We should do nothing, absolutely nothing. Don’t get me wrong, it is an important point in our lives et al. It also means a big difference in terms of our cash flow, but we really should not wait till the day we are debt free to act.
Becoming debt free does not happen without us noticing it, so we should know months ahead of time when our last payment is due. Therefore, we should plan for the money that will be freed up when we don’t have to put that towards paying off our debt.
Here are some places to consider putting your money at work
- 401k/IRAs – Chances are that you haven’t maxed out your 401k or IRAs yet. You should consider doing this right away to maximum the tax-advantages with the extra money
- Emergency Fund – Some will argue that most people that are debt free already has an emergency fund in place but I believe most people don’t. I’m not talking about the money that we have in a safe stock. I’m talking about money that we can take out at anytime without thinking about the value of our account in case of emergencies.
- Automatic investments – Hopefully you were using automatic payments for your debt. Now that we don’t have this burden on us should be the time that we put the amount of money to grow for us! Low cost index funds are always recommended and having it automatically taken out of your income to be invested is even better.
- Upgrade Our Life Style – Maybe not the advice most articles will put down but this is the opportunity to really think about our goals and see if we should upgrade our life style a little bit. With proper planning we should be able to afford a better life style but remember that we also need to still keep our retirement in mind.
- Celebrate – We really need to plan our celebration so that we do not blow too much money. Just like a birthday party, the day that we become debt free should be marked down and celebrated like any other day!
Just like paying off our debt, it takes discipline to be able to put the extra cash to good use. Don’t waste years of effort by spending excessively. Be committed to become financially free!
Promote or Save This Article
If you like this article, please consider bookmarking or helping us promote it!
Print Post | Email Post | Del.icio.us | Stumble it! | Reddit |
Related Posts
- October 2007 – Best Articles of Personal Finance with MoneyNing
- Thank You for Confirming…
- Possibly Avoid Bankruptcy with Debt Consolidation
- Do Not Wait and Start Saving Immediately
- How to Stay Out of Debt
Subscribe! (and Get a Mini-Course with Free Registration)
Follow me on twitter! In addition, subscribe to grab free amazing content or take advantage of the newsletter to have content delivered to you. For starters, a 7-part mini course to help you spend less and be happy will be delivered to you when you subscribe!(Don't worry about spam, because we hate it as much as you do!)
Twitter
Facebook
Subscribe
{ 7 comments… read them below or add one }
The most important thing to do is to make sure you never get into debt again if at all possible.
I cannot understand why so many people are obsessed with having a gazillion credit cards and being up to their eyeballs in debt.
Don’t buy stuff if you haven’t got the money to pay for it. Focus your efforts on how you can increase your income instead.
I love the idea of a Debt Free Celebration Day!
Every big life event should be celebrated. I’d say becoming debt free is one of them! Therefore, a bottle of wine and a nice steak gets my vote.
-Raj
PersonallyFinanced.com
I would like to see a continuation of the topic
All of the above – particularly the emergency fund. It allows greater peace of mind.
I know this sounds cheesy, but I am going to call Dave Ramsey when I am debt free. He offers, simple yet life changing advise if you follow it.
The first thing my wife and I did was scream on Debt Free on the Dave Ramsey show which is heard by millions. This was our way of celebrating so I put that on top of my list. Now my wife and I are building a huge emergency fund. Great post. Debt Free Hispanic