What to Do with Proceeds from Your House Sale

Selling your house can be really exciting, especially if you’re set to make some money from it.  While many people simply use their profits to climb the property ladder, investing your newfound fortune in real estate isn’t your only option.  Some homeowners find owning a house to be a lot more work (and money!) than they ever dreamed of and would prefer to go back to renting.  So what else can you do with your house sale proceeds to make that money work for you?

Pay off debt

One of the best things to do with your money is to use it to pay off debt. It doesn’t matter what kind of debt it is, it’s just a good idea to get rid of it. Take care of credit card balances, car loans, student loans, or any other types of debt you may have accumulated. Over the long run you’ll find you have more money monthly to spend and aren’t racking up finance charges along the way. Plus, being free of all those financial obligations will feel really, really amazing.

Emergency Fund

If you don’t have an Emergency Fund outside of your regular savings account, now is a great time to get one going. Experts suggest having 3-6 months of income set aside in case you lose your job. Emergency funds can keep you up and running while you search for another job, have some sort of medical emergency (or any other type of emergency that comes up) or it can make up the difference if you have to take a lower paying job for a while.

Shore up your savings

Maybe you’ve already taken care of all your debts and you even have a good chunk of change set aside for an emergency. If that’s the case, you have a great opportunity to start making your house sale proceeds work for you. Instead of putting your money in a normal savings account, which gives you next to nothing in terms of earned interest, find a savings account that offers you a lot more. Some online savings accounts give users an interest rate of .75% a year—a far cry from the measly .01% offered at most banks. Savings accounts may not give you a huge return, but the cash is always easily accessible should you need it and without any penalities.


Putting money into stocks isn’t a bad idea, but it’s important to work closely with a financial advisor who understands the ins and outs of the stock market and is able to appropriately diversify your stock account. Make sure you’re ready for the ups and downs the stock market will throw your way. Pulling your money out because the market takes a tumble can cost you more than just riding it out and letting the market do its thing. As we’ve seen over the past decade, the market falls then rises again. It might take time, so make sure you’re in it for the long haul.

What if you’ve already covered all your bases and you’ve paid off your debts, set aside a healthy emergency fund, built up your savings account, and sunk some money into stocks? In that case, it sounds like you should relax on a well-deserved dream vacation–and with your financial situation so squared away, you really can relax and enjoy yourself.