If you have paid off your debt after completing a credit card debt consolidation program, congratulations! Paying off debt isn’t easy, but you did it! Now what? It’s more important than ever to stay on track financially. You don’t want to go down the same road again. American Consumer Credit Counseling has some tips on how you can live your best (and most financially responsible) life after debt consolidation!
Stick to a Budget
The cornerstone of your financial well-being is your budget. Sticking to your budget is one of the most crucial pieces of credit counseling tips we can give. It will ensure you don’t spend more than you make over the course of each month. As you already know from your experience dealing with debt, spending more than you make is a recipe for financial disaster. When you stick to a budget, you won’t need to rely to credit cards to pay for regular expenses like groceries or utilities because all of those expenses will be accounted for. (Of course, you can use a credit card to pay for them as long as you pay it off right away! This can help you build credit!)
If you’re not sure how to initially come up with a budget, start by tracking your expenses for a set period of time. Figure out how much you spend on food, gas, clothes, etc. every month. Determine a realistic amount of money to allocate to every category of expenses.
Practice Good Credit Habits
Perhaps the most important way to ensure financial health after credit card debt consolidation is to keep up good credit habits. What does this mean? First, pay off your credit cards on time and in full every month. Leaving a balance on your cards is how interest starts to accumulate. Additionally, don’t apply for any new credit cards that you don’t need. Every time you apply for new credit, it results in a hard inquiry on your credit report. Too many hard inquiries in a short period of time will lower your credit score. Ask yourself if you really need that credit card before you apply for it. Know yourself and your spending habits. Will another credit card be too much of a temptation? You don’t want to get back in debt after you’ve just become debt free!
Save for Emergencies
You could be sticking to your budget and maintaining good credit habits, but then an emergency happens. Maybe you have unexpected health issues, a car accident, or you get laid off. If you don’t have an emergency fund, you could dig yourself very deep in debt all over again. Ideally, you should have three to six months worth of expenses in an emergency fund. That might sound like a lot of money, but by saving money in this fund every month, you’ll hit your savings goal before you know it! Even if you can only afford to save a little bit of money every month, every little bit helps.
Life After Credit Card Debt Consolidation – Final Thoughts
If you were in a credit card debt consolidation program, it likely took a few years for you to pay off all that debt. You put so much time and effort into becoming debt free, and you definitely want to stay that way! As long as you stick to your budget, practice good credit habits, and make an effort to save for emergencies, you should be able to keep your debt under control from now on.
If you struggle to pay off debt, ACCC may be able to help. Schedule a free credit counseling session today.