Regular trips to the beach and more fun nights with friends could be yours if it weren’t for debt. Paying off debt is a huge pain. It makes you feel like the money that you work so hard for doesn’t really belong to you. When you already have to sacrifice so much to make ends meet, debt certainly doesn’t help. Once you finally pay off your debt, though, it will feel like finally crossing the finish line after a marathon. To help you get motivated to pay off that debt, here’s a list of 10 benefits of being debt-free!
One of the main benefits of being debt-free is simply having more freedom in the way you spend your money. When you’re not paying off debt, you can do so much more with your income. Here’s how:
One of the first and more immediate benefits of being debt-free is having more money to play around with. Paying off that car or mortgage means that the money you’ve budgeted towards it will finally be freed up. Instead of adding that money to your leisure fund, consider getting…
Having spent a while paying off that debt, you’ve already taught yourself to live without needing that extra money. After you’re debt-free, you can instead invest that money and earn even more in the future!
Don’t know where to park your funds? How about a retirement fund, like the Roth IRA! You can read more about it in my blog post here.
It’s always good practice to build up your savings. When you’re debt-free, you can place even more money into your bank account in case of a rainy day.
Whether you’re saving or investing your extra money, make sure you’re doing something with it. Your extra funds should always be budgeted towards a particular budget category, like savings, leisure, or necessities like food. Check out my article on the zero-based budget if you want to learn more.
You’ll be entitled to a better credit score if you’re debt-free because you’ve paid off a debt. That means banks will trust you even more when paying back future loans. This means you can ask for bigger loans and even better interest rates!
Most people want to build credit so they can buy a house. If homeownership is one of your financial goals, check out my article on what it takes to buy a house!
The benefits of being debt-free don’t stop at your bank account. There are quite a few mental benefits that come with beating debt. Here are a few:
After living in debt for years, being debt-free is a huge weight off your shoulders. When you don’t have to worry about the next payday, you can spend more time enjoying life.
Paying off debt is stressful, so you have to do it in small steps. Check out my article on baby steps to eliminating debt!
When you’re worried about finances, it can be easy to forget the people who really matter in your life. When you’re debt-free, you’ll have more energy to spend time with the people that you love.
If you’ve worked your way out of debt, you should feel proud because paying it off is no easy feat. It might’ve seemed impossible at first, but you still powered through and did it. It shows just how resilient you are, and it can affect other parts of your life.
You might not have expected this, but the benefits of being debt-free can affect your body and health too! Here’s how:
People in debt tend to be a lot more stressed, which can affect diet and eating habits. A 2009 study showed that Americans significantly in debt were 2.5 times more likely to be obese. There are quite a few reasons for this: fast food is cheap and delicious but incredibly unhealthy.
Being debt-free means having more money to spend on real, nutritious food or the time to cook it. Check out my guide here!
You’ll have better quality sleep when you’re less stressed because of your finances. This is one of the benefits of being debt-free that nobody ever really thinks about.
In general, everything about your life will feel so much better after paying off your debts. You’ll feel freer because you are! After spending so many years paying off debt, you deserve to feel good about life.
Absolutely! Coming from someone who paid over $169,000 in credit card debt, no other feeling comes close to being debt-free. There are so many benefits to being debt-free that it’s something worth working towards.
While it’s good not to have debt, it may be better to live with it, as long as it’s for the right reasons. For example, if you need a car for work, it may be worth taking an auto loan. If you want to pursue higher education for a new career, it could also be good to take a student loan.
There isn’t a “right” age to be debt-free since everyone lives a different life with different priorities. A 25-year-old could be debt-free but have no car and have to commute everywhere. Meanwhile, a 50-year-old could have thousands of dollars in debt but have the means and plans to pay it off in the next few years.
However, you will want to be debt-free when you’re at the retirement age of 60. You wouldn’t want your golden years to be spent figuring out how to pay your old loans.
You can work towards being debt-free right now! Join the money squad, and you’ll receive personal finance tips from me every week! The best part? Signing up takes less than a minute and is 100% free!
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Dollars Makes Cents by Shaquana, Financial Coach and Wealth Expert, resources helps professional millennial women of color with the tools and skills they need to eliminate their debt, amplify their savings, and build generational wealth — without having to compromise their lifestyle.
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