You’re Debt Free Now What?!

Congratulations! You are debt free, now what?

Working your way through a mountain of debt can feel like an uphill battle. Once you finally get to the opposite side, it sure looks like an enormous relief. No kidding—being debt free is awesome!

But then it could actually begin to get stressful again.

Now that you just’re debt free, what do you have to do next? What should your recent focus be with regards to your funds? And what do you have to do with all of your newfound extra money?

Debt free now what?

Whether you used the debt snowball method to tackle your debt or took on debt consolidation, you worked hard to repay all of your debts.

Take a moment. How does it feel to inform yourself, “I’m debt free”?

Pretty good, right?

But sometimes, if you’ve been working so hard on a goal for thus long, it could actually also feel just a little scary to finally end up standing at the highest of the mountain.

Where do you go next?

Let’s start creating your financial roadmap.

Listed below are eight finance tricks to enable you answer the query, “No debt now what?”

1. Proceed making a budget

Essentially the most crucial thing to recollect if you’re finally debt free is to not surrender in your budget.

A number of times, people will likely be so enthusiastic about having some extra dough of their monthly money flow that they completely throw their budget out the window.

But doing this will land you in big trouble because and not using a budget, it’s all too easy to start out sliding back into debt.

The actual fact is, your monthly money flow has modified—and your budget must, too.

Because you’re done paying off your debt, you now must reorganize your budget to choose where all that extra money goes to go every month. This fashion, you may maintain of lifestyle of debt free living.

Forms of budgets

To readjust your budget, consider the 30-30-30-10 budget or the 70-20-10 budget. These are each percentage budgets which can be easy to follow if you ought to keep saving and include some spending in your life, as well.

But there are various varieties of budgets you may select, you only need to seek out one which is sensible for you.

2. Pad your emergency fund

When staring an intimidating debt balance within the face, some people focus 100% on just paying off their debt. Meanwhile, others also prioritize saving while they’re making debt payments.

Whichever path you selected, now that you could tell yourself, “I’m debt free,” it’s time to show your attention to your savings.

How much to save lots of

As you reorganize your budget, a superb place to start out is increasing your monthly contributions to your savings account. There’s no “right” monthly sum to place in your savings—how much it is best to save every month is different for everybody.

But a superb rule is to aim to save lots of six months of expenses in an emergency fund. It should prevent you from going back into debt again in case of an emergency; as an alternative of racking up bank card bills, you may tap into your emergency fund.

3. Check your insurance needs

Debt free now what? While padding your emergency fund is certainly a top priority when you’re debt free, don’t ignore other essential aspects of your overall financial health. Namely, insurance.

Forms of insurance

On the subject of insurance, there’s a complete boatload of options on the market. Life insurance is the preferred, but there are such a lot of other types to contemplate, too, like long-term disability insurance, long-term care insurance, and more.

When people give attention to paying off debt, insurance needs can often fall to the backburner.

Now could be your time to reevaluate. Think in regards to the benefits and drawbacks of life insurance and your other insurance needs. With freed-up money in your monthly budget, now could also be a superb time to start out looking for recent insurance policies.

4. Consider investing

Like saving, plenty of people halt investing while they’re focused on paying off debt. Or they abstain entirely.

When you’ve paid off your debts, that is an amazing time to ramp up your contributions again.

Learn how to invest

Haven’t began investing yet? And don’t know where to start?

Don’t worry! Investing is for everybody—and also you don’t need plenty of money to start. You possibly can begin with real estate, cryptocurrency, or index funds.

If you happen to feel that you just’re in way over your head and don’t know where to start out, try this guide for beginners.

5. Concentrate on your retirement accounts

So that you’re finally debt free, now what? Perhaps it looks like a good distance off, however it’s essential to start out occupied with your retirement now.

Once you were paying off all that debt, you could have slowed down your retirement contributions. That’s okay. But now that the debt is gone, it’s time to get back to prioritizing your retirement savings.

Getting began with retirement

Most experts recommend allocating 15% of your income every month to your retirement account. After all, the more you may contribute, the higher.

Don’t have a retirement account yet? It’s okay. While it’s all the time higher to start out saving up early, it’s never too late to start out saving for retirement.

Do your research on whether a 401(k) or an IRA is one of the best alternative for you. And in the event you work for yourself, there are different self-employed retirement plans, too.

6. Plan your financial future

Once you’re in debt, it could actually be completely all-encompassing. As you’re employed away in your monthly debt-crushing goals, it’s easy to let the opposite features of your financial health fall to the wayside.

But once you could have no debt, now what?

Make a brand new plan

That is the time to take into consideration your financial future intimately. Now that your debt is taken care of, you’re free to reevaluate your other financial goals.

For instance, possibly you ought to save up to purchase a house? Save up to start out a business? Or get able to buy a brand new vehicle soon?

Whatever your plans to your financial future, now’s the time to get clear in your next financial goal so you may provide you with a brand new plan and a brand new budget to make it occur.

7. Organize your financial life

Asking yourself, “debt free now what?” is a superb query about your financial future. But preparing to your financial future starts with organizing your financial life today.

Learn how to get your money so as

Start by setting your bills on auto-pay. Not only does this help simplify your funds, however it also helps make sure you won’t forget to pay your bills—and slide right back into bank card debt.

In any case, most Americans are living with credit card debt, but you haven’t got to be just like the majority!

You possibly can go further to automate your funds, too, like automating your retirement contributions and automating your emergency fund and savings accounts.

Enthusiastic about, “no debt now what?” can be an amazing opportunity to establish sinking funds and organize financial paperwork – all of the things that will have been neglected during your time of debt payoff.

8. Treat yourself now that you just are debt free

Say it loud and proud: “I’m debt free.” Being debt free is awesome, isn’t it?

You’re debt free, now what?

You’ve heard it’s time to pad your emergency fund. Up your retirement contributions. Start investing. Get organized. the drill now.

But don’t forget to treat yourself!

You spent plenty of time, sweat, and dedication to finally be done with debt—and also you should reward yourself. This doesn’t mean undoing all of your labor, in fact.

But an enormous a part of maintaining a healthy financial posture is knowing when to be disciplined and when to treat yourself.

So you could have no debt, now what?

Plan a celebration

Get out your mood board (and your financial planner!) and begin planning something fun. Have a celebration, or take yourself out to a five-star restaurant and order that expensive bottle of wine you’d normally avoid. Whatever you wish!

You earned it.

Being debt free is awesome!

Asking yourself, “So I’m debt free, now what?” doesn’t should be such a daunting query.

You’ve worked hard to overcome your goal of becoming debt free—and you probably did it! Now you may start working on and crushing your next financial goals.

Before you do, don’t forget to treat yourself along the best way. Then get back at it, constructing your healthy financial future. And now that you have gotten rid of your debt, try a few of our free financial courses to enable you succeed.