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How to plan your finances after paying off your debts

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By: tiarajoseph11
on 11th Nov,2015

Let’s discuss about the strategies you can implement for your financial future after paying off your debts.

It will be a dream come true if you can pay off all your outstanding debts after rendering years of sacrifice, persistence, and patience. You’ll be getting immense pleasure and satisfaction after ripping off the last credit card bill. But, becoming merely debt-free shouldn’t be your main goal. You need to have all the financial answers that become useful for managing your future financial life. Practically we all struggle while doing something for our future, like growing a savings account.

So, let’s talk about how to plan our next move and steps we should follow to get a brighter financial future:

1. Slow but steady

It is better not to become impulsive and fast when you’re dealing with your own money. Always put your emotions aside and think wisely before spending a single penny. You may have saved a very small amount in your hand, after paying off your debts. So, take your time to get used to your financial situation and plan your next move. Learn from past experience, don’t try to act like the hare; become the tortoise instead.

2. Go for a new goal

Paying off debts has one big benefit. It’ll provide you with immense confidence to go for a new task. You need to keep encouraging yourself to overcome more hurdles. You might have paid off your huge debts in three to five years. So, after achieving such big success, don't stop there. Pull up your socks and devote two to three years more to save as much as you can. I’m sure you'll be so satisfied with the outcome.

3. Maintain the budget

You may think that your nightmares are over now, as you have paid off all the credit cards completely. So, from now on you don’t require to maintain your old budget plans. This is a misconception. If you don't follow the rules you’ve maintained earlier during a financial crisis, you can face that same hardship again.

After paying off your debts, you can live that same budget plan and gather funds for your future prospects. You can easily deposit $600 to $2,000 per month in your savings account. But if you don’t follow your budget continuously, that amount can simply "vanish” amidst your day-to-day expenses.

4. Prioritize special needs

Since past few months you are devoted to paying off your debts. So, it’s quite possible that you’ve neglected some major projects during that time. It may be buying a car, opting a life insurance policy, funding your child’s education or saving for a vacation. Now, it’s your chance to put money aside for those things you neglected. Retirement savings and emergency funds are the two most important things, which we normally ignore.

5. Invest WISELY

If you decide to invest your hard earned money in a new business, this is the right time to do it. You have a new, freshly optimized credit score, and a good amount in hand. So, keep searching for new ways of utilizing your capital and make more money. Buying real estate, investing in construction work, stocks and many more can be your main preferences.

Paying off your debts needs extraordinary patience, so don’t fall for any lucrative offers which, can ruin your future financial life. Always remember and learn from your past experience. Always try to manage a proper budget, pay your utilities on time. Fetch your credit report and search for any remaining error there. If you find out any dispute in your credit report, make sure to inform the bureau about this and get it removed from your credit report.

Read on: Which basic factors motivate you to manage your finances?

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