You Paid Off Your Debt… What’s Next?

Are you ready to pay off your debt but have no clue where to start? Read the first post in my series about paying off your debt, then read through this series until you get to this post, our twelfth in the series.

It’s a great feeling to finally be rid of your evil debt.

Don’t forget that feeling for one second.

You worked long and hard to get to this point. Cherish it.

Before you celebrate too much, there’s one thing you have to remember.

You’re not out of the water yet.

There is still a ton of work left to do after you’ve completed paying off the debts you wanted to eliminate.

You Made Big Changes – Don’t Let Them Be Temporary

You likely had to make some big changes to get to the end of your debt pay off journey. Some of them were extreme but temporary measures. However, I’d venture that a majority of the changes you made were good permanent lifestyle adjustments.

If you immediately go back to how things were before you started your debt pay off journey, you’re just going to end up back where you started in a few months or years.

Wouldn’t it be a shame if you worked so hard to pay off all of that debt, just to end up in the same exact position again? I know I would be devastated if that ever happened to me.

You need to keep the momentum moving in the right direction after you’ve paid your debts off.

You Can Add Some Things Back

It’s okay to add some things back into your monthly spending that you had cut back on, but examine every item with extreme scrutiny.

Does this spending make my life better? Do I value what I’d be spending the money on highly? Does spending this money help me reach my long-term goals?

If the answers to these questions are yes, you may be able to responsibly add some spending back.

You might notice that you now really enjoy dining out every once in a while. However, if you make it a habit and dining out turns into eating out multiple times per week, it won’t feel as special any more.

I’m all for enjoying life. Just don’t fall back into bad habits. They could become a permanent part of your lifestyle again.

If you had cut back on your shopping for entertainment budget, do you really miss buying things that likely ended up hanging in the closet forever after only being worn a couple of times?

I’m guessing once you broke the habit, all of the window shopping wasn’t really something you missed anymore. Make sure you still evaluate each purchase to see if you really need it or if it is a want.

Have a process in place to make sure you don’t return to those credit card swiping days that led to maxed out credit cards you couldn’t pay off.

Don’t Quit Earning Extra Income

Earning extra income was a key to our debt pay off success and we didn’t quit simply because our debt is gone.

Your extra income may lead to even bigger opportunities than you main income source one day. My blogging side hustle became my full time career.

Of course, if you just got a part time job delivering pizzas, you might want to consider dropping that if you don’t enjoy it. However, if you started a side business or have found a side gig you’re passionate about, don’t give it up.

Now that your most painful debts are gone, you have more options than ever.

Paying Off Debt Wasn’t A Goal

As my friend Joe Saul-Sehy from Stacking Benjamins would say, paying off debt is not a goal. That statement makes a ton of sense once you really think about it.

Paying off debt is a milestone in your life, but it isn’t the ultimate destination. Why is this important? You should still be working toward your actual financial goals now more than ever.

The money you once dedicated to destroying your debt is no longer obligated to paying other people back for your past purchases. It’s now available for you to move further along with your life goals.

Unfortunately, some of these life goals, like retirement, are so monstrous that we don’t even see them as goals. Instead we see them as insurmountable challenges.

Channel Your Debt Money Into Bigger Goals

Instead of increasing your spending or quitting your side gigs, channel your debt repayment money into goals that matter to you.

Is your emergency fund in good shape? Are your retirement accounts where they should be? If the answer is yes, good for you. 

Just make sure all aspects of your financial life other than debt are in good shape before you start increasing your spending again. Getting out of debt is just step one on a long journey to financial independence.

You’ve worked hard to change your financial lifestyle. This is just the beginning. Continue to live responsibly. If you do, money worries may soon be a thing of the past.

Focus on the big goals. Don’t forget about your retirement. Keep pushing yourself down the path to a better financial future.

What do you plan to do with your debt money once your debt is paid off? I’d love to hear your plans in the comments below.

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About Lance Cothern

Lance Cothern, a Certified Public Accountant (CPA) licensed in the Commonwealth of Virginia, is the founder of Money Manifesto. You can read more about him here or connect with him on Facebook, Twitter, Google+ or Pinterest.


  1. I’d like to start saving up a deposit for my own place as I’m currently living at home. I’d also like to set up a holiday fund so I have something to look forward to every year.

  2. We are debt-free and have been for years. We have added a few expenses back into our lives, but nothing extreme. Our frugal lifestyle helps us save a lot and I have no desire to change that. I wish we would find ways to earn more money but there are only so many hours in the day.

  3. I am going to fund a few retirement accounts immediately, then with about 10% of my pay I am going to just enjoy life with experiences. Extra vacations here and there is good for the soul.

  4. When we paid off our debt last year, at last we are free! And now we are building our emergency funds and searching for a good business to start. But I’m still living a frugal lifestyle even if we are living a debt free life.

  5. I’m going to be coming out of school just shy of $80K. I’m going to be 32 when I finally start paying of my debt. Just reading these posts have given a little hope in darkness looming ahead. Growing up I seemed to have been force fed that consumer debt is OK. I don’t like the idea of living frugally being that I’ve pretty much lived that way my entire life, just to survive. I suppose that will aid me in the future as I will already be used to it. Putting off that thought of buying a car or a house that I’ve never is a little discouraging, but getting out a debt is a lot better than increasing it or worrying about it until my death.

    Thanks for the great posts. I can’t wait to put them to use and hopefully get myself out of debt before I’m 35 so I can live life with one less worry.

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