- 1 Woohoo, your new outstanding credit card balance is $0.00!
- 2 What To Do First
Woohoo, your new outstanding credit card balance is $0.00!
You did it! You cracked the code. Exited the Matrix. Killed the monster. Somehow, against all odds, you figured out how to get out of debt fast on your own.
The credit card is paid off and now you have bucket loads of disposable income. But what, if anything should you do with your new found wealth? It can be tempting to rack the debt back on up, but you know you don’t need that new flat screen.
What To Do First
First order of business is to cut that card up, but do not close the account, that way your credit score will be able to build itself back up, after all, there may be a time in your life when you need to access credit.
What’s more, if you are not already a homeowner then you need to keep your credit score at an acceptable level in order to secure a mortgage. So with all that in mind, here are some tips to help you manage those extra bucks and enjoy your financial freedom!
Open a savings account.
A savings account was the credit card of the last generation and now that you are debt free, why not pretend you don’t have the money free and just save it, that way you will have the capital you need for your next purchase or emergency. Remember that small amounts will grow if left in the savings account long enough, $1 a week is still saving!
CD’s, stock or bonds are a good way to see a return on your money and a wise investment for the future. What’s more, they typically offer higher rates of return versus saving accounts. Cryptocurrency is also a big thing right now. It is basically internet money and there are a lot of calls for it to be traded nowadays.
Open up an educational/college fund
College, as we all know, is a money pit, so why not make the most of it now and start saving for the kid’s education. If you are on a low income then you may want to look into a 529 Plan education savings plan operated by a state or educational institution which helps you save for educational costs.
Start a family trust fund
You don’t have to live at Downton Abbey to have a little financial security. In fact, many families of modest means set aside funds for their children to help them start their adult lives. You don’t have to save huge amounts $5 a week for 21 years is a little over $5,000 and that is not counting any interest gained.
Save for retirement
If you believe what the statisticians are saying then when you make it to retirement, Social Security will be depleted. Go out and get the best plan you can and be aggressive with the investment. The average minimum monthly credit card bill payment is $300 think if you saved that once a month for 30 years then you would have $108,000! Make an appointment to see a retirement planner and research the different retirement saving options available to you online.
Consider a charitable donation
Now that you are no longer feeling the pinch and the stress of those card payments, why not share some of that happiness with others and make a donation to a charity of your choice. If you want, you could also stay local and perhaps sponsor a child to play sports or make a donation to your local school’s art department. If you are a kind person who cares about kids, why not pay for a couple of children’s lunches for the year and fill a hungry tummy!
Go on a vacation!
You just go out of debt so why not celebrate with a trip. You have earned it and you really knuckled down to get that debt cleared. Many cruises are less than $500 these days, so you could easily take a little trip with that extra cash!
Buy into a small business
Now you may be thinking, ‘that’s crazy, how can I invest in a business with less than $500?” The truth is that there are many franchises and businesses that look for small or group investors to start up or give their businesses a cash injection. There are trade shows throughout the country that offers franchise shares and other such offers. But, be careful to watch out for scams and never do business like this online for the scammers are getting craftier and the internet is a hot bed for rip off artists waiting to take what’s yours.
Work on your other debts (if you have them)
Presuming you have other debts now would be the time to pay those down. If you can make a lump sum, many companies may be willing to negotiate a payoff amount that is less than what you owe. Large cash payments are attractive to these companies as it means they can clear the debt quicker than they hoped for initially.
Image credit: Giphy.com