You did it. Congratulations on your refinance! Before you get acclimated to a lower monthly payment, why not leverage your savings by making another wise decision? Below are a few options for putting your new-found extra cash to good use.
- Establish or enhance your emergency cash reserve.
If your income is interrupted or if an opportunity or need arises, your emergency fund lets you avoid interest costs from borrowing or tax consequences from cashing out investments,
2. Pay down non-tax deductible/high rate debt.
Paying oof high rate credit cards or other debts will free up your cash flow so you can invest it for growth.
3. Invest, Invest, invest. Max out your 401K Contribution.
Even a partial match from your employer yields an amazing, instant rate of return. Got kids? Startup a college plan. Tuition costs are rising faster than inflation. Invest now to help beat the trend.
4. Make sure you are protected.
Do you have sufficient life, disability, and property insurance? Doing everything else right matters little if tragedy strikes and you lose it all due to lack of coverage. Why not set up a review with your insurance pro today? Call me if you need a referral to someone who can help.
5. Pay off your loan faster. This is not always the best thing to do with your cash (see number 1,2,3, and 4), but for some, peace of mind has the best of return.