Congrats! You are debt-free, what are you now?
Going through a pile of debt can feel like a difficult battle. When I finally reach the other side, I'm sure it feels like a great relief. I'm not kidding. It's great to be debt-free!
However, after that, stress may start to build up again.
Now that I'm debt-free, what should I do next? What should your new focus on your finances? And what should you do with all your newly found extra cash?
Are you debt-free now?
Whether you used the debt snowball to tackle your debt or undertake debt consolidation, you have a lifetime to pay off all your debt I worked hard.
Please take a moment. How do you feel about telling yourself, “I'm debt-free”?
It's pretty good, isn't it? Having set goals for a long time, I can finally be a little scared of standing on top of a mountain.
Where are you going next?
Start creating the financial roadmap.
Here are eight financial tips to help you answer the question “Are you in any debt right now?”
indicate. 1.1. Keep Budgeting
The most important thing to remember when you're finally out of debt is not to give up on your budget.
Lots Often, people get excited about the extra dough in their monthly cash flow and get their budget out of the window altogether.
But doing this can cause big problems due to lack of budget, it's easy to get back into debt.
In fact, monthly cash flow is changing and budgets need to be changing.
Once you've paid off your debt, you'll need to reorganize your budget to determine where to go for your extra cash each month.
To readjust the budget, 30-30-30-10 Consider a budget or a 70-20-10 budget. Both of these are percentage budgets that you can easily carry out if you want to keep saving and include some spending in your life.
However, there are many types of budgets you can choose from, and all you need to do is find something that makes sense to you.
2. Fill Your Emergency Funds
When looking head-on at a terrifying debt balance, some people are 100% focused on paying off their debt. Others, on the other hand, prioritize savings while paying off debt.
Whichever way you choose, you can tell yourself, “I have no debt,” so let's turn your attention. Savings.
How much to save
A good place to reorganize your budget First , Increase your monthly donations to your savings account. There is no “correct” monthly amount to put into savings. Monthly savings vary from person to person.
However, the proper rule is to aim to save 6 months in an emergency. Fund. It prevents you from returning to debt again in case of an emergency. Instead of stacking up your credit card invoices, you can use emergency funds.
3. Check your insurance needs
Are you debt-free now? Filling up your emergency funds is arguably a top priority after you're debt-free, but don't forget about other important factors in your overall financial position. In other words, insurance.
Types of insurance
When it comes to insurance, there are many options there is. Life insurance is the most popular, but there are many other types to consider, such as long-term disability insurance and long-term care insurance.
Debt, the need for insurance is often postponed when people concentrate on payments.
Now is the time to reassess. Think about the strengths and weaknesses of life insurance, as well as other insurance needs. Now that the cash has been released on a monthly budget, it may be a good time to start buying a new insurance policy.
Four. Consider investing
Like savings, many people stop investing while concentrating on debt repayment. Or they completely abstain.
Once you have paid off your debt, this is a great opportunity to increase your contribution again.
Have you started investing yet? And don't you know where to start?
please do not worry! Investing is for everyone — and you don't need a lot of money to get started. You can start with real estate, cryptocurrencies, or index funds.
If you feel crazy and don't know where to start, check out this guide for beginners.
Five. Focus on your retirement account
So you are finally debt-free, what is it now? It may seem like a long way off, but it's important to start thinking about retirement right now.
You may have delayed your retirement contribution when you were paying off all your debt. All right. But now that we're out of debt, it's time to return to prioritizing retirement savings.
Most professionals We recommend allocating 15% of your monthly income to your retirement account. Of course, it's good enough to contribute.
Don't have a retirement account yet? That's okay. It's a good idea to start saving early, but it's never too late to start saving for retirement. Investigate whether
401 (k) or IRA is best. And if you work for yourself, there are various self-employed retirement plans.
6. Plan your financial future
When you are in debt, it can be completely inclusive. It's easy to drop other aspects of your financial position on the roadside as you work on your monthly debt-killing goals.
But what is it now if you run out of debt?
Make a new plan
Think about this It's time to learn more about your financial future. Now that the debt has been dealt with, you are free to reassess other economic goals.
For example, do you want to save money to buy a house? Do you want to save money to start a business? Or are you ready to buy a new car right away?
Whatever your future economic plan, now you have a new plan and a new budget to clarify your next economic goal.
7. Organize your financial life
Ask yourself, “Are you debt-free now?” A good question about your financial future. But preparing for your financial future begins with organizing your financial life today.
How to organize your money
Start by setting up an invoice for automatic payments. Not only does this help simplify your finances, but it also helps ensure that you don't forget to pay your bills-and quickly return to your credit card debt.
After all, most Americans are in credit card debt, but it doesn't have to be like a majority!
You can also further automate your finances, such as severance pay automation and emergency funding and savings account automation.
I'm thinking, “Are you in any debt right now?” It's also a great opportunity to set up a sinking fund and organize your financial statements-everything that could have been ignored during the debt repayment period.
8. Treat yourself now that you are debt-free
Say it out loud and proudly: “I am debt-free.” Being debt-free Is great
You are debt-free, what are you doing now?
I heard it's time to fill your emergency funds. Increase your post-retirement contribution. Start investing. organize. You now know the drill.
But don't forget to treat yourself!
You've spent a lot of time, sweat, and dedication to finally end up in debt — and you deserve to reward yourself. Of course, this does not mean canceling all your efforts.
But most of maintaining a healthy financial position is knowing when to be disciplinary and when to treat yourself.
So you don't have any debt, what are you doing now?
Plan your celebration
Get the mood board (and financial planner!) And start planning something fun. Have a party or go to a 5-star restaurant to order expensive wines that you usually don't want to avoid. Whatever you want!
You got it.
Debt-free is great!
Ask yourself, “So I'm not in debt, what are you doing now?” It doesn't have to be such a scary question.
You've worked hard to overcome your goal of being debt-free — and you've done it! Now you can work on and shatter your next economic goal:
Before that, don't forget to treat yourself along the way. Then go back and build a healthy economic future. And now that you have cleared your debt, try some of our free financial courses to help you succeed.