Updated on 01.26.12

What’s Next After Debt Freedom?

Trent Hamm

Autumn trees country road fence
Thanks to Forest Wander for the picture.

Every new beginning comes from some other beginning’s end – Seneca

As I write this, Sarah and I are completely debt free.

We have no mortgage. We have no car loans. We have no student loans. We have no credit card balances. We have no consumer loans of any other type. We have a healthy emergency fund that will keep us from falling back into debt very easily. We have a healthy amount of savings for our next car and for our next appliance replacement or two. We’re saving for retirement, for our children’s college education, and for our dream home. We both have steady incomes for the time being, incomes that exceed our monthly expenses.

Our monthly bills right now, taken as a whole, are lower than they’ve been at any point in our married lives.

So, what’s next?

It’s a question that Sarah and I have been struggling with for the last few weeks. What is our next step?

Up to this point, there’s been a clearly-defined path to follow. Build up an emergency fund. Get rid of your high interest debt. Build up a bigger emergency fund. Start saving for retirement and for your children’s education. Pay off your lower interest debt. In most cases, own – meaning without any debt – your living quarters, whether it’s a home or a condo or something else.

It’s a long and difficult journey. It took us almost a decade to follow that path, and that’s with us living rather frugally and me working a lot of hours, both at my full-time job, on The Simple Dollar, and on countless freelancing gigs over the last several years (Sarah made this route possible with her spectacular efforts with household concerns.)

In a lot of ways, it required us to change who we are. I don’t have the motivation any more to spend money in the way I did a decade ago. It’s not something I even want to return to, and Sarah feels almost exactly the same way.

Now, though, there’s no clear path for us to follow. We’ve reached the point in our financial journey where th advice begins to diverge heavily.

Some people say that when you have a good foundation, you should “live a little” and do things like travel or own a nice car. Others suggest investing aggressively so you can move towards a life where you no longer have to work for a living. Some point toward entrepreneurship. Others simply say to keep things nice and steady until opportunity knocks.

As different as those paths seem, there are a few fundamental things they all agree on.

First, you need a goal. Without a goal, you’re going to simply spin in place and, as the saying goes, the devil finds work for idle hands to do. The multitude of ideas above are all goals, they’re just different ones that require a different path to get there.

Second, you need communication. Sarah and I have no interest in going down different roads at this point. We’ve travelled this far together and we want to keep going together, wherever that path may lead. However, left to our own devices, we would have somewhat different visions for that path. Without communication and discussion – a great deal of it, actually – we could easily find ourselves going in different directions at this point.

The fundamental question is whether I want to be setting my goals or our goals. I’d far rather set our goals, even if that doesn’t mean having things perfectly my way. We agree on a lot of things, and the value of resolving the other parts together is much greater than what we would get out of addressing them separately and drifting apart.

So, what do we want? What’s next for us?

We’re establishing a list of things for the future that we both agree on. This is in addition to our dream home. We both want to travel a significant amount with our children when they’re older and can appreciate it and grow from it. We both want to increase our giving to charity. We both want to retire as early as we can so we can focus our energy on charitable work.

These are the things we want from our lives. They’re simple things. They are what makes us happy.

We’re not going to move until we can build our dream home out of pocket. We are not going to return to indebtedness again. If that means slow progress toward the house we want to someday build, so be it. Debt introduced an incredible amount of stress to our lives, and there’s no material thing that’s worth bringing that back into our lives.

The same holds true for any of our other plans. We’re not going to do anything that leads us anywhere close to debt ever again for any non-essential reason.

We have a home.

We have what we need.

We have no debts.

Most importantly, we have each other.

Everything else will follow.

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  1. Cynthia says:

    Congratulations Trent and Sarah! That is quite an accomplishment and one I think most of us (if not all) are striving to achieve. You are living the American dream, in my opinion. I hope to join you there in the next 10-15 years (when my house is paid off I hope!).

