Don’t stop with just making your final payment. Here’s a few things you can focus on when you finally become debt free and are on your way to a financially free lifestyle…
1 – Serious About Your Emergency Fund:
in an ideal world, you would have been building an emergency fund while paying off debt. If so, up your contributions to get closer to your objective of having six months’ worth of spending in that account. If you haven’t already started saving for emergencies, you need to do so right away. Make as much of a monthly contribution as you can to that account. Why are emergency funds so crucial? It will assist you in preventing the use of credit cards to cover genuine financial emergencies, such as pricey auto repairs, the purchase of a new air conditioner, urgent medical expenses, or ongoing living expenses in the event of a job loss. Remember that you recently paid off your debt. Being surprised is the last thing you want to happen.
2- Investigate Your Retirement Options:
Although it’s never too late to start saving for retirement, the earlier the better. Check at your employer’s retirement savings options as well as other choices like a Roth IRA. Look into a SEP IRA, Simple IRA, or Individual 401(k) if you’re self-employed (k). Whatever method you use to save for retirement, the most important thing is to stick to it and don’t touch the money until you’re old enough to retire. Use the same discipline you used to pay off debt to saving for retirement. You already know you have it.
3 – Organize Your Financial Life:
There’s a high chance that you’re already at least somewhat organized if you were able to pay off all of your credit card debt, but there’s always room for improvement. Put as many accounts as you can on auto-pay to ensure that you never miss a payment or pay a bill late again. Establish a file system that works for you and organize all of your financial documentation. Refuse pre-approved credit card offers to reduce the temptation to overspend and to stop receiving obnoxious letters.
4 – Review Your Insurance Coverage:
When striving to pay off your debt, you may have managed with the bare minimum insurance coverage. Nevertheless, now that you are making more money each month, you might want to think about upgrading your insurance coverage. The time is now, for instance, if you’ve been meaning to buy life insurance but haven’t been able to. In order to secure your later years, if you’re getting close to middle age, consider long-term care insurance. Naturally, having adequate coverage for your health, teeth, and car is also essential.
5 – Start Saving for a Major Purchase:
It’s time to start realizing your dream of owning a home or a new car if part of the reason you wanted to get out of debt was to start saving for such a purchase. Create a savings account that is only used for your objective, and make regular contributions to it. You won’t believe how quickly the balance increases.