Once the shock wears off and it sinks in that you were successful with debt reduction, having whittled down your mountain of bills, you are likely to ask yourself, What now?
Before you wrack up new debt celebrating, take these steps to devise a post-debt plan of action so you can stay in the black.
Plan for the unexpected
If you haven't done so already, now is the time to open an emergency savings account or set up regular automatic payments to an existing fund. If you find yourself putting this imperative task off, stop and remember how you got into debt in the first place. No doubt an adequate emergency fund would have prevented you from sliding into debt, or at least made the experience less treacherous and lengthy.
Consider the future
Though you no doubt lost precious time while in debt, keep in mind that it's never too late to fund your retirement. Contributing to a retirement plan even for a few years allows you to create a more secure future for yourself. If your employer provides an opportunity to fund a 401(k), take it. If that benefit isn't offered, open your own IRA. In most cases, retirement savings will also lower your taxes.
Resurrect your dreams
No doubt your dreams that require financial backing fell by the wayside during your debt crisis. It's not practical to even think about a luxury cruise or remodeling your kitchen when your mortgage is overdue or your creditors are calling and you require debt help.
Now that you've experienced debt solutions, give yourself permission to dream a little. Make a list of your top desires and determine how much they will cost you. Then save a certain amount of money on a regular basis, and wait until you have sufficient cash saved to fund your dreams. Paying cash for fun items will not only keep you out of debt, using such restraint is bound to make you feel especially proud of yourself.
The brand new world of being debt free can be a bit disconcerting at first, but once you get used to living a life without a mountain of bills, you'll find it easy to build wealth and live the life you always imagined.
About the Author:
Julie Bawden-Davis is a Southern-California-based writer specializing in personal finance and insurance. Since 1983, her work has appeared in a wide variety of publications, including Family Circle, Ladies' Home Journal, Parenting, Entrepreneur and The Los Angeles Times.
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