- So you're close to paying off debt,
or thinking about what you should do
immediately after becoming debt free.
Well, I'm a weirdo.
So the planning started for me years before
paying off all of my $82,000 in debt.
But there were a few things that I didn't even think about.
So I wanted to make this video to give you
a little checklist,
and give you examples of what I did for each one.
The last thing that I want you to do is to become debt free,
then realize that you should have done these things
that I'm going to tell you about.
If you were debt free,
then let me know in the comments down below,
and if you aren't to that point yet,
then let me know in the comments down below
how much longer you have until you're finally debt free.
Hey, I'm Jared from Debt Free Blueprint,
where I show intelligent people like you
how to get out of debt,
and create freedom through your finances
using the Debt Free Blueprint.
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First, and foremost, you need to reward yourself.
How you do this is going to be completely up to you.
Now, this sounds easy,
but it can be very difficult at first.
You just finished spending many, many months,
or even years optimizing your spending to cut back
so that you could get your debts completely paid off,
and now it's time to actually enjoy it.
It can be a little bit tough to break that mindset
that you've created,
so that you can now enjoy the benefits
of all that hard work that you put in
for all of those years.
I'm more of a minimalist,
so buying a bunch of things didn't really make sense for me
when it came to rewarding myself.
I value my health,
and my physical fitness a lot,
so I bought this $400 watch.
That kind of feeds that data nerd in me,
and gives me all these stats on my health.
I know it's not an Apple Watch,
and you might think a little bit less of me,
but I needed something a little bit more rugged.
So I was like, that Apple Watch
will not work for someone like me.
I also value experiences,
so since I didn't allow myself a vacation
for those four years that I was paying off all my debt,
I planned a trip to the Boundary Waters
with two of my buddies where we kind of roughed it
for a whole week.
Now most people would not call it a vacation,
because it's really, really physically demanding,
but I'm kind of known to be a little bit sick in the head
with intentionally putting myself through pain like that.
So I was like, sign me up.
Now, I didn't have all of the gear to go on that trip,
so I needed to spend a little bit of money
to kind of get all the gear that I needed
so that I could use on that trip,
and future trips as well.
Don't be afraid to spend a little bit of money,
since you accomplished something that most people
aren't willing to do.
If you are in the process of paying off your debt,
then start dreaming now,
because you're going to be there sooner than you think.
Next, I want you to run a free credit report for yourself.
You should honestly be doing this every single year anyways,
but it's even more important once your debts
are completely paid off.
If you live in the US then you are allowed
a free credit report every single year,
so you should always take advantage of it.
A credit report is going to list out all of the debts
that you've had over the past seven to 10 years.
Take a few minutes to review everything
just to be sure that all of your debts
are actually paid off.
You don't want to accidentally miss one,
then have it come back to bite you in the butt.
After I thought that I had paid off all of my debts.
I received a bill for $1,000.
It was a debt that I completely forgot about.
Luckily I had the cash on hand
so that I could have paid off right away,
but it was still a little bit annoying.
Learn from my mistakes,
and pull a credit report.
Like I said, I would go as far
as to do this every single year
just to make sure that something funky
isn't going on with your finances,
because identity theft does happen,
so it's a good way to kind of make sure
that someone isn't out there using your identity
to purchase all kinds of things.
If you're looking for a way to have your credit monitored
on a regular basis, then I highly recommend LifeLock,
check out the links down below
if you want to sign up for LifeLock,
and I'll also throw some other links down there for you
to run a free credit report.
How about we stay out of that debt cycle
by taking care of one of the expenses that can easily
put you back into the poor house,
and that of course is a car.
If it can break down, then it obviously will,
especially when it comes to your car.
You should start setting aside some money
for your next car purchase.
I hate spending money on anything
that has to do with automobiles,
but it's one of those necessary evils
that we all just have to deal with.
Even if your car is in good, or great shape,
start putting money aside for when it either needs repairs,
or when you need a whole new one.
I personally keep a chunk of this money
in a high interest savings account like Ally.
The way that I did it once I paid off all of my debts,
is that I put a larger chunk of money
into that car fund just to kind of get it started,
and get the ball rolling.
After that, I threw an extra $200 to $500 per month
into that fund until I got it up to an amount
that I was going to spend on my next car purchase,
plus a little bit of extra money for the minor repairs
on my current car.
I can now say something
that I honestly never thought that I'd be able to say,
and that is that I have more than enough money on hand
to pay cash for my next car purchase.
So what I do with the extra money
that I was putting towards my car fund,
since it's now up to the
levels that I want it to be,
is I redirect that money more towards investments,
so I can start building more wealth for myself,
and my future.
I suggest getting into the mindset of
always having a car payment,
even if you don't,
that way you're always putting money aside
for that future bill that's always gonna come around.
Just like with your car, accidents are going to happen.
Since you've come such a long way
with paying off your debts,
you need to start protecting yourself
from those future financial disasters.
Think of this in terms of strengthening the walls
of this financial castle
that you've been building over these years.
You can choose to put three, six,
or even nine months worth of expenses into an emergency
fund it for yourself.
It's totally up to you.
Now, I personally prefer a six to nine month emergency fund,
because it just makes me feel a little bit more safe,
and it helps me sleep at night
when my dog is sleeping right next to me,
and I'm afraid someone's going to break in.
I just think about that emergency fund,
and it makes me feel a lot more safe,
so I'm like, eh, it's okay if someone breaks in.
What?
if you plan on quitting your job to start your own business
at some point,
then I'd having at least 12 months worth of expenses on hand
to kind of get the business go into where it's profitable.
We can talk more about that later though.
Just like the $1,000 emergency fund that you helped
throughout the process of paying off all of your debts,
you will treat this money the exact same way,
put it into a safe high interest savings account like Ally.
Now if you're feeling a little bit more risky,
then put a portion of it into a safe place like Ally,
and another portion of it into something
a little bit more risky,
like an investment in the stock markets,
through a taxable investment account.
The investing platforms that I prefer,
our M1 Finance mainly, Betterment,
and then you can even open up a taxable investment account
with Vanguard or Fidelity.
Just a disclaimer,
I would not suggest putting the majority
of your six to nine month emergency fund into investments,
but now that you are debt free,
you're kind of in a position to take a little bit more risk
with your money for the potential of a higher reward.
The debt is finally paid off,
so now it's time to start building wealth.
Investing in building wealth for most people
should be looked at as a longterm play.
If you have the extra money to play around with,
and go ahead, and play around in the stock market
if that's what you want to do.
Before you do that though,
I suggest getting your retirement investments on track.
Now this can be done through your 401k contributions,
as well as Maxine out your IRA.
The current amount that you can contribute to your IRA
every single year is $6,000.
I made a video on investing in your IRA
that I think will be super helpful to you.
I will link that up in the description.
The strategy that I've taken since paying off my debt
is to Max out my 401k through work,
which is $18,500 per year, max out my IRA,
which is $6,000 per year, and to max out my HSA,
which I'm basically using as another investment vehicle
to take advantage of the tax free money
that I'm offered through that.
With the leftover money I have beyond that,
I am investing in a lot of other places
that we can talk about in future videos.
Let me know in the comments down below
if you want to hear about those different investments.
Also, if you have any questions about anything
that I mentioned,
and then leave a comment down below,
and I'll answer them just for you.
If you have anything that you think
that I should add to this list then let me know.
Make sure to smash up thumbs up button,
and pick up your free copy of the Debt Free Prep Workbook.
Subscribe, hit that notification bell,
and I'll see you in the next one, friends, adios.