What You Should Do After Paying Off a Big Debt
Hell is over! You’ve just made your final payment on a huge debt you never thought you’d get out of. Now what? Well, it would be a smart decision to learn how to manage your finances properly, so you don’t become indebted ever again.
You don’t need to read a “How to manage your finances properly” guide. Your mistakes were probably good enough teachers. However, just for the sake of it, let’s see what you should do after making the last monthly repayment on a debt.
How to Manage Your Finances Properly
You’ve made it, so you deserve to pamper yourself. Take that sum of money that represented a monthly payment and buy yourself something pretty. Go out with your spouse for a fancy dinner or get a couple of days off and travel. It’s very important to blow off some steam. After all, you’ve put a lot of effort in paying the debt.
- Assess your financial priorities
What are your next priorities, since now you’ll remain with a good chunk of your salary? Assessing your priorities is the very first step you take in learning how to manage your finances properly. It will help you see the things that truly deserve your money. You can start saving money for something you’ve always wanted to have, for sending your child to college, etc.
- Pay off your other debts
If you have other debts, the fun is short-lived. The still existing debts must be prioritised no matter what. Pay off the one with the highest interest rate first, then move on to the next. When you don’t have other debts, you can do something else with the money. You could:
- Start a savings account
Given that now you have some disposable income, why not save it? Put it all into an account so that you can retire faster. A savings account definitely comes in handy. It’s certainly more recommended for you to do that than spend your money mindlessly on things you don’t need.
- Work on your willpower
You must learn how to say “No!” when you feel tempted to purchase something that might throw you back into debt. You’ve felt in on your skin how it is to be sleepless because you don’t know how to make ends meet anymore. Don’t give in to temptation, at least not to the bad kind. Buy only what is truly vital for you and your family.
It’s not that difficult to learn how to manage your finances properly. Debt is a harsh teacher, but the lessons it teaches are extremely valuable. You’ll probably know everything you mustn’t do once you’ve been battling debt for a long time.
Frugality will be one of those traits that define you. Thriftiness, as well. You’ll know how to balance your income, so you won’t need to borrow money again. Follow these five simple steps, and you’ll most definitely be in the safe zone.