Guest post by Brian Meiggs of My Millennial Guide
Have you thought about the feeling you will have once you wake up and you’re finally debt-free? It can easily provoke a sense of freedom and is a new chapter in your life. You now have extra spending money and can forget about tracking your money, right?
Wrong. Although you should celebrate becoming debt-free (a huge accomplishment), it is also a good time to double down on the money moves you make to ensure you won’t fall into debt again and can grow your net worth.
In this article, we will go over five ways for you to stay debt-free:
As soon as you become debt-free, it can be easy to stop worrying about your spending and budgeting.
Some people may consider completely stopping budgeting altogether. You may want to reconsider if that’s the case— using budgeting tools to manage your money is an important step to take to prevent yourself from getting back in debt.
Budgeting tools also allow you to stay on track for major financial goals such as buying a home, track your net worth, manage your finances, saving for your next vacation and saving for your retirement.
Build Your Emergency Fund
Once you are debt-free, creating an emergency fund is a top priority. Building an emergency fund ensures against life’s unexpected expenses.
Financial advisors swear by an emergency fund of three to six months of living expenses and stand by it for financial stability. If you are having trouble streamlining the process of building up an emergency fund then remember to start small, trim down your expenses, use a different savings account, or consider a gig job.