3/14/2008

How To: Celebrate Being Debt-Free

What? Hug your spouse. Crack open a cold one. Do I really need a 'how to' on this?

Why not?



First - and this is the hard part - you need to become debt-free. Even if you still have a mortgage, pay off the consumer debt. You can still do a happy dance as you are already ahead of the majority of Americans. We did it and we couldn't be happier. It was almost 2 years ago that we broke free from the slavery of consumer debt, and that it itself was nearly a two-year battle. We fought and struggled and sacrificed. In the end, we had payed off over forty thousand dollars - mostly from two cars and a student loan. Since then, we've gone through steps 3, 4 and 5, and moved on to our 15-yr fixed-rate mortgage. Baby step 6 is technically next - pay off the house early. As a single income home, that may take some time, but not impossible. I say 'technically next' because we are having to revisit 3, 4, and 5.

  • Baby Step 3 [Fully Funded Emergency Fund] - Every time life takes a swipe at us, the emergency fund takes a hit and we have to go back and replenish.
  • Baby Step 4 [Retirement Investing] - We've had some issues getting my wife's old 401k rolled over properly over the past year, but it looks like we have things settled finally. May need an Investment Committee meeting to make sure all of this is set the way we want it now, especially with my wife at home.
  • Baby Step 5 [Kids' College Savings] - As I've mentioned before, we have a new little one, and we need to get her college savings going now.
Kinda frustrating, but hey, that life! Still, Baby step 2 or Baby step 6, you've earned the right to celebrate. Do it in style. Here are some fun ideas:
  • Vacation - You're scraped and sacrificed for how long? Months? Years? Treat yourself and kick back for a week. 7-day cruise, all-inclusive resort, la-z-boy and a stack of movies? Find what fits your liking and your budget - just because we're out of debt doesn't mean we trash the budget. Have fun, reap the rewards, and pay for it in cash! But really, vacation? Kind of a no-brainer.
  • Spend a car payment - on you! Or you and your spouse. What were you paying out each and every month for a car or two? $200? $300? $500? The average car payment in North America is $376 over far too many months. So now that you aren't shelling that payment out anymore, that money becomes disposable. Ok, so you may want to 'dispose' that money into a Roth IRA. But before you do, why not enjoy one of those payments? How nice of an evening can you have on $350? Pretty darn nice. There is room in there for a sitter, a show, and a really nice dinner. Maybe you'd rather have a Wii. How would you spend a car payment on you?
  • Credit card shredding party - How about this for an invitation:
    We've freed ourselves from the bondage of debt. Join us for an evening of friends, fun and shredding our credit cards! Thats right, they're going down. Ready to take the plunge too? Bring yours and we'll explain.
    A great way to celebrate with friends and do a little evangelizing at the same time.
  • Be weird - Dave fans know that this is a good thing. Sometimes it's fun to show your weirdness. The point isn't to be showy, but to remind your self of your accomplishment and inform others. Think of it as 'outreach'. Shegazelle has dreams of a customized license plate - NO PYMNT. That would look great on my 8 year old truck! You have to wonder what one of those guys driving a $45,000 brand new pickup truck thinks about a plate like that. J.D. over at Get Rich Slowly plans to quit his day job and blog full-time. Everyday when he rolls out of bed and 'goes to work' in his PJs (or whatever he does in the morning), he'll remember how he afforded himself that luxury - Debt Freedom. Weird!
  • Call in on 'Debt-Free Friday' - Another one for Dave Ramsey fans. If you are unfamiliar, every Friday on the Dave Ramsey show (radio and TV), listeners/viewers are invited to call into the show, tell their story, and scream, "I'M DEBT FREEEEEEE!". Maybe it sounds silly, but maybe you haven't been in their position. Some folks go a step further like Ana from Debt Free Revolution, who plans to drive to Financial Peace Plaza, watch the radio show from the lobby and call in from Dave's own lobby! Looks like they also have quite the evening planed as well. Congrats again, Ana! I'll be sure to listen that day.
  • Mortgage burning party - The holy grail. You did it. You paid off the house and now you want to celebrate in a way just as nutty as the accomplishment. Mortgage. Burning. Party. Fire up that BBQ grill - we're having steak tonight. And afterwards, the mortgage goes on the grill. Now I don't recommend you burn your actual mortgage. That may come in handy down the road, and with something this important, it's best to have all of the proper documentation. But with a little magic from Kinkos, you can produce a reasonable facsimile there of that will easily accommodate said 'mortgage' burning. Now that's fun, and a great opportunity for your friends/family/neighbors to ask, "Hey, how'd you do that?". As well as a great opportunity for you to help guide them in the right direction. Max from maxgrace.com even has some videos for inspiration.
Anyone have debt-freedom plans to share? How would you like to celebrate your release from servitude?

**UPDATE** Welcome Carnival of Personal Finance readers! To find out more about us, click here. Check out our latest personal finance articles here. Thanks for reading!


**UPDATE UPDATE** Welcome Carnival of Debt Reduction readers! To find out more about us, click here. Check out our latest articles here. Thanks for reading!

5 comments:

kentuckyliz said...

I'm debt free TODAY!!!

I figured 20 years of debt slavery is enough.

SheGazelle said...

What will be even better is when I move my NO PYMENT plates on to my next "new to me" car that looks brand spankin' new! People won't believe I paid cash for it!
Thanks for the idea of what to put on my Debt-Free Party invitations...I'm gonna use that for sure.

(not) the Jet Set said...

Kentuckyliz-

Big time Congrats! Keep March 19th on your calendar every year to remember your independance day - your independence from debt. Any celebration plans?

Looks like you have some other big accomplishments behind you as well. Congrats all the way around, and my the Lord continue to be with you.

(not) the Jet Set said...

shegazelle-

We'll be watching the mail for our invite.

just kidding. But it would be to see a blog post of your party.

cheers

Anonymous said...

i LOVE the "spend a car payment on yourself" idea... it's a reasonable amount of money, wouldn't blow my budget (once i'm out of debt next year), but would feel totally extravagant. i'm banking that idea!

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