If you experienced debt before or you are still going through debt relief, you know that it is one endeavor that you do not want to go through again. Debt can dictate how you live your life and you can expect that it is a lifestyle that you would not choose for yourself.
Those of you who are about to go through debt relief, this article will contain what you need to do after you have completed your debt relief program. In a previous article (Part 1), we discussed how you can gain debt freedom. The tips contained here describes your next step.
In case you are reading this because you just completed your debt relief program, congratulations are in order. You have done what most of us dream about and striving to achieve. You are finally debt free! But what do you do next? Will you relax and go back to your old ways?
Necessary changes that will maintain debt freedom
Unfortunately for you, it is not possible to go back living to the way you were before. If you do, you can expect that you will end up in the same debt situation again. We do not want that and we will focus on how you can stay out of debt.
Your debt is proof that something was wrong before. That means you need to apply some changes that will solidify the financial freedom that you are enjoying right now.
When you got yourself in debt, that only signifies that you had been living a lifestyle that is susceptible to debt problems. If you don’t want to go through all of the hardships again, you need to adapt a debt free lifestyle. It can be a frugal lifestyle if you want but it is not a requirement. The important changes that you need to focus on should lead you to live below your means. If that means you have to move to a smaller home or you have to give up your expensive toys – then that is what you need to implement.
The only way that you can successfully change your lifestyle is when you alter your state of mind. Our mentality is in tuned with consumerism. This socio-economic order teaches us to buy things in excess of what we really need. We think that this will paint us as a successful individual but it helps no one but the corporations who sell these products and services. Contrary to what society dictates or what you got accustomed to, you don’t need most of what you have right now – or more than half of what you see on advertisements. Change your mentality about buying products and availing of services and you will free yourself from the bondage of materialism.
Lastly, you have to change your attitude about how you will spend your money. Whatever you change in your lifestyle and mentality will be reflected in your attitude towards your finances. It is all connected and if you are successful, then you can find it easier to implement proper financial management skills. Instead of buying the things you see in the store, you will think twice before doing so. You will learn how to skip the purchase even when you know that you can afford it. Instead, you will opt to save your money.
Factors that will make debt relief last
We mentioned proper financial management skills and this is something that will really help you stay out of debt. There are many things that you can do – most of them will help you live below your means. While the usual advice is to live within your means, that is no longer enough to achieve financial security. If you really want to protect your family from another financial ruin, you should aim to live below your means. That means having your expenses lower than your income so you have extra to put aside for savings.
Here are three important factors that will make your debt relief last – even forever.
Budgeting. You need to control where your money is going and this is only possible if you learn how to budget. This will keep you from overspending because you know how much you have coming in and how much of it can be spent of certain expense categories. If you find it hard to start budgeting, you can use software programs that promises to make it easier to create and implement. About.com has a list of budgeting software programs that you can look through.
Saving. When you strive to live below your means, you will have enough money to put aside for your reserve fund. This is very important because your savings will help you ride out any emergency situation and will keep you from borrowing money. It will also allow you to buy things in cash – thus keep you from wasting your money on interest.
Smart spending. The last factor is learning how to use your money wisely. You don’t buy things just because you can afford it. You have to learn how to say no despite that affordability because it is more beneficial to just put aside the money for your savings or investment.
What you need to understand is that staying out of debt is a constant struggle. This is why you need to change your lifestyle, mentality and attitude to make that transition bearable. Despite the material things that you will lose along the way, the contentment and peace of mind that debt freedom brings will make it all worthwhile.
Here is a video that you can watch to get more tips in being debt free.