Key takeaways from this article:
Over the course of your life, you’ll most likely come across some type of debt. Certain debts signify positive developments in your life such as going to university or buying a home. However, if you find yourself accumulatingcredit carddebton top of your mortgage,student loanorcarloan, it can start to feel overwhelming. Paying off your debt can have a positive impact on your mental and financial wellbeing as well as improve your relationships with others. We can help you understand how to pay off your debt with ourguide to debt consolidation. But first, consider the following benefits of beingdebt free.
The financial benefits of beingdebt free
More of your income is available to you
The portion of your income that was devoted to paying off debt becomes yours to spend or save as you wish. In short, by paying less, it will feel like you are earning more. Whether you put the money towardsmonthly expensesor something bigger like your next holiday, you can enjoy the autonomy andfinancialfreedomthat beingdebt freebrings.
Less financial risk
If you are in debt without anemergency fundto fall back on, things can get dicey quite quickly if you suffer financial hardship orjob loss. A life without debt gives your budget some wiggle room so that if things go awry, you have a safety net to fall back on that is not tied todebt payments. Beingdebt freealso means that you don’t have to worry about late payment fees, or in a more drastic scenario, losing your car or home.
Improvedcredit score
Paying off your debt can give you a bettercredit scorewhich has many benefits. A highercredit scorecan get you a betterinterest rateon any future loans as well as lower insurance premiums. It can also make you more desirable to employers or landlords who usecredit scoresas a measure of reliability.
Retire earlier
Taking the time to pay off your debt now means you can free up thatextra moneyfor yourretirement savings. Without the obligation of making regulardebt payments, you can put more money into a separatebankaccountfor your futurefinancial goalsand potentially retire earlier than planned.
The mental benefits of a debt free lifestyle
Lessstress
Living with uncertainty about yourfinancial situationcan create a great deal of unwanted stress. Beingdebt freecan alleviate this stress as you will not be preoccupied with worrying about how to pay the bills or suffering a financial shock. The time spent stressing over money can instead be spent enjoying yourself with your friends and family.
Improved mental and physical health
Being in debt can be as much of a headache literally as it is figuratively. Stress can manifest itself physically in the form ofhealth problemssuch as insomnia, pain, high blood pressure or simply feeling run down. When you take care of your mental health, your physical health follows.Becomingdebt freecan reduce anxiety about money and quite literally help you sleep at night.
Higher self-esteem
Those who are in debt may hide the truth from their friends or keep up the appearance of a life that looks perfect from the outside. Living adebt-freelifestylecan release you from this burden and boost your confidence as you experience feelings of pride about yourfinancial situation.
Increased productivity
Debt can have an impact on your productivity as you may be distracted or unable to concentrate due to money worries. When you aredebt free, you have more brain-space and attention-span to focus on tasks. This improved cognitive ability can help with decision making, self-control and, overall, positively benefit your working life.
The relationship benefits ofdebt-freeliving
Be a better colleague
Financialstresscan negatively impact the way we treat others. Anxiousness about debt may present itself as impatience, anger or an inability to actively listen to your friends and colleagues.Debt payoffcan minimise this stress which in turn may improve your ability to connect and collaborate authentically with those around you. You may also find yourself with an increased willingness to help and support those in your friendship and career circles where you may have been unable to previously.
Be a better partner
When one or both parties in a relationship are stressed about debt it can cause irritability and short tempers. Paying off your debt together can strengthen your partnership as you demonstrate that you can overcome obstacles and makefinancialdecisionsas a couple.
Be a better parent or caregiver
Beingdebt freegives you back the time that would usually be spent paying bills, making phone calls to the bank and generally worrying about providing for your family. It means you can spend more quality time with your children and the people in your care and give them your undivided attention. Living adebt freelifecan also improve your mood and your capacity to have fun with those you love.
Where do I start?
As outlined in the above benefits, getting out of debt can positively impact almost all aspects of your life. Read ourdebt consolidationtips or call us forfinancial adviceon132 032and let us help you start the journey towards adebt freelifetoday.
