When you’re focused on the goal of getting out of debt, it’s easy to get caught up in the process and not think beyond achieving that goal. But the fact is, if you are consistent and committed to paying off your debt, it will happen. So what do you do then? If you don’t have a plan for what to do with your money once your debt is paid off, it can be all too easy to start a cycle of over-spending that will leave you with little to show for it. Sure, you can relax and have a little fun, but your financial journey is just beginning. Here are several things you need to do once you are debt free.     

Get Serious About Your Emergency Fund

Ideally, you will have been contributing to an emergency fund as you were working to pay off debt. If that’s the case, increase your contributions so you can reach your goal of having six months of expenses in that account sooner. If you haven’t yet started to save for emergencies, you must do it now and deposit as much as you can into that account every month. Why is emergency savings so important? It will help you avoid using credit cards to pay for a true financial emergency, such as major vehicle repairs, a new air conditioner, emergency medical bills, or everyday expenses in case of job loss. Remember, you just got out of debt. The last thing you want to do is get blindsided by an emergency and get right back into debt by having to use a credit card to pay for it.

Investigate Your Retirement Options

The sooner you start saving for retirement the better, but it’s never too late. Look into the retirement savings options offered by your employer along with additional options such as a Roth IRA. If you’re self-employed, look into a SEP IRA, Simple IRA or Individual 401(k). No matter what how you choose to save for retirement, the important thing is to be consistent with your contributions and leave the money alone until you reach retirement age. You already know you have the discipline to pay off debt; apply that same discipline toward saving for your retirement.

Organize Your Financial Life

If you’ve managed to pay off all your credit card debt, there’s a good chance you’re already at least somewhat organized, but there’s always room for improvement. Set up as many bills as possible for auto-pay, so you never again have to risk paying late or missing a payment. Get all your financial documents in order and devise a filing system that works for you. Opt out of pre-screened credit card offers to minimize the temptation to overspend, not to mention cut down on annoying junk mail.

Review Your Insurance Coverage

You may have been getting by with bare minimum insurance coverage while working to become debt free, but now that you have more money every month, you may want to consider increasing your insurance coverage. For example, if you’ve been meaning to get life insurance but couldn’t afford it, now is the time. If you’re approaching middle age, look into long-term care insurance to add security to your senior years. Of course medical, dental and vehicle insurance coverage are all necessities, too.

Start Saving for a Major Purchase

If part of the motivation for getting out of debt was so you could start saving for a major purchase, such as a home or a new vehicle, it’s time to start making that dream a reality. Establish a savings plan solely dedicated to your goal and contribute to it regularly. You’ll be surprised by how quickly the balance grows.