How many of you have paid off all of your debt before, only to say "Never Again" and then few years later do the same thing? I have. Not to the level I am working towards now, but multiple times I have worked for a bit until I paid it off and then went back to how I charged before!
What's worse is that each time its a bit deeper, isn't it. Well the Credit Card Companies raise your credit line since you paid it off! This becomes a vicious cycle. If this has happened to you before, or it you don't want it to, I suggest you put together a Success Map.
If I look back to all of those times I paid it off just to recharge again, there is one thing that happened each time. I thought I had reached my goal...heck I did, but I didn't reach my end-goal just a stage-goal. This is why I say often that Budgeting is a lifestyle, not a prison sentence to be hopefully paroled from!
This is were I really like Dave Ramsey's Baby Steps, or other guides that help you plan out what comes next. First, you really have to have your goals together. Is it buying a house? Saving for your kid's college? Retire early? Buying your own business? It doesn't matter, but you need to plan for it now, before you have paid off your debts, because you need to apply that same drive and moxie that killed those debts to the next project.
For us here it is:
- Emergency Fund - Done
- Pay off all consumer debt - In process
- Save 6 months expenses -Next
- Fully fund Retirement accounts - up to 15% of gross
- Pay off house
- Invest all available funds
- At $1 Net Worth -Buy own business
You can go to step 10 or beyond, my brother is a planner like that, but the point is to have a plan for what to do next. If you don't, you could be restarting the process at step #1 all over again, and each time it is a deeper hole to get out of, with less time to do it.
So set your plan up soon if you don't have one and make sure that you review your goals frequently enough that they still match where you want to go in life, before you get there!