Clearing your debt after many years of battling repayments can be very freeing. Not only will you now have more disposable income, but you can focus on your savings and your other goals – a fresh start for your finances that will open you up to a lot of possibilities.
So what’s next after you’re done with debt? It’s time to develop some better money habits and start looking to a more secure financial future.
Once you’ve cleared your debts, you need to take away the temptation to build up debt again. And one of the things you can do this is to cut up your cards!
To ensure a healthy way forward for your finances, you need to learn to live within your means. Saving for the things you want, instead of buying them on credit and worrying about it later, will help you develop a different approach to spending, ensuring you don’t end up in debt again once it’s cleared.
Now that you’ve finished your repayments, you can adjust your budget to help you manage your money going forward.
Using a budget planner, you can ensure that of your monthly expenses are covered, while making sure you have an amount set aside for savings. Freeing up debt repayments should make your budget a little more flexible, allowing you to put money aside for some fun savings, as well as for more important things.
A budget doesn’t have to just be something to help you clear debts. Most financially savvy people stick to a budget so that they can plan their finances and not have to worry about money.
Are you ready to start making the most of your new financial freedom? It’s time to set yourself some goals! Setting some financial goals can help give you the motivation to stick to your savings.
Setting financial goals can include both short and long-term aims. Do you want to buy your own house? Save for a big trip, or even just save for a treat. Whatever your goals are, make sure you define them and give yourself a target so that you can work out how much you need to save each month.
Have you given much thought to your future finances? Now that your debts are out of the way, the future is looking much brighter for your money.
One of the first things you’ll want to start thinking about is your retirement plan. Have you thought about when you’d like to retire? Or looked into how much money you need to retire comfortably? Understanding what your future finances could look like can help you make some smarter decisions for your future.
As well as thinking about your savings and investments, you also need to plan for the unexpected. Do you know what will happen to your assets if something were to happen to you? Making a will with FJS Lawyers can help ensure your family are taken of, no matter what happens. Once your will is made, it’s done, so make sure you get yours in place.
With some extra money freed up every month, you could be in a better position to pay it forward and do some good for others. There are all kinds of ways you can give to charity and help people in your community and beyond, including:
- Support local causes. Explore what’s happening in your community and see if you can donate money, or even your time, to help others.
- Make a monthly payment to a charity you support.
- Donate to friends and family who are raising money. Being able to donate now and then to different causes can support the people you love as they do something amazing for others.
- Treat friends and family who have helped you along the way to something thoughtful. Even if it’s just a bakery delivery or a little token to show them your appreciation.
Working on your credit score can help you improve your financial situation to give you better interest rates on mortgages, car loans and any other necessary financial agreements you’ll need to make in the future.
Some of the things you can do to improve your credit score include:
- Making sure your file is up to date and there are no outstanding balances that haven’t been cleared or removed.
- Using a credit card in a responsible way can help you improve your score. You could put something like your monthly fuel costs or grocery shop on your credit card, paying it off in full each month to ensure your balance stays low and manageable.
- Always pay your bills on time.
It takes time to improve your credit score, but by being responsible with credit and keeping a close eye on your finances, you’ll see your score rise in no time.
Being free from debt can help you put more money towards your savings. Learning how to save can be difficult, but it gets easier when you see those balances add up!
There are a lot of simple ways you can save money, including:
- Get rid of any unnecessary expenses such as a gym membership you don’t use.
- Plan your meals so that you don’t buy excess food that then gets wasted.
- Have some ‘no spend’ days each week when you leave your wallet at home to avoid the temptation of impulse spending.
Having a plan for your finances after clearing your debts will help you manage your money better from now on. Good money habits don’t happen overnight, but if you’re serious about improving your finances, there are changes you need to make that will help you live better now and in the future.