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So, you’ve been diligently saving money for some time and have finally reached your goal for your emergency savings fund. Congratulations! Now what?
It may seem like you should be able to kick back and enjoy life now that you have any emergencies covered and money saved up but don’t get too comfortable just yet.
Emergency savings are important, but what should you do after you meet that goal? Emergencies can and mostly will happen, and you never know when you’ll need that money. So to have long-term financial stability, you need to think past emergencies to the rest of your financial life.
In this article, we’ll look at 24 things to do after you’ve built your emergency fund to ensure you use your savings wisely and don’t get yourself in a financial bind.
Whether you want to invest your money, save for retirement, pay off some debt, or just enjoy life, we have chosen these 24 tips because they will help you improve your financial health the most.
So sit back, relax, and get ready to learn how to keep an emergency fund for emergencies and grow your savings for the future.
1. Tackle High-Interest Debt
High-interest debt can quickly eat up your savings if you let it go unchecked, so pay it off as soon as possible.
By paying off these debts, you not only save money on interest payments but also free up more money to use toward other things.
2. Set Short-Term Goals
Now, you can start thinking about what you want to achieve in the next few months or years.
This could be something like purchasing a new car or maybe moving to a different neighborhood.
3. Save For a House
If owning a house is one of your long-term goals, now is a great time to start saving for it.
You can save for a down payment by setting aside a portion of your income each month or finding ways to increase your income, such as picking up a side hustle.
4. Big Event Fund
We all have big events like weddings or other major celebrations that we want to save up for.
Instead of scrambling to find the money when the time comes, start saving now for these events.
5. Invest In Yourself
Investing in yourself is one of the most important things you can do for your future.
This could mean taking classes or courses to improve your skills or even hiring a career coach to help you advance in your career. The bonus here is that you will increase your income, allowing you to save even more money every month.
6. Save For Retirement
Retirement may seem like a distant goal, but it’s never too early to start saving for it.
Now is the time to set up a retirement account or contribute to your employer’s 401(k) plan so your money has more time to grow. The more you save now, the less you will have to save when you are older. And who knows, you might be able to retire a little sooner than planned if you can commit to saving extra now.
7. Open a Health Savings Account
Unexpected medical expenses can quickly drain your emergency savings, so it’s important to have a separate health savings account.
An HSA allows you to save pre-tax money for medical expenses, which can save you hundreds or even thousands of dollars over time.
8. Buffer Your Budget
No one wants to live paycheck to paycheck, but with inflation so high, it can seem impossible to stay on budget.
You can start creating a buffer in your budget by adding a little to each category, like groceries or entertainment, so you have extra funds in case you need them.
9. Invest in Stocks
Once you have your emergency fund, it’s a good time to start investing in stocks, mutual funds, or EFTs.
These investments have the potential to yield higher returns than traditional savings accounts, but they also carry more risk.
10. College Fund
If you have kids, now is the time to start saving for their college education.
Consider opening a 529 plan, a tax-advantaged savings account specifically for education expenses.
11. Vacation Fund
Vacations can be expensive, but now that you have your emergencies covered, you can start saving for your dream vacation.
If you save money each month and watch it grow over time, you’ll be able to relax and enjoy your vacation without worrying about the cost.
12. Start a Business
Have you always dreamed of being your own boss? If so, now could be the perfect time to start saving for that goal.
Having money saved can help ease any financial stress that comes with starting a new business, such as start-up costs and other expenses.
13. Prepare for Estate Expenses
Even though no one wants to think about it, planning for end-of-life expenses is important, especially for your family.
By saving money specifically for these costs, you can know that your loved ones are not burdened with funeral expenses during an already difficult time.
14. Remodel Your House
Do you have a list of home improvement projects that you’ve put off doing because you were saving for emergencies?
Now could be the time to set aside money for renovations or upgrades to your home so it will have a higher resale value down the road.
15. Save For Tax Season
Tax season can be a stressful time for many, especially if you happen to owe money each year.
By saving money throughout the year, specifically for taxes, you can ensure that you have the money set aside ahead of time rather than scrambling at the last minute and possibly facing penalties or high interest rates.
The bonus here is if you don’t owe money, then all this savings can be put toward one of your other savings goals, boosting the amount you have.
16. Save For a Hobby or Passion Project
Do you have a hobby or passion project that you’ve always wanted to pursue but have never had the money to start?
Whether it’s photography, painting, or learning a new language, now is the perfect time to start setting aside money for it.
17. Pay Extra on Your Mortgage
If you start paying extra on your mortgage each month can save you thousands of dollars in interest over the life of your loan.
While putting an extra $20 or $100 towards your mortgage doesn’t sound like a lot, it adds up over time. And this compounding can knock years off the loan.
18. Pay Off Small Debts
We all know it’s important to pay off high-interest debts and larger debts first, but don’t forget about smaller miscellaneous debts.
You may not even realize how much they can amount to until you start paying them off.
19. Invest in Real Estate
Now that you have some extra money saved up for any emergencies, you can consider investing in real estate.
There are many options for investing in real estate, such as rental properties, house flipping, or REITs (Real Estate Investment Trusts), which can generate passive income.
20. Buy Investment Items
Have you ever considered investing in items that will appreciate over time, such as art, antiques, or rare collectibles?
This can be a fun and very profitable way to invest your money if you look for good deals and bargains and do your research before buying.
21. Grow Your Emergency Fund
Once you reach your goal, you may want to take another look at your emergency fund goals.
Things may have changed since you started it; maybe you have kids now, or maybe you or a family member has a chronic illness. Putting a little extra in the account could come in handy one day.
22. Donate to Your Favorite Charity
Giving back is important, but sometimes it is impossible.
Now that you feel you have the extra money to donate, you can choose your favorite charity and make a difference in someone’s life.
23. Consult a Pro
Now that you are ready to take the next step after meeting your emergency saving goals, it may be time to consult with a professional financial advisor.
They can help you create a comprehensive plan for investing, saving, and reaching future financial goals.
24. Have Some Fun!
Since you reached your emergency fund goals, you may want to take a break and enjoy yourself!
It’s important to reward yourself for all of your hard work and dedication, so go ahead, indulge in that fancy dinner, or take that trip you’ve been dreaming of.
Just make sure not to dip into your emergency fund while doing so.
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I have over 15 years experience in the financial services industry and 20 years investing in the stock market. I have both my undergrad and graduate degrees in Finance, and am FINRA Series 65 licensed and have a Certificate in Financial Planning.
Visit my About Me page to learn more about me and why I am your trusted personal finance expert.