Life After Student Loans – What’s Next?

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In the last few weeks we’ve discussed our big accomplishment of paying off $40,000 of student loan debt and the obstacles we encountered along the way. It’s been a long journey, a little over 4 years, and this is the biggest financial goal that we’ve set and accomplished together. But now that we’ve fully paid off our student loans, what’s next?

Life without student loans has been awesome. While there was no confetti or parade when the last payment was made, I did feel a huge sense of relief to no longer have the burden of student loan debt on my shoulders. This gives us one less bill to pay each month, and more flexibility in where we allocate our cash flow. We’re enjoying this accomplishment, but we know it’s time to focus on the next big goal!

Goals Guide the Path

Without a goal you’re consciously working towards, it’s very easy to grow complacent and have your financial progress stall. Liz from Frugalwoods talks about how she considers one of her biggest financial mistakes to be not setting a new goal after she and her husband purchased their home in Cambridge. Without a big goal to guide their decision making, they began to spend their money less mindfully. Once they set a new goal, their financial progress ramped back up big time.

With this in mind, it’s paramount for us to decide what’s next in our journey, and what we hope to achieve.

Determining Our Next Steps

Now the biggest goal we have is to reach financial independence. This is actually a term I’ve never used on the site before, but it is what has been driving my passion for personal finance. Financial independence is commonly defined as reaching a point where you no longer have to work if you choose to, because your investments cover your expenses.

There are many different ways to achieve this goal and many different reasons why someone would want to. I’ll continue to dive into this more in-depth in future posts. The biggest point is that through financial independence, you’re buying back control of your time and growing your flexibility.

While financial independence is our overarching goal, it’s a journey that will likely take 10-20 years to achieve. That’s a long time to wait! In order to avoid growing impatient, it’s important for us to also set some shorter term goals along this journey.

Here’s what’s next for us:

• Pay off the rest of our car loan ($4,000) to reach debt freedom.
• Continue to grow in my career, and grow my income to six-figures.
• Continue to invest in our 401k’s and Roth IRA’s, eventually getting to the point of maxing out all 4 of those accounts.
• Build up a bigger emergency fund (we currently have 3-4 months of expenses saved up, we want to push it up to 6 months). This money can also help us prepare for growing our family in the future.
• Start a separate savings account to begin to build up money for a house downpayment. We currently live in the Bay Area. We’re happy with where we live and both of our jobs are going really well. Right now buying real estate isn’t feasible, but we aren’t planning to be in the Bay Area forever. We’d like to prepare to be able to someday, as a primary residence and a rental property.
• Save up money for traveling to new places. Travel hacking has helped us make traveling happen more often, and we’d like to continue to experience new places together.

We’re excited about these goals and being able to put our newfound cash flow towards them. Some of them can be achieved this year, some are ongoing, and some may take 5 years. The important point is that we’re consciously working towards new achievements and putting our money towards areas we value.

Thanks again for following along this journey with us, there’s much more to come!

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