Credit Card Debt is GONE! What do I do now?

[ilovemygirl]

So I just officially paid off my credit card debt. I don't know what I was expecting but it felt kind of .. anticlimactic. Did anyone else feel that way?

I also don't know what to do next. I never really thought about what I would do once all the debt was paid off. I'm going to keep working extra to pump up our savings but should I be putting that in some kind of short term investment? I've never had the reason to research investing before. Right now, it's about 3k that we have. I expect to add about 1k per month for as long as I can keep up working all the time. At what amount did you/would you start putting money somewhere other than a savings account?

[Juvysen]

well, if you listen to dave ramsey, you should snowball that onto any other debt you have (besides mortgage) - i.e. car loans, etc.  Once those are paid off (or if you don't have them to begin with) then you should save up 6 months of living expenses.  After you've done that, you should move on to investing...

eta... CONGRATS on paying it off, though!!!

[escher]

Congratulations on paying off your debt! If it were me, I would probably work on increasing my emergency fund, maybe keeping it in an online savings account (I use HSBC) to get a better interest rate. My favorite financial blog, Get Rich Slowly, talks about this kind of thing fairly regularly, so you could search on there for more ideas. Good luck!

[jimblejamble]

Dance like this!

[melissel]

Originally Posted by JessicaRenee 

Dance like this!

I totally agree! It does feel anticlimactic at first, but as some time passes and it really sinks in, you'll start to really GET it. You're done!!! Congratulations! You should be very proud of yourself

ETA: Oh, and I agree about your next step being the building of your emergency fund--a minimum of 6 months of expenses in the bank. Good luck!

[Turquesa]

Funny somebody should mention Ramsey.  Just today on his show, he had different couples tell their success story and then scream, "WE'RE DEBT-FREE!!" 

I'm sorry to sound like your mother, Ilovemygirl, but one day, you'll appreciate what a big deal it is.  It may be when you send your girl to Girl Scout Camp or college, or when you find you have money for another goal without impending debts.  Congratulations! 

[TiredX2]

Originally Posted by JessicaRenee 

Dance like this!

Definately this!!!

I don't know your financial situation.  Do you have other debts?  Do you expect any large expenses in the early to mid-term future?  Are you saving for retirement?

Personally, if you are not putting *anything* into retirement, I would start there first.  At least to get any match that is offered.  Then I would put money into an emergency fund until you have the amount of months worth you want saved up.  I don't know how quickly that will be for you at 1k monthly, but if it will be fairly quick I would consider putting even more than the minimum into retirement.

[Maluhia]

I'd do 1. six months emergency fund 2. any other debt (mortgage, etc.) and then 3. save up for down-payment on a house (if that is a goal of yours) and 4. regularly invest in retirement, a 529 or UGMA for your kids and Life Insurance. 

[goinggreengirl]

CONGRATULATIONS!!!

It is very anticlimatic. When DH and I paid off our second vehicle, I felt like the bank should have given us a bunch of balloons and played music or something. It really hit home for us when, a month after it was paid off, we hit the worst financial time of our lives and didn't have to worry about losing a vehicle because of it.

[corrie43]

I know how you feel. When we got our debt paid off it was like ok now onto the next big hurdle, saving a big e fund, start sinking funds ect ect. We still aren't comfortable yet. We do have some savings, but not enough for me to relax. We were able to take a debt free vacation to disney though and that felt SOOOOO good. That was pretty much our reward for paying off all the credit cards. Now we have a sinking fund for vacations. Hopefully we can take one every other year or so. it had been 10 years we ad been waiting to go on our first real vacation, so it was very much appreciated and enjoyed. Even more knowing we were not charging it.

I would start building the e fund, start your sinking funds, and TAKE A VACATION!!!