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All Paid Off!

I really like your online worksheets. I was just wondering what you would suggest to do with the 15% used for debt reduction after the debt is gone?

Holly           

What a good question, and one I'm really going to enjoy answering.

  • If you aren't maximizing your savings, make sure you up that amount so that you're socking some money away for the future. Ditto your emergency fund.
  • Use some of the money to give your budget some wiggle-room: A little more in food, some more in entertainment, a little more in clothing and gifts. Don't go nuts. Just add a little more to each category.
  • Review your goals for the future and start planning ahead. If you're going to have to replace your car in the next two years, start saving some money toward that now… I call this "planned spending". If you're going to start a family, start planning financially for baby's arrival.

There are lots of things that require some financial foresight, and if you set aside some money ahead of time, then you won't go into debt again. Think new home, vacation, kids' education. If you can imagine it, you should be planning financially for it.
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