Have you ever imagined how life would be like after you have sent that last payment on your debt consolidation program? If you are just starting your journey now, this will be around 5 years in the future. Did you ever think about what you will do then?
The exact details are different based on the debt relief program that you will use to get out of debt. That is because their effects are different from each other. However, you can expect that some of them will be quite similar.
One of the common things that you have to accomplish, and the first, is to confirm that you are truly debt free. If you used debt consolidation loans, you have to get a certification from your lender that your debt had been completely paid off. If debt management is your choice of debt relief, then you need to get a report from the company you hired to manage your debts. It is either they will help you acquire the certification from your creditors or you will request it yourself.
You should also look at your credit report to see if the changes in your debt status had been recorded. If it is not yet there, call your creditor or lender and ask them to revise your status. You want to proclaim to the world that you are already debt free.
While you are looking at your credit report, see the current status of your credit score. With debt consolidation, the chances of that being too severe is unlikely to happen. But still, it pays to know if you need to work on increasing your score. If not, then you can proceed to the next task.
At this point in your career, you should have a big chunk of your usual expenses removed. That means it is time for your to change your budget plan. Since getting out of debt is done, you will work on staying out of debt. One of the best tools to make this happen is your budget plan. You need to keep living on a budget to ensure that you will never be in debt again. If your current budget works for you, think about putting the freed debt payment money into your savings. It is best to grow it so you can stay out of debt.
Here’s how that will work. When you have savings, any emergency situation will not have to compromise your current budget. If your extra money cannot afford the immediate need, you don’t have to borrow money just to afford it. You can easily finance that need. Even if your main source of income is compromised, you can be assured that you have the means to feed your family for the next couple of months. Even if no emergency need happens, you can enjoy that savings well into your retirement. Or, you can opt to buy an expensive item (like a home), in cash. It is more enjoyable to own a home that you did not put yourself in debt for.
Lastly, you need to start making the right spending choices from now on. Even if your money is in abundance, choose if every expense is really necessary. A low cost of living with a huge reserve fund is more appealing than a life full of vacations and trendy possessions but a mountain of debt.
When you have all of these in place, this is the time when you can celebrate and congratulate yourself. Once you are sure that your chances of landing in debt is minimal, that is a real cause for celebration.