Congratulations on paying off your debt! You have done something that many Americans have not managed to do yet. Now that you have some extra cash coming in every month, you ought to ensure that you put it into proper use. There is so much you can do, such as working on long-term saving goals.
1. Treat yourself
The first step is to appreciate your effort. Consider using your first month’s extra cash on doing something nice for yourself. You can pay for that getaway you have always wanted or buy the nice dress you saw at the store. The “treat” will obviously depend on the money you can afford to spare.
2. Prioritize your financial goals
After the celebratory indulge, consider the financial goals you want to tackle next. If you do not set your goals now, you might end up wasting the money. At this point it is advisable to work on building your assets.
3. Tackle another debt
Did you desert your student loan payment or credit card bill while you focused on paying the other debt? If this is the case, consider paying off these other debts first. Decide the next debt that should be repaid and redirect your cash towards clearing it.
4. Boost your emergency debt
If you used your emergency savings to pay off the debt, it is time to revamp your savings account. Determine how much you can send to your emergency fund. It is advisable to send at least a third of the extra money to your savings account.
5. Save up for your next major purchase
Ensure you do not take up credit for your next big purchase. Start saving up for the expenditure as soon as now. Whether it is a new car, a home renovation project or a vacation, paying for it early will come a long way.