Unexpected Benefits of Paying Off Debt

The last few years have been a serious financial boot camp.

Let’s start with a history.

  • In 2010, I started taking out student loans. I didn’t have a plan. Where do I sign for money?
  • In 2011, I started being conscious with my loans. I found a few PF blogs. I didn’t take out all I could. I tracked every penny I spent. I budgeted. I planned.
  • In 2012, I continued with my plan, but chose to take out as many loans as I could to cover my expenses for the foreseeable future. The 1% origination fees and little bit of interest were a price well paid for peace of mind.
  • In 2013, I graduated with a bunch of debt and no job prospects. I’m a horrible liar and I didn’t want to practice law. Interviews were a disaster. I searched my soul and networked like crazy. I had to figure this out.
  • In 2014, I figured out what I wanted to do. I landed a great job doing just that. After my first paycheck hit, it was time for my loans to die. I started this blog. Things got serious.
  • By early 2015, my loans were gone.

Most of the reasons for why I attacked my loans and paid them off aggressively were based in fear. I was scared of the statistics. I didn’t want these loans to follow me around for the rest of my life. I was sick of being in school forever. I wanted to distance myself from the reality that I’d been in school for my entire life. I was a little scarred that it took me so long to figure out what I wanted. I felt helpless and hopeless. Paying off my loans felt like something I could control. I didn’t want to feel helpless or hopeless again.

It’s been over a year now and I feel like I’ve successfully addressed my fears.

I am a statistic, but one of success. (Note: We are always statistics. It just matters what side of the statistic you are on.) My loans are gone. They only followed me for a year. I’ve moved on from school and I’m happy where I am.

These are all benefits I hoped to accomplish by ridding myself of my student loans. In addition to these benefits, I’ve found that there are a few I didn’t anticipate.

Here are three benefits I didn’t expect

1. Personal Finance 101

Paying off debt is a crash course in personal finance. I was alright with money before student loan destruction started rolling around in my head. Now, I would consider myself an expert. I know the pros and cons of different strategies. I know the ins and outs of various products. I can recommend different ways to save more or earn more. Even better, I act on most of my knowledge. I still have a few skeletons in my financial closet *AHEM* car loan *ahem* but I have a plan for it all and I’ve accepted my actions.

If it weren’t for my student loans pissing me off, it would have taken me years to figure all of this out. It would have taken even longer for me to put it all together. Thanks to reacting to my debt emergency, it all came together within roughly the same time it took my to be free of my loans!

2.  Saving Residuals

I had a big fire in my gut driving me to kill my student loans. It was a huge goal and I wanted it. I continually challenged my expenses and did a little work on my hustle to get that debt off my back. With all of this force behind my spending and saving habits, I was able to put significant sums of money toward being free.

After my loans were gone, I experienced an incredible residual effect. I still had the same amount of income but I no longer had that huge payment every month. I channeled all of that money into savings and became the bad ass saver I was meant to be. I maxed my IRA, gave my 401k a big bump and threw the rest into the House Fund.

Without a debt emergency, I wouldn’t have been able to minimize my expenses to the extent that I have and save this much. I save more than I thought I could and that’s coming from someone who claims to be a  saver by nature! By having and reacting to this debt, I know I’ve already come out ahead in the long run.

3. Unintentional Intentionality

By constantly examining my expenses, I had to make some tough choices. I challenged everything. That fine tooth comb got a lot of use. By closely examining my expenses, I was able to determine and prioritize what I actually want out of life. What do I want to spend money on? Where can I cut back? Hubs and I have cut back a lot and we are still happy. Actually, we are happier. We know where our money is going and its where we want it to go!

If I hadn’t faced my debt emergency, I wouldn’t have had to evaluate the life I’m living. I wouldn’t have made those decisions and I wouldn’t have realized that I’m happier on the other end.


In effect, I paid 50 grand for a crash course on personal finance, how to save a ton of dough and the ins and outs of intentional spending. Oh yea, and that degree. Sounds like 50 grand well spent.


Have you noticed any unintentional benefits of paying off debt?


April 2016 Net Worth

I have a monthly update problem.

I get super excited at the end of the month to write an update. I usually waste my time by collecting the numbers piece by piece. Sometimes I even try to estimate my monthly savings account interest so I can predict my end numbers. This is a lovely use of time. /s. What makes it horrible is that my HSA and 401k don’t update until the day after the end of the month and my 401k can only be accessed at work. Then for no good reason, the first week of the month is always the busiest, which why I’m writing a net worth update on May 10.

Hello 🙂

Let’s talk about April.

I got a taste of a whole different world. I did an interview in April about my student loans. The article was over at StudentLoanHero. I shared a unique part of my story that I don’t talk about much over here. You can find the article here.

Other than that it was a whole lot of work and normal life. I’m starting to realize why adults think time flies by. Without life milestones, it all kind of blurs together.


