Life After Debt: What to Do Once You’re Finally Debt-Free


debt freeWhen Bianca Osbourne* went away to college, she had a lot of new experiences to acclimate to: living on her own, exploring a new city … and opening up her first credit card.

As soon as she turned 18, she was inundated with card offers and started spending like crazy—her parents had always supported her financially, and she was in the dark about managing money. It wasn’t until she graduated from university that her dire financial situation (the debt reached $15,000 at its peak) hit her. “I remember waking up one morning, realizing just how much I owed, and asking myself, ‘How did I get here?’” says Osbourne.

Overwhelmed and uncertain how to begin tackling the debt, she pushed it out of her mind, moved back in with her parents, and attended culinary school (funded by them). Once she finished her degree, at age 25, she finally committed to getting debt-free. She signed up for a credit-counseling program aimed at helping people in debt organize their money and pay their bills, and funneled between $140 to $250 a month into payments.

“In the beginning, paying off the debt felt exhilarating because I was confronting the situation and acting on it,” she recalls. “Then it got frustrating—I had started my own business as a chef and nutrition consultant and it started to really excel, but being in debt was limiting because I couldn’t apply for loans or a credit card.”

Two and a half years later, she could finally see the light at the end of the tunnel.

Great news, right? After all, this was what she’d been waiting for and working toward. But instead of being excited, Osbourne was nervous. “I was afraid that I would end up in debt all over again,” she says.

She also felt tremendous pressure to succeed in her professional life once she was debt-free. “Now I’d have nothing but myself to blame for not being able to accomplish something,” she explains. “Before, if I couldn’t add an aspect to my business or go on vacation, I could pin it on the fact that I was broke. Now I’d have to step it up. My grace period was reaching a close, and I thought that people were going to expect leaps and bounds from me.”

It’s a surprisingly common position to be in: You finally achieve the impossible (or at least what seemed impossible for a long time) and become debt-free, but instead of feeling financially empowered, you have a deer-in-the-headlights episode. You’re so accustomed to being in debt that you don’t quite know what to do without it.

RELATED: 3 Things You Should Do Before You Pay Off Your Student Loans

  • Lauren

    Betterment is a great solution for easy investing. It’s so simple – you just put in the timeline and the amount you want to save, then it automatically creates a diverse portfolio for you and rebalances it automatically. By having my money “locked up” in these goals, it curtails my impulse to use it for anything else, and it’s super fun to play with the calculators and watch myself getting closer to the goals.

  • Pam

    Time line investment funds su k! Investing really isn’t difficult. If you can get out of debt you can read a book or two and learn how to invest. My husband is in SMP 500 and An international fund. Then he also has a Roth IRA. It’s very simple to do.

  • Jenna

    This article came at a great time! My husband and I are on track to pay off our remaining student loans in the next 5 months, so I like the tip about starting to prepare in advance. While I’m not sure I can say that I’ll miss the debt (good riddance!), I can relate to the fact that having to make a decision about how to use the money could be overwhelming. Definitely a problem we’re willing to tackle!

  • Sov

    Once you’ve paid off your debts, you’ve got to start making your money work for you (no longer someone else)! I love this quote:

    “Here’s how I think of my money – as soldiers – I send them out to war
    every day. I want them to take prisoners and come home, so there’s more
    of them.” …Kevin O’Leary