#5 – Pay Down Your Debt
This is a great choice for those with student loans, a mortgage or any long-term borrowing under your belt. Even if you have a rock-bottom interest rate of just 4% on your home, over the life of your 30-year loan you will pay $1,200 for every $1,000 in principal! Paying down even a small amount of your loan early can drastically reduce what you’ll be paying down the road. And in the case of credit card debts and other short-term loans with higher rates, the payoff is even bigger and more immediate.
That’s to say nothing of the benefits you may reap through an increased credit score — and the added bonus of one less bill to pay each month.