Author Topic: Just paid off student loans and feel... no different  (Read 2997 times)

JJsfr

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Just paid off student loans and feel... no different
« on: November 19, 2017, 02:26:22 PM »
I just decided to pay off my student loans at a 13k balance and I strangely feel absolutely no different. They were at 4 % and we are in the 25% bracket, so I had no problem keeping them at such a low rate.

I am in such a different mental place than I was ~5 years ago when I discovered this site and couldn't stand the thought of the loans. It's weird reaching the saturation point of money information that so many talk about, and at 30 with a ~$330k NW, we'll never "really" have to worry about money. Sure, it'd be nice to own a house some day, but that too will come and, hopefully from the financial perspective, be just as dull as paying off those loans that started at -$78k 5 years ago.

It's crazy how quickly lifestyle changes can turn things around. I remember starting this journey 6 years ago with a negative net worth. We did everything discussed here, mostly don't spend money on stupid stuff, we have saved more money than I could have hoped for.

I originally started this post with the intent to ask the question if it was normal to be "meh" about financial milestones as that's how I've been feeling since paying the loans off(my wife is ecstatic!!), but I'm pretty sure it is normal to feel this way. I guess now this post is a big thanks to this community for providing constant solid information to help me set a solid foundation and now focus on what matters: life.

boarder42

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Re: Just paid off student loans and feel... no different
« Reply #1 on: November 20, 2017, 04:21:02 AM »
For me paying off low interest debt is worse than meh. It actually feels bad bc I'm wasting my little green soldiers that could be doing more work for me invested.  When you buy a house if rates are anything like today keep the mortgage for 30 years.

Lmoot

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Re: Just paid off student loans and feel... no different
« Reply #2 on: November 20, 2017, 04:39:25 AM »
Perhaps it's because it may not make a big impact to your cash flow. After prepaying my mortgage by $15k, I stopped when I thought about it and realized the PI didn't even account for a large part of my monthly budget, and getting an extra $350 back into my cash flow wasn't exactly life-changing, or worth missing out on being able to invest in other properties.

APBioSpartan

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Re: Just paid off student loans and feel... no different
« Reply #3 on: November 20, 2017, 05:47:01 AM »
I just paid off my student loans last week and it felt amazing!  I was smiling ear to ear for at least 24 hours.

However, my circumstances are a little bit different.  I'm only 26, have a MUCH lower NW, and I had started with $63,000 in loans.  I used to check my balance every.single.day. and stress about it, regardless of the balance.  Really glad that I don't have to do that anymore.....  Heck... I still log in to my account even to this day, even though I have a 0 balance.  Want to make sure that it stays that way apparently ;)

As for your celebration, it may just not be a huge impact to your cash flow as someone else has mentioned.  However, I would look at it more from the front that you eliminated a source of debt, regardless of how small.  WooHoo! 
« Last Edit: November 20, 2017, 05:51:00 AM by APBioSpartan »

boarder42

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Re: Just paid off student loans and feel... no different
« Reply #4 on: November 20, 2017, 06:04:04 AM »
I just paid off my student loans last week and it felt amazing!  I was smiling ear to ear for at least 24 hours.

However, my circumstances are a little bit different.  I'm only 26, have a MUCH lower NW, and I had started with $63,000 in loans.  I used to check my balance every.single.day. and stress about it, regardless of the balance.  Really glad that I don't have to do that anymore.....  Heck... I still log in to my account even to this day, even though I have a 0 balance.  Want to make sure that it stays that way apparently ;)

As for your celebration, it may just not be a huge impact to your cash flow as someone else has mentioned.  However, I would look at it more from the front that you eliminated a source of debt, regardless of how small.  WooHoo!

Just eliminating a debt is not cause for celebration unless it was understood that it was financially beneficial to pay it off.  Debt is not a bad thing to carry when its at a low fixed interest rate and you invest the difference. 

APBioSpartan

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Re: Just paid off student loans and feel... no different
« Reply #5 on: November 20, 2017, 06:59:54 AM »
I just paid off my student loans last week and it felt amazing!  I was smiling ear to ear for at least 24 hours.

However, my circumstances are a little bit different.  I'm only 26, have a MUCH lower NW, and I had started with $63,000 in loans.  I used to check my balance every.single.day. and stress about it, regardless of the balance.  Really glad that I don't have to do that anymore.....  Heck... I still log in to my account even to this day, even though I have a 0 balance.  Want to make sure that it stays that way apparently ;)

As for your celebration, it may just not be a huge impact to your cash flow as someone else has mentioned.  However, I would look at it more from the front that you eliminated a source of debt, regardless of how small.  WooHoo!

Just eliminating a debt is not cause for celebration unless it was understood that it was financially beneficial to pay it off.  Debt is not a bad thing to carry when its at a low fixed interest rate and you invest the difference.

I both agree and disagree with this.  Yes, my student loan interest rate was 4.75%.  Yes, I probably could have done better in the stock market.  However, student debt was a huge stressor in my life for some irrational reason and the mental clarity that I get from not having it is priceless.  To each their own :)

JJsfr

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Re: Just paid off student loans and feel... no different
« Reply #6 on: November 20, 2017, 07:14:47 AM »
Yeah, I remember when I "paid them off" after instead investing their balance 2 years ago. I wanted to keep them as long as I could because of the interest rate.

We did decide to pay them off for cash flow reasons as DW will be staying home without pay for a few months (hello newborn), and we wanted to keep that monthly impact low, though I make more than enough to cover our monthly expenses.

