The number of people living under debt burden is growing exponentially; the number of defaulters on their monthly loan repayments is higher than that of people with only their necessary expenses. Why? Because people usually get more and more loans without giving a thought to how they will be repaying them. People are struggling with hefty loans and debt issues, they are unable to manage their finances and pay off their loan repayments every month, ultimately leaving them more and more indebted. People have accepted debt as a part of their life and continue to live with them; this approach only leads to stopping them from moving forward with other life goals. People should realize that life with debt is nothing but a worrisome journey, where you have to think before every turn you take. While, if you are debt free now, life after that would be more relaxed and you can actually make some substantial choices.
What is Life After Debt?
Being debt free, is the key ingredient to a better quality of life; to which, every individual is entitled to. Life after debt is possible and is amazing; you can never live your life to the fullest if you have unnecessary payments to make every month. Being in debt leaves one with restricted choices, even with the kind of work you want to do since you have constant creeping up debt crisis. You might want to make a career in public service but you will think twice on what you will be earning out of it because you have debts to pay. Thinking of buying a house, starting or expanding your business while you’re indebted is not even considered. Being debt free leaves you not just with more options to invest your money in something that you can completely benefit from. Your depository income will only be spent on what you want, without having to dedicate a big portion of your income to repay your loans, that too, with heavy interest rate. When you’ll be living a debt free, you will have that big portion of income at your expense, you will be free to spend it the way you want.
Here are a few tips on how to make wise choices after you’re living a debt free life.
1. Career Move:
When you finally have money to make choices, you can benefit from, in the long run; you will have more career choices now. People sometimes leave their education in between due to not having enough financial resources to bear the expenses or don’t think about getting an advanced degree to be at a better position. You can invest some money in a business, or can invest in continuing your education or excelling in what you do. Even if you don’t plan to get back to studying, making your own career move by investing the money in a small business can give you a secure income resource.
2. Emergency Fund:
Earlier, when you were indebted with a huge amount of money, you would hardly be saving any money or depositing some money in your emergency account. Now that you’re finally free from debt, you can actually put some money to be used for something urgent or for something you’ve been planning for a long time.
3. Retirement Savings:
There is no such rule that says you can only start saving for retirement at a certain age. Now is the best time to start saving for retirement, when you have money that doesn’t go into unnecessary loan and interest payments, you can now consult a financial advisor to suggest you with the best retirement saving accounts or plans for Individual retirement account. Your employer may also provide you with a 401(k), pension account for automated deduction of your income before any tax deductions.
4. Still Need a Smart Budget:
Once you are debt free make sure you don’t get into more debts in the future. In order to do that, you need to make some smart financial moves and a well thought budget plan can keep you within the debt free zone. While it is obviously tempting to have some charges against your credit to finally spend freely but being a spendthrift will only lend you into more debt traps and you should consider processing of your credit card. You can invest some money in stocks or in a small business that you can run side by side. A planned budget and your persistence with it can make your life easier and can save you from a lot of other money issues.
5. Spend on Yourself:
The past debt inhibited years might have been tough on you so it’s finally time to spend some money on yourself. Treat yourself with a nice vacation or something you have been wanting to buy for a very long time. A reward after so many years of not having any fun, will not harm your budget because you too deserve something for being so patient and a smart spender.
Now that you know what life can be without debt and how you can utilize your money when you don’t have to make monthly loan repayments, you will want to be debt free as soon as possible. Yes, that is what you should be doing and for people who are already enjoying their life after debt can just do what they want to do.