My progress towards becoming Debt Free

Every once in a while I will write an update about my personal progress towards becoming debt free. This is another way I can hold myself accountable. Getting rid of my student loan debt was a huge piece of the puzzle, but it’s not the end of the road.

Debts I don’t have

I no longer have student loan debt. It’s been a year now and it still makes me giddy to say that. What an amazing feeling. Both of our cars are paid off. I have no credit card debt nor have I ever carried any in my entire life. One of my “financial mistakes” (I like it and don’t really consider it a mistake) was buying a time share. That is paid off as well. I have no debt on any large toys, nor do I have any debts to any governments.

Debts I still do have

1. My dental practice: I still owe about $235k on my practice. I have a plan to pay this off rapidly just as I did my student loans.
2. My home: I still owe about $360k on my home. I have had a 30 year mortgage for about two years and am in the process of refinancing to a 15 year mortgage. Why did I do this? First of all, owing money for 30 years for anything seems depressing. Refinancing to a 15 year term not only lowered my interest rate, but it helps hasten my progress towards becoming debt free. I don’t even plan on having the mortgage for all 15 years.

I have a plan to pay both of these debts off rapidly. Now I have loosened my pursestrings from my budget of when I was paying off my student loans, but I still am being smart. We enjoy a good travel budget, and home improvement budget. However we still are frugal at least compared to our income. As most practice owners know, my income changes every month. No matter how good of a month I have, my budget allocations for food, travel, entertainment, or anything don’t change. I simply put the excess (no matter how much it is) towards building wealth which includes paying down debt and investing. Even if I have a “bad” month pay wise I still make sure I save at least 20% for retirement financial independence. This is a must.

Summary of my progress

I am pretty pleased about my progress towards becoming debt free. There are several that have done it faster than me, but many that have done much slower or never. One important thing to remember is becoming debt free is not the end goal. It is a stepping stone goal to the ultimate goal of becoming financially independent. We cannot neglect saving for retirement financial independence in the name of paying off debt. We have to do both. If you live frugally and are smart with your money, you can do both. If you do, you will make it to financial independence and be able to work and live your life the way you decide just like the Physician on Fire.

-Debt Free DDS

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