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When you’re working toward paying off a car loan, student loan or mortgage, you’re hyper-focused on your goal. Often, you don’t think about what happens after the loan is repaid. Once you see those three little words, Paid in Full, it may feel like a giant weight has been lifted from your shoulders—but you might not know what to do next. Here are some tips to help you continue on a path of financial health and stay out of debt in the future.

Start Retirement Savings1

The sooner you start saving for retirement, the better off you’ll be. If your employer has an employer-sponsored retirement plan, enroll and arrange for automatic deductions from your paycheck to be deposited into your account. If you’ve been making modest contributions while paying your loan off, you can increase the percentage now. Aim to contribute at least as much as needed to fully take advantage of any employer match. Free money adds up!

If you don’t have access to an employer-sponsored retirement plan, consider an Individual Retirement Account (IRA). Traditional and Roth IRAs have different tax benefits, but both are appropriate for retirement savings. Other investment options include mutual funds, stocks and bonds. You can use a savings account to build toward a small nest egg to invest and grow over time.

Set Your Aim for Another Debt

Paying off a debt like a car loan or credit cards will free up a portion of your monthly budget. The first thing you should consider is putting the same payment amount you’ve already been making toward paying off other loans and credit card debt. Start with paying off the debt with the highest interest rate first. Paying off more than the minimum amount each month allows you to pay a greater percentage of the principal on your loan and even save on interest over the long term.

Create a Safety Net

Focus next on a short-term goal that’s essential to financial security: an emergency fund. Calculate the total of three to six months of your net income and save until you’ve met that goal. You can set up a Basic Savings account for your emergency fund—the focus is on access, not interest. Now if an adverse life event occurs—loss of job, accident or car repair—you won’t have to go back into debt to survive it.

Save for a Major Purchase

Now that you’ve successfully worked toward a financial goal and achieved success, roll that confidence into a new goal. Two common savings goals are a new car or the down payment on a house. Set up an automatic transfer from your checking account to a certificate or your savings account so monthly “payments” into savings are a no-brainer.

Use What You’ve Learned

Consider your journey to pay off your debt to be an invaluable lesson. Apply that mindset as you move forward. Often when people are repaying a loan, they feel deprived. Once the debt is repaid, it’s a natural reaction to want to spend freely. However, the last thing you want to do is wind up back in debt. Continue to use the self-control you’ve mastered and stay debt-free for the long haul. Focus instead on paying yourself first to increase savings, while treating yourself when appropriate.


1Nondeposit investment and insurance products are offered through Navy Federal Financial Group, LLC (NFFG) and through its subsidiary, Navy Federal Brokerage Services, LLC (NFBS), a member of FINRA/SIPC and an SEC registered investment advisory firm. Brokerage and advisory products are offered through NFBS. These products are not NCUA/NCUSIF or otherwise federally insured, are not guaranteed or obligations of the credit union, are not offered, recommended, sanctioned, or encouraged by the federal government, and may involve investment risk, including possible loss of principal. 1-877-221-8108.

This article is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.