100% debt free

[rjbf65]

Sent off the final student loan payment from my wife's schooling yesterday.  Would have done it a while ago but we were able to participate in a $5K loan forgiveness program as she is a teacher but we had to wait for that to process.  We paid off our house a year ago.  No vehicle debt, Pay off credit cards every month.

Her parents agreed long ago that they would pay for her schooling.  They since divorced and her mother fell on some really hard times recently.  So my wife and I agreed to start paying the normal payment and told her mother to not worry about it anymore.  My wife's father wanted to keep paying his part.  Once the loan forgiveness finally processed I called him up and asked if he would be interested in paying off the balance with us in a lump sum.  Sum that was left was ~$8K and he was ecstatic to give us a check for $4K to get rid of this debt forever.  Our NW will take a nice jump the month.  The $5K forgiveness combined with his $4K gift to us.

Next year will be focused on cash flowing her Masters program.  Starting a 529 for our son.  Maxing out my 401k, two IRA's, an HSA and then some cash savings to prepare for eventually a bigger home or maybe some land. 

When we first got married I didn't even consider this loan to be our debt as her parents were adament about paying it.  But when her mother had her struggles we felt it wasn't right to not step up and help out.  We started paying on it in January of this year.  We contributed $6,880 towards the payments including our part of the payoff.  Don't really have plans to take on any sort of debt in the future unles it's to buy some land or a bigger home.  MMM and lurking on this community truly makes one realize what is truly possible when it comes to personal finances.  Most people think saving 10 - 15% of your income is a lot.  It really isn't though.  Our minimum goal is 50% and it should be attainable as long as we aren't ridiculous with our spending.   

 

[kissthesky]

Congratulations!! Being debt free must feel great :)

[soccerluvof4]

Congratulations! Having no debt is a great feeling and you might find you would rather save till you can buy your home for cash. Either way sounds like you guys are making sound decisions.

[Linea_Norway]

Congrats. Nice of you to pay off the sums that your parents promised to pay off, when your parents are struggling. Parents shouldn't have to get in (deeper) trouble to pay off their children's debt.

You might want to reconsider buying a more expensive house. Moving to another house is usually not cheap. You might need to invest a lot of time and money in making your old house look nice for sale. You might not sell your old house for what you think it is worth. You might use a broker who wants a slice of the cake. You'll need to pay a slice to the government. You'll need to refurnish the new house, buying carpet, closets, paint etc. You might need to buy a buyer/seller insurance, just in case.

We bought a new house for 2 years ago. And I think it cost us 2 years of FIRE. This was before we had discovered the website and didn't have a very concrete plan for FIRing. I regret it now. Now that we have a concrete plan, I know we'll need to downsize to get enough stash and I think this expensive house will be more difficult to sell than our old house, which was not easy to sell either.

[facepalm]

Congrats! The best thing about being debt-free is the peace of mind it affords.

[Rosy]

Congrats - debt-free living is definitely where it's at. I am glad you took over the payments when her mom was struggling financially - the older you are the harder it is to get back on your feet financially.