In my 20s, Ipaid off my student debtand it felt amazing.
For the first time ever, I haddiscretionary income: money left over after necessities.
Many people do, though.
Its easier to get back into certain types of debt than others.
For example, youre probably less likely to rack up student loan debt again than credit card debt.
Many folks assume people go into debt because they have no self-control, but thats not always the case.
Sometimes people go into debt when theyre in desperate situations.
Maybe emergencies are your trigger.
Youdont have to save the traditional 3-6 months worthof living expenses, either.
you might start small and save just enough to not go back into debt.
And sometimes its just regular expenses that creep up on you.
But its not like you cant see these coming.
Usean online budgeting toolto help you calculate costs, then set aside a percentage every month for holiday spending.
Of course, for some folks, problem spendingisactually the problem.
How did you view money growing up?
Whats your definition of needs versus wants?
I realized that, if left unattended, my impulse spending could get me back in debt.
There are practical triggers to think about, too, though.
You have to focus on resisting the temptation to spend in the first place.
Dont worry, well get to that).
But what happens after that?
I bought so much junk after paying off all my debt.
Hundreds of dollars worth of clothes I rarely wore.
Phone upgrades I didnt really need.
I had no idea what I wanted.
You dont need some big, cliche travel goal for your money, though.
Once you know your goal, its time to recalibrate your budget accordingly.
There are some practical goals you should have, too.
If your emergency fund just gets you by, for example, you want tobeef it up now.
And then theres saving for retirement.
Thankfully, there areplenty of online retirement calculatorsthat can help you come up with a monthly amount.
Plug in your numbers and confirm youre saving enough.
These are just general suggestions for optimizing your long-term savings.
That meanstracking your spendingand making sure youstick to a budget.
That much is clear, and its probably what helped you get out of debt in the first place.
So what do you look for?
Second, it may take a few months, but your credit score should go up.
Credit utilization makes up a big percentage of your score, too.
This is the amount of credit you have available versus how much of it you actually use.
This means yourcredit utilization is lower, and your score should be higher.
Paying off debt is a big deal!
Research the next step, whether its investing or saving up for a house.
Illustration by Sam Woolley.
Pictures:www.lifeofpix.com,skitterphoto.com,pixabay.com
