Wondering if paying off your debt is worth the effort? In this article, we’ll go over 10 major benefits to being debt-free. These benefits can be life-changing as you work toward the financial freedom that comes with having no debt.
Sense of Peace
When you get rid of your debt, the stress of having to make debt payments and juggle finances is gone (or significantly reduced). You can breathe easier, knowing that you have a plan to take care of your finances and start creating a solid savings account. This peace can lead to better sleep, better relationships, and even a more positive outlook on life.
Plan for Future
Dropping your debt can help free you up to think about other things, like your future! When you have no debt, you are able to identify goals like buying a house or car and then work toward saving for those goals. If you were still paying off your debt, this would likely not be something that you could afford to do.
Improved Credit Score
If your debt has gone unchecked for a long time, your credit score has likely suffered. As you pay off debt, your credit score could improve as you settle your accounts. An increased credit score will not only give you a renewed sense of pride in your financial status, but it could also help you qualify for a loan for something like a house or car.
Knowing that your family is protected from a financial crisis is a high priority for many people. If something were to happen to you, you would want to make sure that your family isn’t negatively impacted by any debts you have.
Money to Invest
Getting rid of debts can also help free up funds to be able to invest. Investing can be a great way of growing your wealth as it can provide you with passive income in the future.
Teach Children Good Money Habits
Children often pay more attention than you would think to your money habits. If you struggle with overspending on clothes, that might be a habit that your children pick up. Being able to show your child how rewarding it can be to live a debt-free life might just teach them good money habits.
Balance in Life
Once your debts are settled, you no longer have to spend all your time finding ways to make payments on your debt. Instead, you can enjoy the benefits of your hard work and use that extra time to practice a hobby, spend time with your family, and invest in yourself.
Prepared for the Unexpected
If something happens that requires an urgent financial expense, like a car accident or severe illness, you will be able to handle it because extra money was saved in your emergency fund rather than being used to make payments on debt.
Build Up Savings
Building up your savings can help you plan for expected purchases in the future and also help you recover from unexpected expenses, like the ones mentioned above. You can use your savings to make large purchases like a new computer or even to repair your car, if an expenditure like that becomes necessary.
When you have more disposable income, you are able to help those in your community financially. Reducing your debt can help free up your finances so that you can give to causes that you care about.
How Can CreditAssociates Help?
If you want to feel the benefits of being debt-free, let CreditAssociates help! Our certified debt consultants specialize in negotiating with creditors to help our clients reduce what they owe—sometimes by up to 50% or more! Reach out today to see how we could help.
Common Questions About Debt:
Is it bad to have no debt?
Having some debt could be good for building your credit. But, having too much debt can hurt your credit. Having no debt could be a positive thing, but could also raise red flags when applying for loans as lenders generally want to see credit history.
What if I can’t afford to pay off my debt?
If you can’t afford to pay off your debt, we recommend working with a debt settlement company. They can negotiate with your creditors and could help you become debt-free for less than you owe. Bonus? Reducing what you’re required to pay back could also help you become debt-free quicker.
Is debt good or bad?
While debt often gets a bad rap, it really is delinquent debt that is bad. Having debt through a credit card can help your credit if you’re able to keep up with the monthly payments or pay it off in full each month to avoid the high-interest rates and penalties.