First of all, congratulations. Paying a student loan is a daunting and herculean task that millions of people suffer with. Finally, the war has been won and you have emerged victorious! Now you may be wondering, what’s next? Here are some tips and advice on what you should do after you’re done paying off your student loan. Have fun without ringing up a round of dept whilst doing so!
Take a deep breath and give yourself a pat on the back – you have just accomplished something significant. So, what better time to treat yourself (within reason of course)? The reasons to make sure you take time to celebrate are two-fold, as celebrating not only allows you to relax and recollect yourself before attacking your next big financial goal, but it also has been proven to improve your self-control. This is because you’re less likely to get back into debt if you take the opportunity to treat yourself and be satisfied.
2. Focus on Paying Down Other Debt
Now that one financial burden is checked off, what’s the next thing on the list? For people who still have debt – whether it’s credit card debt, a car loan, or another type of high-interest debt – the answer is: pay it now, do not delay.
Most debt repayment methods encourage borrowers to take the money you were previously paying toward your student loans and put it toward any remaining debts you might have. That way, you can knock out this debt faster than you would if you directed those funds to another financial goal – diminishing your burdens one by one.
How to decide which remaining debts to pay off first if you have more than one? It’s usually a good idea to focus on the debt with the highest interest rate. Once you’ve eliminated that debt, you can move onto the next debt on your list, and so on, until you’ve knocked everything out.
3. Build Up Your Emergency Fund
There are some things you should do before you put any extra monthly income toward paying down remaining debts. If you have some debts remaining after you’ve paid off your student loan, don’t have any money in your savings, it’s probably better to focus on building up a small emergency fund.
If you have no savings, there’s nothing to protect you from going deeper into debt if something comes up. Injury, illness or emergency repairs are all things that can’t be predicted. Once you get to the point where you don’t have any debts left, you can really focus on amping up your emergency fund.
4. Save Up for a Big Goal
Saving up is a smart plan which your future self might thank you for doing.Whether it’s to buy a new house, for your future family or to start your own business, it’s a smart thing to do. In the long run, what matters most is having a goal and a purpose for your money. There’s no point in working hard to save your money if you don’t get to spend it on something worthwhile.