Congratulations! You’ve worked so hard and your dedication has finally paid off. After struggling in the depths of debt, you’ve managed to climb your way out. Your reward? A brand new life – a life after debt. It’s an amazing feeling when you realize you’re in control of your money. All those sacrifices have made this moment worthwhile. But now that you’ve reached your goal, what should you do next?
A vacation or a nice splurge may sound nice, but hold on a second. In this new life, you’re supposed to keep working towards a better financial future. Getting debt-free is a huge accomplishment and should be celebrated but you should always keep the end goal in mind. You can achieve debt freedom, but to maintain it and further improve your financial situation is a lifelong commitment.
Once you reach life after debt, your next move should be to set new goals. Perhaps you want to buy a house someday or be able to retire by a certain age? Whatever it is, it’s important that you have additional ambitions to work towards.
Before you set off on the next chapter, make sure you have the basics covered.
Step 1: Spend less than you make. This was necessary in helping you resolve your debt in the first place, and it is necessary to help you maintain your new financial status.
Step 2: Set up an emergency fund. You’ve resolved your debt. Now, start building an emergency fund. It’s important that you have enough money to cover all of your expenses for a minimum of 6 months should an emergency arise. Life is unpredictable, so it’s smart to be prepared.
Step 3: Start saving. You might still be in debt repayment mode, but now that you’re debt-free and have an emergency fund, re-route the money (that went towards debt-repayment) to savings instead. You won’t even miss the money, and it will take you one step closer to where you want to be.
Step 4: Don’t forget about the future. Most people will want to retire someday, but in order to do that, you’ll need to make sure you have enough money to fund the lifestyle you want. It’s never too early to start saving for retirement.
These are the building blocks of a solid financial future, so make sure you actively follow these steps as you move forward in your journey. Once you’ve got the fundamentals covered, you’ll be well on your way to achieving your new goals.
There is life after debt, and trust me, it’s pretty darn awesome!