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Young man celebrating his success to stay out of debt

No matter how long you’ve been working at it, finally getting out of credit card debt is one of the best feelings. It’s a huge achievement and something to be proud of. But what happens now? When you finally achieve this goal that once seemed impossible, it can be challenging to know what to do next, or how to maintain that success. Following these tips will help you stay out of debt.

Continue Following a Budget

If you were able to work your way out of debt, chances are you became skilled at following a budget. There’s no good reason to stop now. Continuing to follow a budget will help ensure you stay on track to meet all your living expenses without relying on credit cards. Just be sure to review your budget and adjust it to meet your new financial reality.   Young man celebrating his success to stay out of debt

Avoid Using Credit Cards

Don’t go back to the behavior that got you into trouble in the first place. Avoid using credit cards to pay for everyday expenses or extravagant purchases you couldn’t otherwise afford. If you must use a credit card to pay for something, such as airline tickets, be sure you have the cash set aside to pay off the balance right away so you don’t start to accrue interest charges.

Beef Up Emergency Savings

If you haven’t already done so, now is the time to work toward having a fully-funded emergency savings account. By setting aside money for the inevitable emergencies that arise, you’ll be able to pay for them in cash, rather than using credit cards and getting back into debt. By using the funds you had previously been using to pay off debt, you should be able to save at least three months’ worth of living expenses fairly quickly.

If your emergency savings is already set, you’ll want to start saving money for these other priorities.

Pursue New Financial Goals

Your single-minded pursuit of achieving freedom from debt paid off. Now, it’s time to pursue other financial goals with the same commitment. Whether it’s saving enough money to put a down payment on a home, buy a new vehicle or turbo charge your retirement savings, you’ll want to go after it with the same level of conviction.

Watch Out for Lifestyle Creep

Once you’re out of debt, you’re going to have more disposable income than you’ve had in quite some time. It can be easy to think of it as “mad money” and go crazy spending on things you haven’t been able to afford. But be careful. It doesn’t take long for those wants to start feeling like needs. If you allow yourself to indulge too much, it won’t be long before you’re on the track to overspending again.

Getting out of debt took vision, commitment and a strong will. Staying out of debt will, too. But if you remember the hard work and sacrifice it took to get to this point, we know you can do it!

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