The cash came out of the down payment savings account, not out of the market. It won't affect our time to buy. It's not enough to get us to the magic 20% number this time next year, and we'll have at least 10% by then. So I do take some small consolation that it at least came out of a 1% savings account, couple by the fact my wife has been grinning ear to ear for a week (thanks APBioSpartan).

acroy

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Re: Just paid off student loans and feel... no different
« Reply #7 on: November 20, 2017, 07:32:03 AM »
big thanks to this community for providing constant solid information to help me set a solid foundation and now focus on what matters: life.
Bingo
previously, your life was worry about debt/money
Now you have no debt, you have money, no monetary worry any more. Get on with Life! Freeedommm! Great stuff :)

Dicey

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Re: Just paid off student loans and feel... no different
« Reply #8 on: November 20, 2017, 08:06:34 AM »
I just paid off my student loans last week and it felt amazing!  I was smiling ear to ear for at least 24 hours.

However, my circumstances are a little bit different.  I'm only 26, have a MUCH lower NW, and I had started with $63,000 in loans.  I used to check my balance every.single.day. and stress about it, regardless of the balance.  Really glad that I don't have to do that anymore.....  Heck... I still log in to my account even to this day, even though I have a 0 balance.  Want to make sure that it stays that way apparently ;)

As for your celebration, it may just not be a huge impact to your cash flow as someone else has mentioned.  However, I would look at it more from the front that you eliminated a source of debt, regardless of how small.  WooHoo!

Just eliminating a debt is not cause for celebration unless it was understood that it was financially beneficial to pay it off.  Debt is not a bad thing to carry when its at a low fixed interest rate and you invest the difference.

I both agree and disagree with this.  Yes, my student loan interest rate was 4.75%.  Yes, I probably could have done better in the stock market.  However, student debt was a huge stressor in my life for some irrational reason and the mental clarity that I get from not having it is priceless.  To each their own :)
There are some around these parts who are actually FIRE with mortgages and student loans. Hard to believe, but true.

To OP: I congratulate you on your success! Saving as much as you have, while paying down the SL's is what's really going to make a long term difference in your life. $330k by 30 is impressive!

I do worry when people who are digging their way out of debt believe that the payoff is going to make their lives all rainbows and unicorns. Nope. It just removes one source of stress. Life's always there, waiting to find a way to add another. Taking a stoic approach helps keep you on an even keel, whatever life hands you.

Travis

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Re: Just paid off student loans and feel... no different
« Reply #9 on: November 21, 2017, 09:04:21 AM »
big thanks to this community for providing constant solid information to help me set a solid foundation and now focus on what matters: life.
Bingo
previously, your life was worry about debt/money
Now you have no debt, you have money, no monetary worry any more. Get on with Life! Freeedommm! Great stuff :)

And this is why you're feeling "meh."  If you paid off the balance several years ago you'd feel a much bigger sense of accomplishment and euphoria because they were a dark cloud over your head.  You're in a much safer financial position so the loans relative to your net worth aren't as big of a deal.  You might feel a little differently if in a couple months you realize you have a little more cash to invest each month and a smile or two comes your way from that thought.

undercover

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Re: Just paid off student loans and feel... no different
« Reply #10 on: November 21, 2017, 09:22:54 AM »
Yep, that ^

You don't feel any accomplishment because the accomplishment already happened in the form of accumulating several times the balance. You probably noticed it happen but it's not an "event" like actually making your last payment.

It would feel like an accomplishment if paying off the loan was consequential to your overall finances. In this case, it wasn't, thus your indifference.

JJsfr

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Re: Just paid off student loans and feel... no different
« Reply #11 on: November 21, 2017, 12:20:16 PM »
Valid points, undercover and Travis. I think you're on to it, as well as a difference in risk/debt tolerance/preference. What does make me smile is knowing how happy it makes my wife :)

COEE

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Re: Just paid off student loans and feel... no different
« Reply #12 on: November 24, 2017, 11:31:01 AM »
I remember paying off my student loans and I was a bit 'meh' about it as well.  I was happy, but not as thrilled as I thought I'd be.  I was thrilled with the additional monthly cash flow, but the additional cash flow was not real to me yet.  You'll discover that it is real in the coming months.  Since we paid off our student loans we had the courage to move to take a new job that had more opportunity but similar pay.  The job has opened a lot of doors in other ways.  We probably wouldn't have taken the leap if we had to pay $700 in loans each month.  Having those payments gone gives you more options.

As you point out, life starts once you get out from those student loans.  Congrats! 

I will say that I am not as excited about paying off my house early either.  I have an interest rate under 3% on a 15 year note.  I'll get it paid off pretty aggressively without making extra payments.  I'm paying very little interest and taxes and insurance will still be there once I get it paid off.  I'll still probably pay it off early so that I'm not concerned about that expense in FIRE - I'm just not excited about doing it I guess.

JJsfr

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Re: Just paid off student loans and feel... no different
« Reply #13 on: November 25, 2017, 06:48:57 AM »
.
 We probably wouldn't have taken the leap if we had to pay $700 in loans each month.  Having those payments gone gives you more options.

I know that feeling well, except mine was approximately $1100/mo in debt payments at the beginning. I really felt like I couldn't jump around at all. It's so nice being on the other end now.

WhiteTrashCash

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Re: Just paid off student loans and feel... no different
« Reply #14 on: November 25, 2017, 06:52:27 AM »
Congratulations on your success. Personally, I can't wait to get rid of my student loans and they feel like the Sword of Damocles hanging over my head, even though they really aren't as big of a problem as I imagine them to be. I think it will help me feel better just to know that the debt is gone, because I've come to see debt as a form of slavery. It causes me some stress.