7 Must-Do Things After You Finally Become Debt Free


The satisfaction of being Debt free is still a luxury for many, whereas some people are already enjoying the luxury. But, being debtless doesn’t give us the right to squander our hard-earned money on unnecessary minor satisfactions. So here are 7 Must-Do Things After You Finally Become Debt Free.

There is still room to improve. Have your bills on auto-pay so you don’t pay late or miss a payment. You should have your financial documents in order. Make sure you cut down on the junk mail and avoid the pre-screened credit card offers to avoid being tempted. You may not want to keep worrying about money, but if you stop paying attention to how you are spending your money then you may end up back in debt. Or you may prevent yourself from continuing to achieve your financial goals, such as buying a home or building a solid investment portfolio.

  • Saving for Retirement

The earlier you start putting money aside for retirement, the better. However, it’s never too late to start. At some point in your life, you also want to stop working and still have a cash flow that can support your daily needs and occasional leisure. The best thing about early retirement is that you still have the energy to do the things you love, such as traveling to different places. Hence, it would help if you planned out your retirement while still young and could perform at a level you can’t do when older. There are numerous retirement options you can choose to have a smooth retirement. If you are self-employed, look into retirement options such as individual 401(k), Simple IRA, or the SEP-IRA. For employed individuals check for the retirement options offered by your employer. You can arrange for automated paycheck deductions into the 401(k).

  • Emergency Fund

Building an emergency fund should be one of the first things that you should prioritize, especially after you have become debt-free. An emergency fund is a savings account specifically dedicated to preventing you from falling into debt in the event of an emergency. If you have been contributing to your emergency fund while paying your debt, you should increase the contribution. However, if you don’t have an emergency fund yet, you should establish one and make monthly deposits. The emergency fund will ensure you don’t use your credit card for just any financial emergency. Back when you are paying debt, you only have a small emergency fund that can last you a few months if you ever resign or get laid off from your job.

  • Credit Report

Knowing where you are in terms of your credit is due diligence that you should perform every year. Even if you think you’ve paid off all your debts, you should still conduct one to ensure that you didn’t miss any payments. If you find an unpaid debt, make sure to clear it as soon as possible. If you have cash on hand, don’t hesitate to spend it.

  • Build Your Wealth

There are essentially three things that you can do to make more money through passive income:

  • Start a business
  • Invest in real estate
  • Put your money in stocks

It would be helpful to hire a financial coach or get advice from people who already made it big in the industry where you want to build your wealth. Of course, this also entails that you develop your social network and get into certain circles.

  • Insurance Coverage

While working to be out of debt, you may have been surviving with the minimum insurance coverage. Now that you don’t have any debts, you can increase the amount you contribute towards the insurance coverage. You could also look into long-term care insurance if you are approaching middle age. Don’t forget to include vehicle, medical, and dental insurance.

  • Keep Your Credit Cards Open

If there is anything you could ever learn from using credit cards, it’s that they can rack up a lot of debt when used frequently. However, instead of cutting off these plastic cards, keep them open. This decision will help you maintain a healthy credit score, primarily if you have used the cards for several years. Furthermore, you should keep a decent amount on these credit cards to boost your credit score.

A person who has a good credit score has better chances of securing loans, mortgages, and other financial services. Your credit score may also affect how landlords, employers, and insurance companies will transact with you.


You must remember your mindset when you were working so hard to get out from under that burden. Keep up the best practices you already have in place.  Do not stop budgeting and utilizing those sinking funds.