What’s next on your path to financial success?! You can’t stop here. After settling in and allowing a few months for the moving expenses to subside and your budget to settle into this new flow – there are a few more building blocks for you to add to your financial foundation.
Ideally, you should have 3-6 months’ worth of living expenses set aside in an emergency fund. This is a savings account you build as quickly as you can, and then forget about. This money is off-limits.
Now that you no longer need to be saving every dime for your down payment, you should instead be saving every dime for your future. Max out your retirement contribution at work. If you are self-employed, meet with a financial advisor right away to put together a plan to help you save for retirement so you can live well in retirement. Whether you are an employee or entrepreneur, contributing to retirement has tax benefits too.
It seems far away but it takes a long time to save up for.
Address Other Debts
Really, the only good debt to have is your mortgage. You need a plan in place to start attacking the rest. Maybe you need to consolidate it, maybe you just need to pay a little extra each month. The truth is, once you have a plan in place you will feel much better. Plus, when you create a monthly budget that includes savings and debt reduction, you will automatically feel like you just gave yourself a raise. Trust me on this.
Speaking of! Take a minute to sit down and analyze your finances even deeper than the underwriter just did. Where are you wasting money? How much did you spend on UberEats last month? Is there something else you’d rather use those dollars for? The first step is actually the most important one, figuring out where your money is and where it’s going.
Not too far down the line, the investment you just made (homeownership) is going to start yielding you returns as well. In a few years you could use your home to consolidate more debt, or to enable you to move up to a bigger, better home or to generate income for you as an investment property. So when you combine those gains with the financial freedom you’ll achieve by taking the steps above, you’ll be really set!