What to Do After You Finally Pay off Your Student Loan Debt
There is a high probability that your student loan has always commanded much of your attention when it comes to your personal finances. Therefore, doing away with it may feel a little bewildering. It means that you may be finding yourself with a significant amount of disposable income for the first time in your life.
So, what do you do next to ensure you achieve your other financial goals? Let us find out.
Celebrate the Moment
First things first. You have hit a significant milestone in your life worth celebrating. So, breathe that sigh of relief and celebrate the moment. Of course, we do not encourage you to spend money recklessly or get into more debt while celebrating the moment.
Instead, go out and have some fun with your friends and family. If you are not sure how to celebrate the moment, we have a few ideas that may excite you.
You can treat yourself to a nice dinner at your favorite restaurant or throw a party. If you are going out for dinner, tag along some of the important people in your life such as your closest friends, partner and other people who have supported you while struggling to pay down the debt.
You can also plan a road trip with your friends or purchase something you have always been putting off while paying down your student loan debt.
Reassess Your Monthly Budget
Once you have celebrated the moment, it is time to reassess your budget. Keep in mind that you always had some money going towards your student loan repayment and now it is time to redirect the funds to somewhere else.
If you still have other debts, this is the right time to redirect the funds to clear up other debts including payday loan or personal loan debt.
If you plan to set aside a portion of the extra funds towards some things you consider fun such as clothing or occasional road trips, decide how much that will be. While it is okay to direct a portion of the money to your wellbeing, avoid spending all the extra money on fun because it may be costly in the long run.
Stay Away from Debt
You have been working hard to get rid of your student loan debt- don’t get into other debts unless it is completely unavoidable. This is the right time to build your emergency fund so that you can always have some money to cover unexpected expenses when they arise.
Stop relying on your credit cards or other personal loans for your day-to-day finances. In fact, if you can use the extra funds to build a strong emergency fund, you can do away with your credit cards so that you are not tempted to swipe them.