Today is our 4th Debt Free Anniversary!

Today is our fourth anniversary of being free from our debt. In the two or three years leading up to October 10, 2012, we had paid off our car loans. One was paid off a few months early; the other, maybe a year early? But it just didn’t seem right to pay off the mortgage. The payment was only about $995 a month, and we were already paying $1,500 a month in hopes of paying it off in five years instead of eight.

About six months earlier, as our accountant prepared our taxes, we reviewed our bank accounts with him. “What’s the money in this savings account?” he asked. “What’s it for?”

There was close to $70k sitting in that savings account. It was the proceeds from the forced sale of stock when the company I work for was acquired by a tech behemoth. I had mentally earmarked it for our older daughter’s college education, although I had failed to invest it in a 529 or similar plan. And because investments are just a bit terrifying to me (I’m very risk averse), I didn’t want to lose any of it.

Our accountant suggested that we might want to pay off our mortgage with it. We looked at each other nervously. Our daughter was already 13 years old. If we drained this savings account, how would we ever pay for college in a few years? The accountant replied that with the mortgage out of the way, we could funnel $1,500 a month into a 529 plan and rebuild the balance by the time she graduated.

At the same time, we were looking forward to our younger daughter starting first grade at the public school, after six long years of paying for full-time daycare and private kindergarten. This milestone would free up another $1,000 in our monthly budget. In theory, we would have nearly $2,500 a month at our disposal. Maybe it was possible.

Did we run out that day to pay off the mortgage and open a 529 account? Um, no. I don’t like risk, remember?

We waited nearly six more months, running numbers, watching our budget, waiting for some unexpected expense to drop in our laps, like a sign from the heavens that we should hold on to the $70k.

There were no signs. As fall approached, we finalized plans for a weeklong trip to Disney World.  My husband is NOT a Disney fan and thought that, for the cost of this trip, we should be spending a week in Europe instead. We (okay, I) saved and planned for this trip for nearly a year, obsessively reading fan blogs and building a meticulous schedule that would maximize our ability to squeeze in all the rides and character visits.

A week before we left, as I transferred money between accounts to cover our expenses, I looked again at that $70k sitting in the bank account. “Let’s do it!” we said to each other.

Three days before departing for Disney, I walked into the bank and asked to transfer enough money from that savings account over to pay off the mortgage. The balance was $68,195. I waited for the confetti to drop, for the bank manager to approach with a microphone, asking, “You just paid off your mortgage! What are you going to do now?”

“I’m going to Disney World!!” I would scream.

No fanfare at my little credit union, though. It was really rather non-eventful. But we had a great time on vacation. He’ll never admit to it, but he did.

In the last four years, our incomes have continued to rise, and we’ve realized even more proceeds from the sale of company stock. We’ve been able to:

  • Open those 529 plans and save nearly $140k between them.
  • Purchase two new-to-us vehicles for $45k without borrowing a cent.
  • Do a major kitchen renovation and replace our furnace and driveway ($75k).
  • Save for a major family trip (yes, even bigger than Disney World) in July 2017 ($24k)

But perhaps the greatest outcome of this debt-free life is that we no longer worry about paying the bills should one or both of our jobs be at risk. I no longer sweat those last few days before payday. We’re forced to prioritize our projects and the savings we need for them. And yes, I sleep really well.

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