Is Your Responsibility Over After Paying Off Debt?

my debt is gone, now what

Please welcome Good Nelly here on Bright Cents. She is guest posting today on the blog about a topic we haven’t actually covered quite yet. Enjoy!


So give yourself a round of applause. You’ve paid off your debts successfully. Now what? Is your responsibility towards managing your finances over? No. On the contrary, now it’s your job to manage your finances effectively.

Here are a few things you should do after paying off your debts.

Perform a “Financial Postmortem”

It is very important that you understand why you got into debt in the first place. An analysis of how you got there will help you avoid falling into debt problems in the future. It is also important that you plan a suitable budget, which will help you save a certain amount, every month. Planning and following this budget will also help you curtail extra expenses, which can help you avoid falling into debt in the future.

Try a “Debit Card Only Diet”

It is quite important to follow a certain diet when you want to shed off certain kilos or avoid putting on extra weight. Similarly, it is important to follow a “debit card only diet” to shed off extra debt load or to prevent acquiring new debt. Try using debit cards for the time being, so as to change your overspending habit. After some months, you can start using your credit cards responsibly – that is, if you repay the outstanding balance at every billing cycle. Doing so can also help you add positive items to your credit report, which can help you increase your score, too.

Deposit Money Into Your Emergency Fund

What is your net income of six months? You should have this amount in your emergency savings fund. A financial emergency might have led you fall into debt in the past. Keeping an emergency fund of six months (or more), can save you from falling into debt in the future.

Be careful! Do not use this amount unless it’s a real financial emergency.

Start Saving For Retirement, If You Haven’t Done So Yet

Along with building your emergency fund, it’s also quite important to start saving for your retirement. Do you think you’re too young to start saving for your retirement? Change your thoughts! Financial experts say that you should start saving for your retirement as early as possible so that you can have a decent amount at your retirement.

Do Not Close Your Credit Cards

This is quite important – do not close your credit cards to stop overspending. Closing your credit cards may drop your score to some extent, as your available credit limit will get reduced. Moreover, closing one of your oldest credit cards can also reduce the length of your credit history, which can also negatively affect your credit score. 

It Doesn’t Have to Be Painful

Don’t think that you have to compromise on your enjoyment of life to avoid falling into debt again. You can splurge a little sometimes – just keep a check on your budget. If, in one month you spend a little more in one category, then try to reduce your spending from other areas. This will help you stay on track.

If you’re planning a big purchase or a vacation, try saving each month so that you don’t have to swipe your credit card for a large amount, which might be difficult for you to pay back later.

That’s all. These small adjustments will help you maintain a healthy financial life and build a secure financial future, free of debt.


Good Nelly has been associated with the Debt Consolidation Care community for the last 8 years. She has a burning passion for exploring the financial world. Her other passions include reading, learning and traveling. She has recently started her own blog at wherein you can get her personal opinion on money management strategies, financial happenings and so on. Her goal in life is to write articles and help others to fulfill their dreams and be self-dependent.

Photo Credit: Benjamin Beckwith

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I am Chenell Tull and so far, I've had a pretty rough time with my student loan debt. Recently, I've figured out a more productive "get out of debt" plan and the goal is to pay off over $60k in just 36 months. If you want to learn more, subscribe to the mailing list and get FREE updates on my successes and failures on this journey out of debt. 

  • I like this advice on paying off your debt. Where were you when
    I was in my twenties! 🙂

    Once you are out of debt, putting money aside for the E-Fund and retirement are crucial at a young age. This will create the magic needed to start your savings compounding. Saving money to buy a home might be another good place to put your money once you are out of debt. Purchasing a home with a large down payment will lower your mortgage payment and remove the need for PMI.

    • I can’t ever stress the importance of saving for retirement as early as POSSIBLE. Glad you agree, Bryan!

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