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What a wonderful feeling it is!
Youve finally wiped out the debt thats been weighing you down.
But dont get too dreamy-eyed.
Financial experts shared five things to do to start fresh after wiping out debt.
Ideally, set aside at least three to six months of living expenses.
Start by automating transfers to a high-yield savings account each month.
This gradual approach helps you adjust to saving regularly while reinforcing positive financial habits.
Even modest contributionscan significantly grow over time through compound interest, ultimately providing security in retirement.
A tax advisor can help you choose thebest retirement accountbased on your goals and current income.
Why should you use credit cards?
It comes down to the big picture of your financial health and how potential lenders perceive it.
Remember that debit cards do not factor into credit scores.
Adjust Your Budget
You probably stuck to a frugal budget to wipe out your debt.
Dont let that habit go dormant.
In fact, double down on budgeting.
Hopefully, you have been working with a budget to allocate money each month toward your credit card debt.
If you havent, this is the time to get one in place, Fox said.
Use whatever tool you like: spreadsheet, app oreven pencil and paper.
Take that same payment you made toward your debt and allocate it in your budget to savings.
Pro-tip: Include a line item in the budget in expenses for savings, Fox said.
This treats savings as a mandatory bill.
Get in the habit of depositing any cash or checks as you receive them, Fox said.
Open all mail including every bill as soon as it arrives (paper or electronic).
That system may be a folder that resides on your desk, an app or an online calendar.
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