April 2015:  My first month as a saver! My loans were paid off and I had a whole $2203 in the house fund. I had a net worth of $32,869.

April 2014:  I owed $34,985 on my student loans.

April 2016: Another Great Month!

Screen Shot 2016-05-10 at 9.17.17 PM


Car Loan: $7,217 ($377)  Slow and steady progress with my 1% car loan.


Retirement: $34,822(+2,202) This month was a lot of contributions and little help from the market. It’s pretty crazy that without any help from the market, I contribute roughly $1950 to this line item every month.  I’m a little higher than that because I didn’t contribute to my IRA the first few weeks of the year.  It’s been an incredible mindset shift from saving a few hundred per month to now saving roughly TWO THOUSAND per month for retirement. Old Kate is incredibly happy with young Kate right now. 

Taxable: $8,269 No change.

Auto Value: $12,219 (-150)  The depreciating asset keeps depreciating. 

House Fund: $28,649 (+2,509) Another month roughly around average. I shifted around a lot of savings in May so the House Fund contributions will be way down. I’m taking a moment to appreciate how big this is. Next month it won’t be so fluffy!

Round Two Progress: (What is Round Two? check here!)

  • Baby Saver: $2125 
  • Middle Saver: $7953 (Loan value: $5828) ✔
  • Thing 1: $16,453 (Loan value: $8500) 
  • Things 2: $24,953 (Loan value: $8500) 
  • Big Momma: $45,330 (Loan value: $20,377) >in progress<
    • $28,649 down, $16,681 to go!

HSA: $6,471 (+297)  Mostly contributions, just like my retirement accounts. No bills this month, so that’s exciting. 

Car Fund: $552 (+51) Look! Another $1 in interest! My maintenance minder came on this month, so I’ll need to get that taken care of. It shouldn’t be too expensive, so my hope is to cash flow that and leave this alone. 


Net worth: $83,765. Up $5,286 from last month. 

This is my lowest increase of the year so far, but that only means I’ve been having a great year. It is exciting to be over $80k. I’m only a few months away from $100k! It’s hard to wrap my head around that.  … I wonder how long I’ll feel I’m behind financially. I seem to be making up a lot of time.

How was your April?  Are you on track for where you thought you’d be?

Unconsciously Sabotaging the Future

Confession time.

I am a competitive person. I played sports for most of my childhood. When my body broke, I turned to competitive choir. I was good. I’m still alright, but in high school, I had all the awards to demonstrate my choir’s and my own excellence. When I got to college, I was competitive with my education. I was really good at school. My transcripts reflect that.

Now that I’m in the working world, I’ve chosen two routes of competition. First, I want to be excellent at my job. Second, I want to save all the money. This post is about saving all the money.

When I started my job, I had little invested. I had my small taxable account and $5500 in an IRA. Hubs had dabbled in 401k investing for years. He had roughly $50,000 saved.

It started innocently enough. I wanted to race him to $100k in investments between our 401k and IRA accounts. My taxable investments didn’t count. He had a huge head start, but I had a fire in me. I already felt like I was incredibly behind with investing, and I knew I was going to hit the ground running.

A race to $100k invested helped both of us. The more we have invested the better. As the CFO of our marriage, I started with a fair approach. I got him into an IRA and we maxed that. We both bumped up our 401k contributions.

Then I got a little crazy. I continued to bump up my contribution before the New Year and set it to max in 2016. Then I got distracted by other savings goals

We are still saving for a house, as we have been since we paid off my loans. Then we booked a vacation to Australia. I created a budget for the trip and set up automatic transfers into our travel account to cover our expenses.

Here I am today, maxing out all of my retirement accounts, saving for a house, saving for a vacation. Yet, Hubs isn’t maxing his 401k. I built it into the schedule for him to set his account to the maximum percentage he needs after we save for Australia. It wouldn’t max in 2016, but it will be all ready to max in 2017 when he has a full year contributing that percent.

The reality is that I’m prioritizing a house I don’t want and a vacation (I’m really excited for) over my husband’s retirement. I’m also choosing to pay more in taxes because his 401k isn’t maxed out. Why do I want to pay more taxes??

And because I’m competitive, I’m trying to win this race to $100k.

I didn’t realize what I was doing with this new plan. As it evolved, the plan wasn’t a bad one. However, now in its current state, it screws him over. I refuse to screw over my best friend.

Would I love to catch up to him? Absolutely. Maybe I will eventually because I have a better 401k match. But I am not willing to prioritize a sweet vacation and a house over his retirement and our future.

I’m cancelling the race.

Since writing this, Hubs bumped up his 401k. He’s still not fully comfortable with investing so he bumped it up as much as he was comfortable. Next year, he’ll max. This year, he’ll be close. I plan to evaluate our cash flow over the next few checks to see if I we have room to get him to max this year. Baby steps.