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What Happens When You Pay Off All Your Debt

Task: Assigning Our Individual Value To Our Income

I stumbled on the psychology of personal finance a while back and there is a ton of info on it. One particular topic that stood out is setting personal financial goals and how we feel when we meet them.

In particular, let’s say you have a mortgage and student loan debt. You decide that fuck it, you’re gonna pay both off because you want to be debt free. You devise a plan, create a spreadsheet or whatever and you start cutting back on some expenses, saving a little better and maybe even pick up a few shifts here and there.

After a few short years you are done and debt free.

This is where it gets interesting. You would think that you would feel a sense of accomplishment and that your life would have more direction.

Fuck no.

And that’s what this post is about. It’s more common that after achieving such a goal you are left a bit perplexed, lost and without a good sense of direction.

Think about how you’ve lived your life the past say, 2.5 years. You made your own food to save on dining out. You sacrificed a few entertainment categories in order to contribute more towards paying off debt.

Perhaps you also worked one extra weekend shift a month and stopped putting money in your savings account.

You slowly and quite effectively recircuited your brain to assign value to your income only in the context that it can pay down debt.

You likely checked your debt balance routinely, discussed it with your significant other and were less focused on upgrading your car or home etc.

Suddenly you are debt free.

Awesome, immediate but short-lived gratification. When you look at the balance being zero you think to yourself, so now what? During your subsequent work shifts you will say to yourself, ‘Wtf, this is it? I’m gonna be doing this for the next 20+ years?’

Your money had a specific purpose while going towards your debt but now it has no owner-assigned purpose. What will you revert to? We are social creatures so we will revert to whatever society feeds into our minds. Anyone reading this site knows the fucked up value we assign money in this society.

Soon a few thoughts creep in, maybe it’s a good time to sell the house and upgrade. You and your partner could use a new car or maybe this is the time to buy that vacation home in that little ski town.

What is the value of money, specifically to you?

To some it’s a means to an end, get the money to get whatever I want to buy with it. To others it’s just something they were taught to value and hoard. To some it’s just something that keeps coming in as long as they are doing well in their business.

The average person will soon begin building up their debt even though they may have promised themselves they never would. They will get an auto loan, they will maybe get a business loan and even more likely a mortgage.

My mom doesn’t know shit about the stuff I write about here and I don’t talk shop with her much when it comes to personal finances, she’s never been into that stuff.

But the other day I emailed her and told her that I’m sort of bored with work. I enjoy seeing patients and having the occasional complicated medical cases that I can work up. But the work has become mundane. Completing a shift feels like crawling through thick mud that’s up to my waist.

Her reply was epic, “Well, you said you paid off all your debt and¬†eventually¬†work, any work, becomes boring after some time. Now your job just creates income and nothing else. And because the income has no immediate value to you, you don’t appreciate it as much or it doesn’t have any value to you. That’s why people take on more debt, buying a house, an expensive car, traveling more. So that’s what you should do, trust me, go buy a nice fancy house, lease yourself a good doctor-car and you’ll have a legitimate reason to continue working.”

Thanks mom! So what’s the (real) solution?

I mean shit, I’m not about to go and accumulate more debt, though in the back of mind I always fear that I will.

Perhaps the solution is to view money/income differently; not just as something that we can barter with in return for tangible goods/experiences.

That’s what I’ve tried to do on this site, to think about all the different values which I can assign my net worth and income.

My current interpretation is that it can buy me freedom and it can make me a less fearful person. In turn that freedom will help me assume a position where I can help others. I’m not very creative so maybe I’ll be able to help those around me by making $100 bills rain on their heads (my dream, go get your own).

I don’t see any other way but following this order: first fixing my definition/appreciation of money. Then using it to create my financial freedom. Then helping my family and friends around me not only gain the same value but also help them achieve a similar-ish goal. And if I still have some fight in me then I will help someone I don’t even know and so on.

It may sound silly but right now what I’m doing is tipping-more-thing. I buy a cup of coffee for $1.85 then I leave a $5 tip. My thought process here is that if I have enough money to spend on something elective which is served to me by someone who likely isn’t in my situation then perhaps I can help them in some way. Of course if they only view money as a way to barter for goods/experiences then that $5 tip won’t go very far.

5 replies on “What Happens When You Pay Off All Your Debt”

Does Hedonic adaptation work the other way too… say you keep leaving 5 dollar tips and one day you leave less and the barista will hate you and you will hate yourself? I dont know the answer – but everytime we set a certain standard/expectation it appears that it quickly becomes baseline.
Thanks for writing this post Dr. Mo… Very timely… I am almost out off all debt (just a bit of mortgage left) and am already thinking “man, what next”? Over the last few weeks our spending on stuff that we “need” suddenly went up… opps! I guess this is how life is… constant ups and downs… and occasional forceful recalibration.

I have a solution for both of you, MM can start paying towards Bahar’s student loan debt, all will be happy.

I’ve posted my monthly expenses so you guys know that I go through the same things as MM. I will go through times when I will all of a sudden feel that all expenses are necessary.

The ups and downs are great, they actually help keep you in check. Sure, a little depakote or lithium may level off your expense/spending cycles.

Instead when you’re not spending much you realize what a privilege it is to have the luxury to spend on certain elective categories. Then when you start making it rain in da’ club you realize how valuable that money is and how quickly it can disappear.

I somehow missed this post. Your mom’s email is pure gold. Maybe she knows something we don’t? Maybe you should start a speaking circuit at different hospitals talking shop about “Finance 101 by Dr Mo.” You’d have some bastards eating out of the palm of your hand. Opening your own urgent care would be a good challenge for you but do you want that? I think we already know you could create a thriving practice given your efficiency etc. My gut tells me you should do something different, just my 2 cents

Totally agree, even though running my own urgent care would be a great opportunity I don’t know if that’s what I want to do. Like you said, maybe just do something different for a while. Starting an urgent care is always an opportunity and the more experience I get outside of medicine the better I’ll do at it. Thanks for the words of encouragement.

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