5 Things I now splurge on since becoming debt free

Recently, I paid off my last consumer debt and since then there are a few things I now splurge on since becoming debt free. Paying off my car 8 months earlier than planned was the best decision I ever made. Even though I am all about budgeting my money and ensuring each cent has a job to do, I always thought of car finance as a good kind of debt to have which in honesty it isn’t. Debt no matter the form is still debt whether is your mortgage or credit card debt it is all still debt that needs to be paid off.

When you have a mountain of debt on top of your living expenses, it can feel like a never ending battle and this is why I love budgeting. According to my calculations, I had about 8+ months left before I had to make a decision whether to pay off the car (£6k) or trade it in for a newer model and get on another 3+ year loan. Until reading Dave Ramsey’s The Total Money Makeover, I didn’t think of car debt as a bad debt to have, I put this kind of debt as a necessity and never thought of a life without monthly car payments. Paying this off has completely changed my mind and now I can share the 5 things I now splurge on since becoming debt free.

5 Things I now Splurge on since becoming debt free

I want to first off reiterate that just because you have paid off your debt doesn’t mean you can go ahead and blow your budget or worse not have a budget whatsoever. Many people who get out of debt end up back in debt only a few months after because they are not disciplined enough to break the cycle but another major reason is not having an Emergency Fund which they would pull from should an emergency arise. I personally found myself with a debt 6-months after I paid off my almost £12k debt because I had an emergency but did not have enough saved up so I put it on a credit card and that took me another 2-months to pay that off in full.

So, whilst it is important to enjoy your money especially after months (or even years) of living by the book and paying off debt without so much as a ‘cheat day’, you still need to be careful. I have been budgeting for many years and I have been in debt with PayDay Loans, credit cards and store cards and this was such a tough time for me but I knuckled down and paid everything off. I am now financially stable (and could be more) that I am able to allocate certain funds to my ‘no judgement fun money’ and in this post I share the 5 things I now splurge on since becoming debt free plus tips on how to continue being debt free whilst enjoying your money,

#1 Luxury Holidays

As a frequent traveller (pre-covid) it would be wrong of me not to upgrade my travel experiences every now and again. Sure I won’t be flying business class for every trip but I will most certainly be enjoying a nicely priced ‘hotel or vacation home’ because I want that luxury treat every now and again. In order for me to be able to enjoy all the luxury I want on my travels, I have implemented two things which anyone can implement too:

1. Save for trips every single month: Every month I put £200 extra for my trips that I have planned for next year and then I also have sinking funds where I have another ‘small change’ savings for holidays. Whilst I could easily run the holiday through my budget, it makes sense to budget for it and supplement with my budget if need be.
2. I have a fully funded 3-months emergency fund (although my goal now is 6-months) which means should the worst happen whilst I am travelling and my insurance can’t cover me there and then, I can dip into my emergency fund to cover whatever cost.

#2 Save More Money

When I was still paying off my debt many moons ago, I could barely scrap £10 together to add to my savings accounts and this is why whenever an unexpected bill arrived, I went further into debt as I needed to borrow more money to cover that cost. Having gone through such an experience I know I never want to be in that situation ever again and this is why I decided to make sure that I save more every single month. My goal is to ensure that every single month, I save at least 50% of my monthly income and I am able to do that because:

• Because I don’t have any other debts that I need to pay off and;
• Because I chose to live below my means – I have had two pay rises in the last 2 years and I still live on my salary from 2 years ago and save the difference.

#3 Invest More Money

If you haven’t watched my investment story or read ‘investing for beginners‘ then you need to check both of these out as I share how I got into investing and my positive experience so far. As part of my savings, I make sure to dedicate 10% of my monthly income to investing in the stock market. When I started investing over 7+ years ago now, I started with investing in only one company and although this limited my portfolio, I was fortunate that it paid off big time and highly recommend investing. Again, I am able to invest more money because I don’t have any debts to pay other than my mortgage and I make sure to live below my means every single month.

#4 Tithe More

If you don’t know, I am a christian and I believe in giving to those less fortunate or in need and since becoming debt free I have been able to give more than before. Same as my investing I make sure to allocate 10% of my income towards giving to others. When I was planning to go to university, we did not have enough money to pay for my tuition and a local charity in my area was able to support me with funding for part of my tuition fee. Thanks to them I finished university without student debt (I had other debts though) which I am thankful for and my intention is to continue paying forward. Regardless of how much you make, see if you can afford to give between 1% – 10% of your earnings to those in need and if money is tight then trying volunteering your time instead.

#5 Allocate More Money

This is something that I believe is so important to ensure you have in your budget and I help my friends also see the value in this. The worst thing when you are in debt is not being able to enjoy the money you work so hard for but the minute you are paid, various vendors fight over it and its gone before you even get a chance to enjoy it. I went through this when I was as university and immediately after that. I was constantly frustrated and felt less motivated to go to work because I knew the minute I was paid it would all disappear to the many debts I had. Having a category in your budget that is dedicated to fun is the best feeling in the world, before I would just allocate like £50 but now I can allocate anything between £50-£300 depending on what I want to spend my fun money on that month.

And there you have it, 5 things I now splurge on since becoming debt free. Are you debt free, if so what do you splurge on now?