Post-Debt Spending: How to Do it Right

I’ve been debt free for almost nine months now. It’s a glorious place to be. No student loan payments hang over my head. I’m much more financially secure. I’ve stepped up my savings rate substantially. All these things are the direct result of paying off my debt.

Navigating the world of post-debt spending has been trickier than I thought it would be. While yes, I have been able to save more and make progress towards my ultimate dream of financial freedom, I have also definitely spent more on non-essentials than I did when I was paying off debt.

There’s a delicate balance to post-debt spending. Here’s what I’ve learned.

I was truly hardcore about my debt payoff strategy. I squeezed every last dollar I could out of my budget and sent it all towards debt. Money was spent on the bare essentials and debt. Nothing else.

It was an effective method. I paid off $13,000 in five months, in a year where I would gross $32,000. I paid off $25,302 total in loans in three and a half years.

But it was no way to live long term. I’ve spoken a lot about that, and as this year progresses, I’m trying to put my money where my mouth is.

Many people’s post debt spending goes straight to the other end of the spectrum. They stop tracking their money and end up spending more mindlessly. Maybe they don’t go back into debt, but they start to flounder on their goals. They become directionless without that dream of being debt free.

My post-debt spending is still in line with my dream to reach FIRE. It is also much more in line with my desire to live well now. I can’t keep sacrificing my present for my future. I have to build a god life for myself right now, and sometimes that does require spending money. And in this blogger’s humble opinion, that balance is the key.

Here is my guideline for post-debt spending:

Set a New Goal: Getting out of debt was your first goal. And whoo-hoo, you accomplished it! Now it’s time for a new one. It can be anything you want; it doesn’t have to be financial freedom like mine is. Just set a goal. That gives you a direction to move in and something to make your money build towards.

Continue to Practice Your Healthy Habits: A guaranteed way to save money is to eat most of your meals in. This also happens to be a guaranteed way to get healthier. You can control your spending while controlling the amounts of sugar, fat and oil you consume.

Being debt free is not a license to lose those good and healthy habits you’ve already established. Continue practicing the ones that bring health and joy to your life. Things like: walking to save money on gas, eating at home or not spending money at bars are all habits you reap financial and healthy rewards from. Keep them up!

Know When to Treat Yoself: Debt payoff is a time of sacrifice. Depending on your debt type and amount, you can go a long time giving up things you love. Rather than bounce to the other end of the spectrum when you become debt free, incorporate ways to treat yoself while staying on track.

One of my favorite ways to treat myself is a small fro-yo at the best yogurt place in town. It’s walking distance from my house and even heaped with toppings, usually only costs about $6. I loooooove fro-yo and this place has rotating flavors AND a rewards card. I feel good about walking over there, it’s a small treat, and it’s something that brings me joy.

Small ways to treat yoself end up going a long way. You can still indulge in large treats as well, but do so mindfully. Know what you’re working towards and why it will bring joy to your life.

Ask Before You Buy: I always check in with myself before I make a purchase. The two questions I ask myself are these:

What am I buying this for?

Is there anything I have now that will do the job?

Whether it’s new clothes or a plane ticket, I always examine why I’m buying something. It stops me from buying useless things and forces me to do a mental run down of the many things I already own. I have also found that with a little creativity, I don’t actually need to buy things. I can mostly use things I already own in a new way.

Post-debt spending can be a huge adjustment to make. Even nine months later, I’m still finding my footing with it. How do you handle the spending challenges of being debt free?

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