  2. Andrew says:

    Trent, a little research would have shown that Seneca never said that. However, I just played “Closing Time” for the first time in ages, so no worries–

  3. Adam P says:

    The first meaty Simple Dollar Post of 2012. I like it. I think this is something that PF writers/bloggers should spend more time on; the what is next phase once you’ve reached the point where:

    1) your expenses are much lower than your steady income
    2) you have no student loans or consumer debt ( I have no problem with secured mortgage debt that is within your means especially at today’s record low interest rates )
    3) you are saving adequately for your retirement needs
    4) you have a healthy emergency fund

    It is obviously a great problem to have; but it is a problem none the less. My own response to this problem is 1) continue saving for far in the future big things like a dream home purchase 2) give more time and money to charities I believe in 3) spend time to see what purchases will make you happy – trips to see far off friends/family or places; fine art; renovations. Easier said than done.

    The one thing I’m surprised not to see here Trent is ‘giving back’ (my #2 above). I know you do make charitable contributions and I believe you are involved in your church as well; to me the natural result of reaching a point in your finances like this is to want to give back to the community and the less fortunate.

  4. Adam P says:

    D’oh. Now I re-read and see the increasing charity. Sorry, that is my bad. Coffee first, then post!

  5. Johanna says:

    Wait, what? You bought your house after your first child was born, right? So you’ve owned it for 5-6 years. You paid off your mortgage in 5-6 years? And for one of those years your wife was on parental leave? And you paid off all your other debts and bought a brand-new Prius at the same time? And your full-time job is *this*?

    Man, I’m in the wrong line of work.

  6. Linda says:

    What an accomplishment – I’m inspired.

  7. marta says:

    Johanna, I suspect the blog sale did wonders for his cash flow, and that’s how they managed to pay off the mortgage this quickly.

  8. Sarah says:

    Congratulations! What an amazing thing. Enjoy it.

  9. Allison says:

    Seriously. As much as we like to complain about this blog, I’m pretty sure we all just paid off his mortgage…

  10. Riki says:

    I suspect Trent paid off the mortgage after he sold the blog.

  11. Riki says:

    Yeah, what marta said.

  12. Johanna says:

    That’s true. If selling the blog was basically an advance on his income for the next three years, that’d be something.

    Anyway, here is a suggestion for something to do with all the money you don’t know what to do with: Hire somebody to proofread your posts before they go live. If that’s not enough, hire somebody else to read the comments and phone you up with the important parts.

  13. Mister E says:

    As much slack as you rightfully recieve on here, this is quite an accomplishment.


  14. Riki says:

    I’m not totally sold on the idea of paying off my mortgage.

    I can see the appeal, sure, but my rate right now is so low that I think a better long-term plan is to invest any money I would make on extra mortgage payments. I’ve run the numbers and even a fairly conservative investment puts me way ahead in the long term.

    Obviously as the rates change this balance changes, but my excellent rate is locked in for another 5 years so I’ll reconsider at that time. But for now, my money is going into retirement, not my mortgage. And even if I could pay the whole mortgage off in one fell swoop, I’m not sure that would be the best course of action at this point.

  15. Kevin says:

    Best post in weeks. Great job, Trent.

  16. Steven says:

    I think you ought to be on the lookout for a piece of land upon which you can build your dream house. It’s all about taking little steps towards accomplishing the bigger things, right? Finding exactly where you want to build your house would be an excellent first step, and it’d give you the boost you need to make that dream a reality.

    Congrats on being debt-free!

  17. DOT says:

    Great job on paying off your mortgage!
    Also, I am not sure how accurate the claims are that you sold the blog… anyway if it is true, great job on that also!
    I think the blog sale (if accurate) is a greater accomplishment. 4-5 years of self employment,hard work and long hours paid off in building a successful, profitable and sought after business.
    Paying off the mortgage was just autopilot with your funds. Growing and selling a profitable business required a much greater investment of time and talent to produce those funds.

  18. SwingCheese says:

    Very well done and congratulations to you both!

    However, I would like to point out that Seneca never said “Every new beginning comes from some other beginning’s end”. I know there are online sources which attribute it to him, but they are wrong. As far as I know, he never even wrote anything that approximates the meaning behind that quotation. (To be fair, though I’ve read a lot of Seneca, I haven’t read everything he wrote, but it just doesn’t sound like him.)

