If you feel like you have your debt under control, then you’ve made great progress in setting yourself up for future financial success. Keep making good decisions by pursuing these five financial goals that can help make sure you’re prepared for whatever may come.
1. Bolster your emergency savings fund
Aim to save three to six months’ worth of living expenses to cover true emergencies, like a job loss or a major accident, as well as other unplanned expenses, such as household or car repairs. For easy access to these funds, choose a no-fee, interest-bearing savings account. If you are the primary breadwinner for your family, are self-employed or are concerned about job security, you may want to save even more so you’ve got an ample financial safety net.
2. Contribute even more to your retirement
The earlier you start saving for retirement, the less you may have to put away to hit your retirement savings goal, thanks to potential market gains and compounding interest. Once debt is out of the way, you may want to increase your contribution to your employer-sponsored retirement plan, at least enough to obtain the full available employer match. You can save even more in your retirement account or—if it’s right for you—invest in a Traditional or Roth Individual Retirement Account (IRA), personal annuity or health savings account (HSA).
3. Protect yourself and your loved ones
If you’ve been focused on paying off your debt, you may have settled for a smaller amount of life insurance than you actually need. Review your coverage to make sure you and your loved ones would be financially secure if something were to happen.
4. Stay on top of your credit score
Credit scores are based on a number of factors. The higher your credit score (which may range from 300 to 850), the more access you may have to lower interest rates and better loan terms. Review your credit report for free each year at AnnualCreditReport.com to check for any errors. Your financial institution or credit card issuer may offer complimentary access, so you can keep tabs on your credit score throughout the year.
5. Pursue other short- and long- term financial goals
Consider what you’d like your lifestyle to look like in the next year, within the next five years and over the next few decades. Dreaming of buying a home or starting a family? Maybe you aspire to help pay for a child’s college education. Perhaps you want to finally take that luxury vacation or try to retire without a mortgage payment.
Make a list of all the financial goals you’d like to accomplish, in the short term and the long term, so you can start taking action. Establish dedicated savings or investment accounts for each of your goals and make automatic contributions from your paycheck or checking account so saving for them remains a priority. Measure your progress to stay motivated. Enjoy the fact that having control over your debt allows you to pursue the goals that are most important to you.