The burden of debt is enough to give people sleepless nights and make them depressed throughout the day. Fortunately, after struggling so hard and putting too many efforts, you have finally managed to clear the majority of your debts or almost all your debts. You must be now feeling relaxed like you have attained the freedom and you are under no burden. At last, with your dedication and persistence, you got your peace of mind again back, and this is something you probably won’t be willing to lose in coming time.
Now, what should be your next step? Yes, you have removed the stain of debt and made yourself debt-free, but what things you have in your mind. You don’t want to get in debts again, which is possible only if you take things seriously from the very start so that you don’t face this bad phase again in your life. Here in this blog, we have prepared a list of useful and productive things that you should follow after you have cleared all your debts. So, let us get see them one by one.
Finally cleared all your debts: what’s next?
Create a budget and follow it strictly
Lack of budgeting is one of the main reasons why people face financial instability in their life. So, this time, create a budget and follow it purely no matter what happens. This will help you immensely in keeping a balance between your spending and saving, which is the golden rule to be financially stable. Yes, you have worked hard to get rid of all your debts, but you can’t just be carefree and start spending without a proper budget. If you want to stay debt-free, then learn from the mistakes that you did in your past. While creating the budget, mention even the smallest expenses and see decide how much you need to save for your future goals and then, get along with it.
Get rid of the remaining debt ASAP
Well, if you have some few debts remaining, then try to clear them as soon as possible before they start accruing to the level where your budget is getting disturbed. You could use your saving to do so, but if you have just begun to save and is not enough to make the payments, then you should look for other options. As you have just recovered from the behemoth debts, your credit score would be still in bad shape and getting a fund from banks or credit unions might be difficult. So, you can go for bad credit loans provided by well-reputed direct lenders in the UK like A One Loans, British Lenders and others where you need no guarantor for approval and no additional fees. There will be two advantages of going with such funding options- first is that you can clear all your remaining debts. Secondly, you get the golden chance to improve your damaged credit score.
Related: Follow 6 Steps to Pay Your Debt
Start building your emergency fund
You cannot simply deny the fact that life is full of surprises, and it is beyond our control to predict things. No matter how much efforts you make in your present, there will always be a chance that any unexpected financial expenses could knock your door. Therefore, the best you can do is to build an emergency fund from the very start so that when an unfavourable condition arrives, you will be ready to manage it without breaking your bank. For this, you have to keep a separate section in your budget and keep saving every month. If you are not able to save much, then look at the expenses column of your budget and see whether you can cut the discretionary expenses.
Limit your credit card usage
Credit card is one of the most significant factors that people end up in too many debts is the over usage of their credit card. For such people, a credit card is the first thing that they probably take out from their wallet, and they prefer swiping their card more than paying cash even it‘s the payment of a grocery item. Well, you need to get this fact clear that the money that you spend via your credit cards is the money you don’t owe and in the end, you will have to pay it along with interest. Thus, it would be better that you reduce the use of your credit card. Try not to use more than 50% as this way you will also be building your credit score as well.
It just takes two or three bad financial decisions to get into the debt and to get out of this suffocating zone is far more complicated than you can imagine. Thus, if you have managed to clear all your debts, then try to be that way for an extended period.