You will most likely have some debt in your name at some point. When the debt accumulates, it will not only cause a negative score on your credit card but also your mental health and relationship with family and friends. But once you learn the benefits of debt-free living, you will strive to repay any accumulating debt to enjoy these benefits.
Living a debt-free life will positively impact your health, relationship with family, and psychological issues. However, achieving a debt-free life will not happen overnight; you will have to make strict choices and abide by them no matter the challenges. The benefits of debt-free living are very evident, and you will be glad you made those tough choices.
A review distributed by FINRA 2021 noted that the absence of assets, high amounts of loans, and poor money management contribute to monetary stress and anxiety. Let’s dive into the many benefits of debt-free living with that in mind.
More Financial Freedom
Every penny you get is channeled to debt repayment when you are still tied into debt. The freedom to use your money is not there, as you only spend what is left after the most significant percentage is used to repay the debt.
If you live a debt-free life, you have more financial freedom as you can choose what happens with your income and how you spend it. You can do fun things like going out with friends or eating out without worrying about an unpaid debt.
When living a debt-free life, you have less to worry about unpaid debts hence reduced stress. You now have a straightforward way to pay your bills without worrying your entire income will be channeled to debt repayment.
Debt can make you have anxiety disorders and uncontrolled stress. You are always worried and on the verge of breaking as you wonder how to get the loan repaid and still cater for your bills. Debt can take you through an emotional turmoil that is not good for your mental and emotional health.
Living debt-free means you have more income hence increased savings. With the debts out of the way, you now have more money which you can direct to your savings account and plan your retirement early.
You can have an investment fund to plan and build your future and an emergency fund to manage emergencies. These plans would not be possible with debts choking you.
Improve Your Credit Score
Debt repayment and living a debt-free life will improve your credit score. When you pay off your debt, you are assured of a positive credit record, which boosts your future borrowing and rebuilds a good relationship with the lenders.
Loans, especially credit card debt and payday loans, can negatively impact your credit record. The more loans you have, the more interest rates you must pay, and achieving a positive credit score is almost impossible.
When you live a debt-free life, you realize that you have good relationships with your family and friends. They know you are financially stable and can be relied upon, and the connection comes naturally.
However, when you have debts accumulating in your name, many people will not want to be associated with you because soon you will borrow money from them. When you cannot pay them as agreed, hatred chips in, and family battles occur more often. Your family will abandon you since you can’t take care of the bills.
Teach Your Family Good Financial Habits
When living a debt-free life, you act as a role model to your spouse and children as you know the benefits. You can teach your family some good financial habits, and they will follow your lead. If you have no loans, they will also try to live debt-free by making the right decisions.
You also have better control over your marriage as you both can trust each other and contribute to the family’s welfare equally without some percentage going to pay debts.
Fewer Bills To Pay
When living a debt-free life, you worry less about the many bills you have to pay. You and your family have reduced bills to pay and can foot the bills with your income without much struggle. When you live a debt-free life, you can cost-share the expenses around the use and not burden one person.
But with debts unpaid, the burden on bills falls on your partner if they don’t have any debts to pay.
You can learn more about this at www.FreedomDebtRelief.com.
Save Up More Money
When you are living debt-free, you get your income complete, and you can save up more money and use it elsewhere.
Some banks have very high interests loans, especially payday loans. You take up some money to be repaid on your next month, and the interest you repay is almost the principal amount. When you refund the money and realize you have less income that cannot cover your bills, you take another loan to help you sail through the next month.
More Time For Yourself
When you live a debt-free life, you get more time to relax and bond with your family. You also will have your alone time to plan your finances and make the right decisions.
With the debts unpaid in your mind, there is limited time as you always want to work more and repay the debt. Your time with family decreases and can bring up family wrangles. You also don’t get enough time to rest as you are constantly worried about how to repay the money. Your mental and emotional health can deteriorate because of too much worry over debt.
When you owe someone some money, you are constantly worried if they will ask for it every time you see them. A phone call from the lender can also affect your mood and attitude for the better part of the day. Even when a new number contacts you, you get anxious as you are worried that it is the lender following up on the repayment.
When living a debt-free life, you pick your calls with confidence, as you know you don’t owe anyone. It also boosts your confidence among family and friends as you can contribute more to the family’s ideas.
How To Ensure You Are Living a Debt Free Life
Debt can be manageable, and you can live that worry-free life. When taking a loan, ensure that you have a repayment strategy to start paying off right away. Before spending on fun activities, pay off your debt first when you get an income.
You can ensure to live a debt-free life by;
- Do not spend more than you can afford. Limit your spending to fit your budget.
- Repay your debt as soon as possible
- Do not take a second debt to repay one debt. Second borrowing will lead to a chain of debts that you will not be able to manage.
- Manage your finances well. Every time you have an income, evaluate your budget and get rid of things you don’t need from the budget.
Debt-free living can positively impact your life, emotionally, physically and of course, financially.