What to do after paying off a debt
Depending on whether you’ve got hundreds or thousands of dollars in credit card debt, paying it off can feel like a huge accomplishment or just like paying a bill. If you use your credit card regularly (for the rewards of course), paying it off at the end of the month may not be an activity you think much about. But if you’ve amassed a giant pile of debt, paying it off can feel like a huge weight off your back. But don’t just appreciate the accomplishment and forget about it. It’s time to be proactive! Here are some steps you should take after paying off a debt…
Step back and take a gander: Slowly paying on your debt each month is something to be proud of. It’s not easy, but you made it to the finish line. In order to make that happen, you probably had a budget in place that maximized your debt payments in order to get to this point. But you don’t have payments to make anymore. Now it’s time to look over your budget again and figure out what needs to be changed. Maybe you had to cut back in some areas that made money feel tight while you’re working on that debt. Maybe you haven’t treated yourself in a while. Either way, fixing your budget so it doesn’t feel so tight can be quite a relief.
Save money: When sacrifices have to be made in order to become debt-free, your savings can often be what takes a hit. If things didn’t feel that tight while you were working on your mountain of debt, your best (and easiest) option is to move that cash into your emergency fund. I would rework my direct deposit to send that monthly amount right into my savings account so I wouldn’t even have to think about.
Set a goal: Whether you’re thinking about taking a tropical vacation or starting a side hustle, using the money you’ve budgeted for debt payments is an exciting way to transition those funds. Consider opening up another savings account or getting a really big Mason Jar.
Stop going into debt: Don’t be the person who pays off a debt and then splurges on something and starts right back on the road you just got off of. Every time you log into your mobile banking app, look at that zero balance and let that happiness keep you from investing in more money woes.