  19. DOT says:

    Forgot one thing.. for what it’s worth in my experience I agree with the advise to “keep things nice and steady until opportunity knocks”.
    You’re in a new area of your life and need to gently test the waters to see how you can best use this new found freedom.

  20. Josh says:

    Congrats Trent & Sarah and great post!

    Just stay focused on your next big goal: Your dream home.

    Do you plan to buy your land first, then save to have enough money to build, or wait until you have enough for both? If you buy the land first it could provide some good recreation/retreats while you continue to save for construction.

  21. lurker carl says:

    Congratulations! Isn’t that a wonderful feeling?

    However, you still have a clear path ahead as long as you strive to satisfy your short and long term goals. Reaching specific milestones should never cloud the rest of your plans. Nothing else in your life has changed, only the debts are gone.

  22. Maureen says:


  23. Elizabeth says:

    Mortgage-free! What a milestone. Congratulations. I’ve been reading your blog for several years now and it’s inspirational to see the progress you’ve made in that time. :)

  24. valleycat1 says:

    Congratulations! We paid off our mortgage about 10 years ago, despite my reservations about the benefits of doing so, and it’s really great not to have that monthly drain on the income. Everyone has to run their own numbers on this, but I was really surprised how much more freedom that has given us. And we paid it off before the housing market upswing & then downswing, so the impact of that for us is just watching the market value of the house change, and how that might impact our plans to relocate in a few years.

  25. Vanessa says:

    Congratulations! I remember when I paid off my debt. I expected I’d be swinging from the rooftops but it was kind of anti-climactic. But there is a peaceful feeling that I just can’t describe. What are your emotions like right now in regards to being debt-free?

    I feel like Johanna, I’m in the wrong damn line of work. I need to invent something and sell it for a profit, fast!

    I don’t have the motivation any more to spend money in the way I did a decade ago.

    Really? You write a lot about how hard it is for you to avoid temptation and the mental tricks you use to overcome it. So which is it?

  26. Jayme says:

    That’s exciting! My husband and I will be there hopefully in a year and I can only imagine how it will feel.

  27. Ginger says:

    Are you planning to rent out your current home when you get into your dream home or are you planning to sell it?

  28. Laura says:

    Congrats on reaching a milestone!

    To everyone wondering how he paid off the mortgage so quickly, my husband an I plan to pay off our mortgage by the end of the year, which is 6 years after we bought it, almost to the day. So it is definitely possible, even without a “buyout,” although I suspect that is the case here since it happened so suddenly. I am also glad to see that he and Sarah are still committed to each other and to shared goals. Financial success is one thing, but personal and relationship success is more important.

  29. Angie says:

    @Laura #28 – especially with all the drama over at Get Rich Slowly!

  30. Kacie says:

    Way to go! It’s a huge accomplishment, and in such a short amount of time.

  31. Congratulation! We don’t have any consumer debt, but we do have quite a lot of mortgage debts.
    It’s time to kick back a bit and enjoy the journey. Life is good.

  32. Johanna says:

    @Laura: I was never under the impression that it is impossible for anyone to pay off their mortgage in 6 years – I was just surprised that Trent was able to do it, given everything else we know about him and what he’s been up to over the last 6 years. I had forgotten about the site buyout, which must have played a big role.

  33. Jon says:

    I guess I’ve been gone too long from this site. When did Trent sell the blog?

  34. Another Katie says:

    A quick look at real estate in Des Moines, IA reveals that a nice house can easily be had for well under $100,000. So for those who are wondering how Trent paid his mortgage so quickly it is useful to keep in mind how much real estate price vary from place to place. One house I saw listed for $75,000 would cost $400,000 where I live.

    Congrats on paying of all of your debt.

  35. valleycat1 says:

    #33 Jon – he posted the info on Dec 15th. You can search the site for Cut Media to find the link, or go to the chronology list of archives.

  36. Jon says:

    #35 valleycat1

    Thanks. I came back here only a couple of days ago to poke around, but still didn’t see anything interesting being written.

