28 Jun
2010

Once your debt settlement or debt relief program is over, you need to continue to work to stay out of debt. However, many creditors run up debt almost immediately after getting debt free. A few basic mistakes are what are most likely to thwart your good intentions:

1) Returning to bad habits. While you are part of a debt settlement or debt relief program, there is someone watching over your shoulder and making sure your bad habits (such as overspending or impulse buys) don’t derail your debt repayment plan. Once your work with a debt settlement or debt relief program is over, however, you are free to return to your usual bad habits – and run up a big debt again. To counteract this, good budgeting and careful record keeping can help keep you on track.

2) Stopping financial reviews. When you are part of a debt settlement or debt relief program, there is someone forcing you to look at your spending, debts, credit score, and other financial facts. Once you are on your own, though, you can go right back to denial – which can mean that your finances get out of control quick. To counteract this, create at least a monthly review of your finances and sign up to receive your credit report at least once every six months.

3) Not having a “stay debt free” plan. To stay out of debt, you need to have a plan. This means having long-term and short-term financial goals and having a budget for every month to keep you on track. Regular contributions to an emergency account can help, too.