Millions of Americans owe money to financial institutions in the form of debt. Whether it’s credit card debt, a mortgage or student loans, we all have something that’s holding us back financially, causing us untold misery and sometimes sleepless nights. Being in debt is no fun, so it shouldn’t come as a surprise when you feel like a weight has been lifted off your shoulders the moment you make that last payment to finally make you debt-free. However, existential angst may soon set in, leaving with questions that gnaw at you. What’s next after conquering debt? In this post, we’ll answer this question as well as give you tips to help you go forward in your new life.
Set Up an Emergency Fund
Life has so many unpredictable moments that seem to hit you at the worst of times. From an accident necessitating a visit to the ER to a broken down car that needs serious downtime and repair at the mechanic and body shop, we’ve all been there at one time or another. By putting money into an emergency fund, you’ll always have a ready finance source that you can dip into to take care of these unforeseen events. Ideally, you should take your average monthly pay and multiply it by 6 to get a good value with regard to your emergency fund. However, this should be subjective, and you should determine how much you want to put into your nest egg depending on your financial habits. This money should be able to support you for at least half a year should something go awry with your job as well.
Consider Switching Careers or Getting a Better Job
Most of us stay in jobs that we don’t particularly like because we have to pay the bills and believe that having a job is better than having none. While this may seem like a prudent thought, it may very well be the fastest way of getting back into debt. After you’ve cleared your debt, you’ll need to change your mindset as well as adopt an aspiration type of thinking. Challenge yourself to apply for new positions or take up a second job in an industry that you’re passionate in and motivates you. This way, you’ll grow professionally, get paid much more and learn the value of a dollar. In addition, don’t forget to put this new income stream to work by investing in stocks, bonds and futures or simply sinking it into your 401k.
Reward Yourself; You Deserve It!
Positive reinforcement is at the cornerstone of good human behavior. Clearing your debt should send you over the moon, and you should celebrate. Organize a party and call your friends over to celebrate your good news. Offer them tips on how they can do the same, and make the party both fun and educational. You’d be surprised at how many people are in your past situation and how a single word of encouragement can go a long way in helping them finally break free, just like you did.
Life after debt presents so many opportunities that, if taken seriously, will go a long way in making sure that you never have to go back to your dreaded debt years.