Life after Debt Reduction

When you live with debt, you often cannot see past it. It is difficult to imagine a free future when you have tens of thousands of dollars in credit card debt, unsecured loans, and medical bills. For many though, that dream is realized through debt reduction. When skilled negotiators can reduce the total amount you owe and help you develop a plan to pay it in a methodical way, you can become free of your bills in as little as one to four years. The relief is immense. But what then? To keep your debt-free life a reality, there are some steps you should take.

First, avail yourself of the counseling that is offered by settlement services. The process doesn’t end when you pay off your balances. In many ways, it is just the beginning. Counseling can help you develop a budget, live without relying on credit, and make good financial decisions for your future and that of your family. This is crucial so you do not fall back into the downward debt spiral.

Should you cut up your credit cards? This depends largely on you. It is generally wise to have a card that you pay in full each month so you can establish or build good credit. But if you think you cannot have a credit card in your wallet and be able to resist the temptation of spending money you shouldn’t, then there are two choices. You can either keep a credit card in a secure location but not in your wallet. This way, it really is for emergencies. You can also forgo cards altogether. There are other ways to build credit, such as having a utility bill or student loan.

Another important step is to begin saving more vigorously. If you do not have an emergency or rainy day fund, start one and add to it regularly. It is typically suggested that you save between three to six months worth of salary in case you have an unexpected expense or an unexpected drop in income. When you get tax refunds or bonuses or a larger check because of overtime, put the excess in this account. When you feel that is sufficient, keep adding.

Treat yourself. Staying out of debt is like staying on a diet. If you do not allow yourself a treat now and then, you are going to end up eating an entire pizza and a pint of ice cream in one sitting. Financially, you should allow yourself small treats (or larger treats if you save up for them and can pay without credit).

If you love going to dinner with your friends, plan a once-a-month outing at a restaurant. Other times, you can get together at home to reduce cost. If you really want to buy a new laptop, save up. When you have enough, get it. Do not give into the temptation to buy it with credit and pay it off slowly. That begins the debt cycle. You do not have to live in a bare, cold room in order to be frugal. You can have the things you want and do the things you enjoy, but you do them more responsibly.

Keep your goals in mind. Living without the burden of debt is freeing and greatly reduces stress in your life. You can have instant gratification via a credit card or you can have financial security. Which do you want?

Learn about debt settlement, debt consolidation, debt relief, and more at Impact Debt Settlement.