  37. Laura in Seattle says:

    Congratulations Trent! I’ll add my voice to a few of the others above and suggest you start looking now for the land on which to build your house. Get an idea of the parcel size and land situation you want and how much it will cost. Then set that as your new savings goal/project.

  38. Jackie says:

    Congrats on the mortgage Trent and Sarah!

    I can’t wait until I have my smaller financial goals taken care of so I can start working on the mortgage.

  39. Amy K says:


  40. EngineerMom says:

    Congratulations on paying off your mortgage!

  41. Martin says:

    First, congratulations.

    Secondly, having made the journey the way that you did, would you have changed the path in terms of buying your first house with a mortgage? I clearly see the logic involved in waiting on your “dream home” until it can be paid for in cash, but the first home was bought when the alternative would be spending money on rent. Any thoughts on whether that first mortgage is a necessary evil?


  42. Tara says:

    I paid cash for my condo because I was terrified of having a mortgage… as a debt-free person I am busy stockpiling money for retirement and emergency funds, so I have the freedom to change careers one day and do the things I want to do. I don’t have a feeling of wondering What’s next?, it is always a continuous road of living below your means, saving for the future, and enjoying today.

  43. Ryan says:

    Congrats to the both of you on being debt-free! This is a huge milestone to be proud of. Working on getting to that point myself, just have a car note to pay off. Should be paid off by year’s end!

  44. Sandy says:

    Well done and good for you :-D

  45. kc says:

    Congrats! It’s definitely a wonderful feeling when you are finally debt free. Don’t overthink things too much, – your plans and next steps will come into focus quickly enough.

  46. Jennifer says:

    Congratulations! What a terrific accomplishment! Trent, this is the best post I’ve seen on your blog in a very long time. Nice work!

  47. Christine says:

    I think that it is great that you and Sarah are sitting down to have this conversation now, and creating new goals together. It’s probably the lack of this type of communication that led to the demise of J.D. and Kris’ marriage.

    I’m glad to see that you are taking responsibility both financially and within your relationship. Good luck to you both!

  48. Johanna says:

    Christine, don’t you think that type of comment could be hurtful to J.D., Kris, or anyone else going through relationship problems? They’re already going through a difficult time. They don’t need to be told that it’s “probably” their own fault.

  49. Evita says:

    Oh Trent, you write that Sarah made this route possible with her spectacular efforts with household concerns.
    Isn’t she the spouse with the full time job, the two-hour commute, the benefits and the family health care plan that made it possible for YOU to pursue your dreams ? This is no “household concern” to me ! She deserves much more that this trite aknowledgement of her contribution !

  50. Kate says:

    That’s awesome, and inspiring. We’ve been able to make a lot of progress in the past year because my husband’s business has increased, and we are looking forward to reaching similar milestones. Some of the comments had a bit of a tone, like “well, that worked out for you because we read your blog, but it couldn’t work for just anyone.” I say the best way to become financially secure is to build something valuable enough that people will pay for it!

  51. Andrea says:

    Congratulations. This is great news! Hard work and dedication DO pay off.

    Last April we paid off everything but the house, and I went through a similar period of ok, what am I supposed to do now phase after focusing for 5 long years at getting out of $130K worth of non-house debt.

    Back to Ramsey…Next step was to build the 3-6 emergency fund so working towards that, but in the middle of it, we paid cash for a car!!!! first time ever in 25+ adult years, which dropped our emergency fund back down, but oh how great it felt to not to go back into debt.

    Can’t wait to hear that you’ve built your dream house for cash.

  52. Maggie says:

    Congratulations. Having a mortgage paid off and being debt free is fabulous. We paid off our mortgage about 8 years ago and since then have bought 2 new cars, both paid with cash. We LOVE not having the payments although here in Northern VA real estate taxes and personal property taxes (on the cars) do take a bite twice a year. Enjoy and use some of the extra cash for a few treats as you move forward.
    You will be glad you did.

  53. Anjelica says:

    Congratulations!!! Been following your blog for several years now; you’re one of the reasons I too am debt-free. Thank you.

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