Photo by Kyle Glen via Unsplash.com
For so long my debt repayment was entirely about running away from debt. Debt represented constraint, fear, and limitations.
Whenever I focus on running away from something, I try to stop myself and consider: what am I running towards? The goal with debt is obviously elimination, but for what gain?
So, since I’ll be debt free by March 2019 (!), I decided to dream (and plan) a little, and make my budget for April 2019, the first month that I’ll be debt free.
Not paying off debt will free up $1,382 in my budget every month, so where will all this money go?
Will I eat out more? Go to Happy Hour twice a week? Buy a new car? More clothes? A new laptop? A PUPPY?
Sadly, I won’t be getting a puppy.
Not-so-sadly, I also won’t spend any more money on those other things, either. I’m determined to avoid lifestyle inflation at all costs– with the only exception being potentially moving to the city in August and thus paying more in rent.
Here’s where my money will be going from April-June 2019:
- I’ll be putting $900/month extra in my emergency fund (previously, I had been putting $100/month into it after reaching the baseline amount of $1,000). This will continue until June, when it will be fully funded.
- I’ll save $100 extra for my travel fund each month, so $150/month instead of $50/month.
- I’m a teacher, so I need to set aside money to pay myself over the summer. My “summer payment” budget line will increase from $100/month to $432/month so that I can *actually* have enough money over the summer instead of the puny amount I’ve built up so far… Oops!
- And, of course, my lifestyle will inflate… by $50. I’m increasing my grocery budget from $130 to $150, my going out budget from $150 to $160, and my miscellaneous/pocket money from $60 to $80.
- All extra money will be invested into retirement.
After June 2019, my emergency fund and summer payment will be fully funded, which will free up about $1,300. So, when I start getting paid again in September 2019, that money will all be invested in retirement. That will add up to about $4,800 in my Roth IRA, which won’t max it out this year (the max amount for IRAs in 2019 is $6,000). But in 2020, when I don’t need to put anymore money into my emergency fund for the whole year, I will max it out and be able to contribute to my company 457 on top of it.
I’m so laser-focused on this plan right now. I can’t wait to live #debtfree, have a fully-funded emergency fund, contribute to my retirement, and feel all of the security that comes along with those accomplishments. I’m not just running from debt screaming; I’m running towards a life of financial independence, opportunity, and freedom.