Life after debt

If you've got out of debt, follow these top tips to stay debt free for good.

If you have ever been on a diet and lost lots of weight, you’ll know how wonderful it feels to achieve your target weight. Once you have shifted the excess pounds, you become lost in the euphoria of being able to clothes shop for new outfits and buy smaller sizes.

But the hard part is keeping the weight off. It can mean a complete lifestyle change.

Those extra inches can easily start to creep back on again without you even noticing, until you suddenly find when you try to do up your jeans, the zip doesn’t seem to want to budge. Your waistband has expanded again and you have to resort to rooting through the wardrobe to find the old baggy jeans you thought were buried for good.

Trying to keep excess weight off can be similar to trying to stay debt free.

After watching the pennies and counting down the months to being debt free, the day you make that last payment is a great day. You’ve finally paid off all your credit cards and loans and you’re debt free. It’s a wonderful feeling!

What does this feel like? As one of our many former clients, now debt free, said when they wrote to thank us for our help:

“I can now start a new life. I now have peace of mind and can sleep at night. I want to thank you from the bottom of my heart. Many thanks!”

You now have money spare at the end of the month after paying the bills; it’s all yours to use as you please. The long months of scrimping and scraping have paid off and now you don’t owe anyone any money.

It’s one thing to get out of debt, but it’s not easy to stay out

It’s not always easy to stay out of debt and just like losing weight it can mean a complete lifestyle change. You need to protect yourself from getting into debt again.

Remember how easy it was to slide into debt the first time. It could be even easier the second time. The temptation to apply for a new credit card or loan can be hard to resist.

So, when the last debt has been put to rest, would you save the money you used to pay your creditors, or would you be tempted to slide slowly back into debt? Once debt free, how can you ensure that you don’t fall back into bad habits?

Seven tips to help you stay debt free

1. Think about the reasons why you got into debt in the first place. Knowing how you started on the slippery slope of debt in the first place can help you avoid the same mistakes in the future. Did your debt build up due to illness, unemployment or simply by over committing yourself?

2. If you have a reputation for being a bit of a shopaholic  then leave your credit card at home when you go shopping. Take cash. That way, you can only spend what you have.

Best of all, avoid the shops altogether!

3. Put together a budget and stick to it. Keep a spending diary to see where your money is going. Make a list and think about things you actually need to purchase rather than things you want.

It would be great to be able to buy the latest all-singing all-dancing car or what seems like biggest TV screen in the world, but are they essential? Nothing is worth paying more for, if it means slipping back into debt.

4. Scientists say that experiences, not possessions, leads to greater happiness. According to San Francisco State University experiences (travel, buying a bike and using it or even a restaurant meal) brings longer-lasting joy than keeping up with the Joneses. Use this information wisely!

5. Start saving. Once you have paid all your debts off in full, try and save the money you now have spare. You’ll be amazed how quickly it’ll add up. It will also avoid the need to take out further credit to fund unexpected expenses.

6. Check your credit file regularly. After you are debt free then your credit file will still be impaired but as time goes by your credit score will slowly improve. (You can sign up for a free credit report from Experian. Just remember to cancel your membership before the 30-day trial period is up to avoid being charged in the future.)

If you do decide to get a credit card to help improve your credit score, make sure that you use it to your advantage. Try and pay the full amount off each month. Otherwise, make sure you never miss any payments and stay within the limit.

7. Adopt new goals and stick to them. Now you have disposable income you can start to make plans for the future. Maybe you would like to save for a deposit to buy a house or focus on saving for a holiday.

A new beginning

Life after debt can feel strange. No more dreading the bills through the post and no more constant calls from the creditors.

Once the initial rush of debt-free euphoria passes, you need to take the time to plan for your future. Staying debt free can be tough, especially when you are being bombarded with invitations from creditors to take out more debt. But the more you plan, the easier it will be to stay firm and say ‘no’ to temptation.

Debt ‘freedom’ may take a while and it can be difficult trying to stay positive, but there is light at the end of the tunnel. Once you reach it, make sure you stay there!

If you’ve got money worries and want to become debt-free use our online counselling service Debt Remedy, or contact us.