When You've Paid Off Your Debts
Friday, June 19th, 2009 Subscribe To Our Feed
So, you’ve managed to clear off all your credit card debt and can breathe a sigh of relief.
Phew … feels good huh?
Now what?
Well, your next step is … TO STAY OUT OF DEBT!
It can take years to clear your debt and get rid of it, and the last thing you need is to be saddled with more and go through the process again.
Whilst you were clearing your debt, you will have got into the habit of watching the pennies and managing your finances. Just because you are now out of debt, there is no reason whatsoever to stop this.
Keep it up.
Keep managing your finances; keep watching the pennies; keep making sure you don’t overspend.
This is an excellent financial habit to keep. You’ve struggled to get into it, so don’t get out of it so quickly.
Now you are debt free, use the extra income you now have that isn’t paying of debt to go into a savings plan. If you were paying $400 a month to clear your debts, you were living on what was left of your money every month. If you put $300 of this $400 a month into savings, you will soon have a very nice nest egg for holidays, emergencies and other big purchases that you want.
Avoid further hire purchase agreements or buying anything on credit too. If you save like this every month, then you will have $3,600 saved in a year. By using this money to fund larger purchases, you are avoiding the spiral of debt and getting yourself back into financial trouble again.
Credit and hire purchase is a slippery slope back into debt, and it won’t be long before you are struggling to meet repayments and having problems again.
Oh, and it goes without saying, don’t get any more credit cards! Avoid them!
Now you have got yourself debt free, make the effort to stay that way and keeping practising the good financial habits you’ve got in to.
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