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12 Things You Must Do Once Your Savings Reaches $25,000

Find your next steps after reaching a major financial milestone.

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Updated Nov. 5, 2024
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Saving $25,000 is a great accomplishment; especially if you're saving for financial goals like buying a home, retiring early, or taking that big vacation, you've always wanted to take.

However, once you reach that goal, there are certain things you should do to ensure that your money continues to work for you.

If you're getting close to your goal of saving $25,000 or have already reached it, check out some things you need to do next.

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Get a high-yield savings account

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A great thing to do when you begin your savings journey is to get a high-yield savings account that can help you earn additional interest on the money you're saving.

It's never too late to open a high-yield savings account if you haven't already. Interest rates are higher than they've been in years, so open one as soon as possible.

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Keep going

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You might think that you've reached your goals so you can quit saving now, but that $25,000 may only be the start of your savings goals.

Continue to build on the good money habits you've developed to save that money and add more to your savings to keep going. You'll be surprised at how easy your next goal will be to reach now that you know how to save that well.

Set new goals

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Goals can be great motivators to help you set certain objectives and reach milestones when saving money.

Consider resetting those goals when you reach a certain level to adjust your expectations or find new things you'll need the next $25,000 to cover.

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Fill up your emergency fund

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It's good to have goals for how you want to spend the money you've saved, but there could be an emergency bill that pops up, like a major home repair, medical bill, or car accident.

Top off your emergency fund to help cover any surprising costs without having to dip into the $25,000 you've saved for something else.

Try to get three to six months of expenses covered by your emergency fund and set some boundaries for yourself so you only use it for actual emergencies.

Pay off debts

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Setting goals for things like a home or an early retirement is a great use of the $25,000 you've saved.

But you don't want to apply for a mortgage with debt on your credit report or retire with lingering debt when you're on a fixed income if you don't have to.

Try to use some of the money you saved to pay off debts so you don't have extra costs — and extra interest — following you.

Boost your retirement contributions

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You can use the money you've saved to pay yourself now, but it's also important to pay your future self.

Add some money to your retirement accounts that can earn compounding returns until you're ready to retire.

You should also consider bumping up your employee contributions to take full advantage of any employee-matching funds your company may have.

Invest in your kids

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College is expensive. If you have extra money, consider putting it into a 529 account for your kids to give them a boost and avoid incurring as much debt when they go to school.

You may also receive some tax savings from your state for contributing to a 529 plan.

Consider a financial planner

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It can be tough to decide what to do with a large sum of money. Perhaps you want to invest but are unsure where to start. Or your goal was to find ways to save money, and you didn't have plans after that.

A financial planner is a good person to talk to when you need help figuring out what to do next and where to put your money.

It's a good idea to talk to a few planners first and find one who best fits your needs and understands your particular goals.

Invest in stocks

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Stocks can be volatile, but they can also earn you more money over time than a high-yield savings account or other investments.

Find a few individual stocks you might want to invest in or consider a basket of stocks, such as an index fund that tracks the stocks of a particular index like the S&P 500.

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Make a charitable contribution

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You may have saved money for yourself, but perhaps you also want to share some of it with others.

Charitable contributions are a good way to give back while also investing in your community's future. You may want to give it to a school or a program that helps those less fortunate.

Remember to keep track of your donations, as you may be eligible for tax benefits.

Splurge a little

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It can be hard work to save up $25,000 and make the sacrifices necessary to accumulate that cash.

While you may have a specific goal for all of it, you can also reward yourself with a little splurge, like some clothes you've had your eye on or going out to dinner a few more times than usual.

It's important, however, to keep your splurges in perspective and not go overboard with spending money now that you've saved it.

Do nothing

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It took a lot of hard work to save up that $25,000, so it's OK if you're not ready to turn around and spend it.

Instead, continue to follow the habits you've started so you keep saving money. Consider putting your money into an investment like an index fund.

You can earn extra money while you research different possibilities for what to do next.

Bottom line

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Saving $25,000 can be a big financial milestone, especially if you've struggled financially in the past.

It's good to continue your positive financial habits even after you've reached your goals. Set new goals to get your next $25,000.

Also, consider options like using the best rewards credit cards that you pay off each month while building up extra perks and points to help build on your financial success.

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