So you’ve paid off you car, congratulations! Paying off your car can feel so rewarding. It’s certainly an accomplishment worth celebrating over. If you’re wondering what to do after you pay off your car we’ve got you covered. Here’s a list of 14 things you can do with this extra money no longer going towards debt.
#1 – Allocate it towards other debt
Allocating your extra funds towards other debt is single handedly one of the most responsible things you can do financially.
Now that you don’t have to make monthly installments on your car, keep using this money to tackle other debt.
If you don’t know where to start, use the snowball effect. This is where you tackle your smallest debt and work towards your largest while paying the minimum on the rest of them.
Once you’re done paying that debt, increase the amount of money as you move on towards your next loan to pay it off quicker.
#2 – Build your emergency fund
If you don’t have an emergency fund of at least $1,000 by the time you’re done paying off your car, then we suggest tackling this goal before paying off other debt.
If you’re debt free however, work on building your hefty emergency fund worth 3-6 months of expenses for a rainy day.
Read: How To Create an Emergency Fund and Why It’s Important
#3 – Put your money in a high yielding savings account
In relations to building an emergency fund, open a high yielding or money market account to earn interest on your deposits.
You can set money aside on both accounts (high yielding and personal). One will earn you interest every month, while the other is simply there as liquid money you can have access to immediately.
Some high yielding banks include:
These banks are all FDIC insured which means you have zero risk when moving your money over to these banks. APY fluctuates from time to time on all banks. BMO Harris at one point had 1.95% APY and is now the lowest in this category with Affirm taking the lead at 1.30% APY at the time of this publication.
#4 – Take care of maintenance
A great way to use your freed up income once you’re paid off your car is towards maintenance.
Surely after several years of keeping up with your vehicle it might be due for some maintenance. Especially if there are a few things on your list you haven’t taken care of.
Invest in your paid off car so it lasts you many more years to come! Preventative maintenance will go a long way.
#5 – Consider other insurance options
Now that you’ve paid off your car, consider looking into other insurance options. If you can find better rates with another company to lower your monthly coverage, switch!
Get quotes from a few insurance companies and compare them to your current bill.
You can also see if your agent can lower your premium!
#6 – Rent your car out
Want to turn your car into a side hustling money-making machine?
Consider renting it out using Turo.
Turo is a car sharing marketplace where guests can book any car they want at the price of their choice. They are also a pioneer of the sharing economy and travel industry.
Turo is safe, with a supportive community of over 10 million strong and more than 350,000 vehicles listed. The average car owner makes over $500 a month and over $3000 for owners with 3+ vehicles!
The awesome thing about Turo is that they also have you covered up to $750K in liability insurance for peace of mind.
Whether it’s a truck to help on moving day, a luxurious Mercedes-Benz for a weekend getaway, or a classic VW bus for a picture perfect road trip, Turo lets you book cars that are part of a story, not a fleet.
Turo
#7 – Treat yourself
So you’ve paid off your car, we know it’s been a lot of work. Especially if you worked twice as hard to pay it off early.
Don’t be afraid to treat yourself in moderation. Perhaps you’ve been holding off on purchasing new clothes due to your frugal traits. Or, you’ve been delaying a trip to the beach with a special someone.
Take this time to appreciate the fine things in life with others. Treat yourself to the pleasant things money can bring to your life as well.
We find there’s nothing more satisfying than treating yourself to even the simplest of things. One example includes buying that new plant for your apartment after a long journey of working towards a financial goal.
Treat yourself, in moderation. You’ve earned it.
#8 – Raise Capital
Once you’ve cleared your debt and have a solid emergency fund, you can begin to raise capital for a startup or new business venture.
The great thing about paying off your car is that it allows you to play with that money once it’s been freed up. If you’ve always wanted to start your own business then this is a great way to set money aside for your startup.
Read: How To Start An Online Business In 2020
#9 – Sell your car for a more reliable vehicle
If your cars maintenance is costing you thousands of dollars to keep running, you might want to consider selling it.
Purchase a more reliable vehicle cash in order to avoid debt and making monthly payments. This strategy is going to save you financially on the long-run. Take it from someone who sold their BMW for a used but reliable Lexus.
#10 – Start your first investment in the stock market
One way people build wealth is by investing money in the stock market. The best time to do this is when you have your entire income at your disposal. This means when you’re completely debt free, have steady cash flow, and have a hefty emergency fund.
Investing in the stock market is an option you can take if you want to see your hard earned money begin to produce you more money.
While a high yielding savings account can earn you anywhere from 1-2% in interest, the stock market yields 7%-10% on average!
Purchasing stocks is easy, most people simply don’t have the knowledge on how to invest in the stock market. Thankfully, we have you covered!
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Read: How To Invest In The Stock Market (Step by Step)
#11 – Donate for a good cause
Use your extra money for the better good. Donating to a charity of your choice or to a cause of significant value is a great way to spend some money.
Remember that great things come in bulk to those who are generous.
#12 – Invest in your working environment
Investing in your working environment can spark creativity and motivation.
Whether you decide to build your home office or tidy up your workspace in the workplace, your environment has a lot of influence on your performance.
Give yourself that new exclusive place to work in at home. You deserve it.
Invest in new materials for your work office if you have to. Keep the creativity flowing all around your work environment.
#13 – Add new books to your library
Since our blog is primarily about investing in yourself, we decided to add this one to the list.
Use your extra cash to invest in adding books to your library, or even starting a library if you don’t have one. Knowledge is priceless so don’t be afraid to go all out on this one.
#14 – Keep setting financial goals for yourself
This won’t cost you a thing. One thing you should absolutely continue to do after you’ve paid off your car is to keep setting financial goals for yourself.
Financial goals are those big visions you have for your personal finances. They’re the way you plan to spend your money.
Set other goals and work towards accomplishing them. Just like how you set out your goal to pay off your car. Each achievement is a building block to bigger success.
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