Many folks work really hard in order to pay off their debt, including credit card debt, car loans, student loans, and their mortgage. This is an excellent idea, although, sometimes once our debt has been paid off, we get careless with our money. We suddenly have all this extra money at our disposal and it can be tempting to splurge.
Instead of blowing money that you no longer need to use to pay off debt, consider saving that money instead. For example, if you were making $350 payments towards your car loan and then you finally paid it off, why not allocate the $350 towards contributing to your retirement savings and other investment accounts to save for your short and long term goals?
The easiest way to do this is to set up a preauthorized contribution from your bank account to go directly into your investment or savings account. Then you don’t even have to think about it and there’s no chance you will forget.
Because you were already used to living without that $350 payment anyway, you wont even feel the pinch if you direct that same amount towards your savings now. In fact, you will be doing yourself a gigantic favor by doing this. This extra money can be saved for any number of goals and you will be surprised at how quickly you will be able to reach your savings goals if you implement this strategy.
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