What to do after paying off your debt
So you finally sent off your last payment for your debt. Incredible! But, now what?
Paying off debt can sometimes feel like an insurmountable task, to the point where we often don’t plan for what we will do once the debt is finally gone.
We have some good news: with your debt gone, you now have some extra money in your budget to start working towards other financial goals.
Read on to see what next steps you should take after paying off your debt.
Treat yourself. First thing’s first, you need to celebrate! This doesn’t need to be anything big, but you should do something to congratulate yourself for this huge accomplishment. Whether it’s cooking yourself an elaborate meal or purchasing a new bag you’ve been eyeing, do something fun for yourself.
Expand your emergency fund to six months’ expenses. If this year has taught us anything, it is that we never truly know what life will throw at us. Once you have paid off your debt, use the extra money in your budget to expand your emergency fund to have six months’ worth of necessary living expenses.
Start saving for other large goals. Whether you want to build your child’s college fund, plan on buying a new car within the next few years, or want to take an expensive vacation, you should start saving now. Reevaluate your budget and determine how much you can save per month. Saving for these goals now will help ensure you do not go back into debt later.
Increase your retirement contributions. Whether you are just starting out, or you have been saving for a while, now is the time to start increasing your contributions.
Start investing. This is not a necessity, but if you take a look at your budget and deem it possible, reach out to a fiduciary advisor and see if investing is right for you. This next step can help build and diversify your portfolio to ensure adequate funds for your retirement.
Taking these five next steps will help you continue down the path to financial success and stability. Members can give us a call at (504) 885-6871 to set up an appointment with one of our financial counselors to put together a comprehensive and personalized action plan.