Living debt-free is very rewarding, but it can also be frustrating. When you’re trying to pay off your debt, it’s crucial to remember why you’re doing it, so you don’t feel defeated or give up. Keep reading to learn six reasons why you should strive to live debt-free.
1. Financial security
Although debt is just a fact of life for many people, it keeps you from making the most of your money. When you’re putting funds toward paying off debt, you’re not able to save money for an emergency fund, retirement, or a big purchase (like a house or car). Once you’re debt-free, though, you’ll have more room in your budget and can achieve financial security and freedom.
2. Spend without feeling guilty
Have you ever purchased a dress you really wanted and immediately felt guilty because you could have used that money elsewhere? Or you bought the dress with your credit card because you didn’t have enough money in the bank?
Debt leaves you with less money to buy things you want because you need all your money to buy what you need and pay your bills. But paying off your debt will give you more fun money, so you don’t have to feel guilty the next time you go shopping.
3. Reduce stress
Money is a big cause of stress for a lot of people and a major issue in many marriages. Having significant debt increases your money-related pressure because you’re worried about how you’re going to pay it off and still afford your other living expenses. That constant stress can lead to health issues down the road, so living debt-free can make you healthier.
4. Increase your credit score
Too much debt, especially credit card debt, can negatively impact your credit score. The closer your cards and loans are to their limit, the lower your credit score will be. A lower score leads to higher interest rates or being denied a mortgage or car loan. But by managing your debt and paying down your loans and credit cards, you can raise your credit scores.
5. Increase your future earnings
Taking out a loan or paying for something with a credit card is essentially borrowing from your future income. When you’re in debt, you’ll have less money to live on in the future because you have to pay off what you borrowed plus interest.
My husband (Drew) and I are working toward being able to live entirely on one income to provide the best possible life for our future children. If it weren’t for our debt, we would have achieved that goal a few years ago.
6. Be able to give to those in need
When you live debt-free, you’ll have more expendable income that you can give to your favorite charitable organizations or friends and family in need. Spending money to help others is one of the most rewarding things you can do. You’ll feel great knowing your money is helping improve someone else’s life or making the world a better place.