Congratulations, you’ve finally accomplished the goal of paying off your debt. That weight off your shoulders has disappeared and you now have the freedom to do more of what you want in life.
With your monthly payments gone, you’ll have a little more spare cash sitting around. Here are some ideas to help you get started on what the next part of your financial future holds.
COME UP WITH A NEW GOAL
Having a goal will prevent your spending from spiraling out of control and landing you back in debt. Some ideas of a new goal could be saving up for a down payment on a house, a new car, or that dream vacation. Check out our post all about setting financial goals.
DON'T CANCEL YOUR CARDS
Cancelling your cards can affect the length of your accounts, which is a major factor of your overall credit score. Continue using your credit cards and pay in full every month. Just remember to make responsible purchases that you will be able to pay off quickly.
START AN EMERGENCY SAVINGS
Emergencies have a way of happening at the worst possible time, such as finally getting rid of your debt. Most experts recommend having anywhere from three to eight months’ worth of living expenses saved. The amount you need depends greatly on your personal situation. If you are single and living in an apartment, you may get away with just having three months. If you’re married with a couple of kids and a mortgage, you’ll need more.
SAVE FOR RETIREMENT
According to TIME, almost a third of Americans have saved nothing for retirement. If you find yourself in this camp, NOW is the time to start saving. Below, you'll find the maximum contribution that you can make to each type of retirement account.
Type of Account Maximum Contribution 2017 Tax Year
IRA Contribution (under 50) $5,500
IRA Contribution (over 50) $6,500
401(k), 403(b), 457(b) (under 50) $18,000
401(k), 403(b), 457(b) (over 50) $24,000