loans outstanding. Four of the five own their own homes and have great jobs. It’s nice to have well educated, well adjusted, financially secure kids, and I am happy I was able to contribute to this. I guess we all define our obligations to our children in different ways. I felt I was obligated to help them be all that they could as long as they also made the effort.

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