Debt Reduction Guide: Planning For The Future
No Credit Needed Debt Reduction Guide
Section Five: Planning For The Future
Budget For Future Purchases
Now that you are debt free, put a plan into place so that you can stay that way.
- Create budget categories for future major purchases. I have categories labeled ‘automobile replacement’, ‘new furniture’, and ‘new electronics’ .
- Commit to paying cash (or using cash equivalents) for all future purchases. If you do choose to use a credit card, plan to pay it off, in full, each month. I would strongly urge you to live without a credit card, at least for a few months, until you have changed your old spending/borrowing/purchasing habits.
Maximize Retirement And College Savings
In Section Three, you began to investigate the various retirement accounts for which you are eligible. Now is the time to focus your energy and to fund them in earnest. Personally, I make maximum contributions to my 403(b), a Roth IRA, and Education Savings Accounts for my children.
Inspire Others And Enjoy Giving
Find someone with whom you can share your story. Celebrate your freedom. Now that you have taken control of your finances, be sure to share you blessings with others who might be in need. When you don’t have to worry about debt payments, giving money away can be really, really fun.
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Section Two: Moving Beyond The Basics
Section Three: Preparing For Freedom
Section Four: Staying The Course
Section Five: Planning For The Future
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I find it important to focus on maximizing retirement funds as well, but it can be hard if income is not high. Maxing out 401K, Roth IRA, and having a savings can be hard if you have rent, utilities, groceries, gas, etc. I am making a huge effort to contribute as much as I can, but I do feel the crunch. I am nearly out of student loan debt, and am excited to how my personal net worth will grow in the months to follow.
Great advice! I a few months, I plan to follow it. Just as soon as I’m free of credit-card debt!
I am so glad I came across your blog. Your advice with the debt reduction guide is a life-saver. To some people I may not have alot of debt, but to me it is alot when you don’t have alot of margin in between. I am actually excited about the new gain knowledge to pay off debt.
Once again, thanks.