Congratulations on wanting to pay off your debt. That likely means you’re serious, which is the attitude you’ll need to meet your goal. You’ll also need heavy doses of discipline, persistence, and patience. After all, according to a recent Northwestern Mutual study, just 32 percent of U.S. residents have no major sources of debt.
If you need to be reminded why erasing your obligations is a worthwhile endeavor, here are reasons why you should pay off your debt.
You Can Buy the Things You Enjoy
This may sound counter-intuitive, since the idea is to eradicate debt, not create more. However, once you clear your debts, you’ll have the wherewithal to purchase what gives you joy. Going into debt to pay for things ultimately leaves you with less cash to spend on what you want, since you’re busy paying debts.
You Boost Your Financial Security
You can’t squeeze the most from your money if you’re always in debt. After all, the cash you put on debt payments could go to your retirement account, pay for college, or even be saved for a “rainy day.” Get that debt out of the way once and for all so that you can focus on financial security.
It Streamlines Bill Paying
When you’re in debt, you likely have a myriad of bills coming in with various payments and due dates. Aside from monthly expenses such as your rent or mortgage, cell phone, and utilities and the like, becoming debt free means you’ll have fewer bills to keep track of.
It Reduces Stress and Anxiety
All those sleepless nights, tossing and turning? You won’t have any more bill-related stress and anxiety once you pay off bills. Peace of mind is truly priceless.
It Boosts Your Credit Score
If you have high credit card balances compared with your credit limit, your credit score will reflect that. The same is also applicable if your loan balances are up there, when compared with the original borrowed amount. So, just as excessive debt hurts your credit score, becoming debt free can raise it.
It Helps You Lead by Example
Your children are watching and listening to you, even if you aren’t aware of it. Of course, you want your offspring to stay out of debt. So, let them hear you discuss the importance of paying off debt, then see you deliberately going about doing it. They’ll follow suit when they grow up. Go to www.achieve.com for help with paying off those obligations so that you can be a good example.
You Own Your Stuff
Let’s be real: if you’re making payments on your house or vehicle, you don’t own these assets – the banks do. Whatever you pay off, you own free and clear. That takes away any concerns about repossession or foreclosure.
Boost Your Future Earnings
Every time you get a loan or put a purchase on plastic, all you’re doing is borrowing from your future earnings. In other words, the $500 or $200,000 you spend today will be extracted from what you earn later.
The cold fact is that debt reduces your standard of living. How? By providing you with less to work with than what you have now. Becoming debt free means maximizing the money you expect to earn.
Give Lenders the Boot
The bottom line is that if you owe, your lenders call the shots about your money – not you. That may be a hard pill to swallow, but it’s true. Your lenders decide how much your payments will be, and when your payments are expected. There may even be times when your lenders, with under two months’ notice, will raise your minimum payment and interest rate. You want to control your money? Pay off all your debts.
Now that you have a host of valid reasons why you should pay off your debt, don’t delay. There’s nothing like taking charge of your own money – and the rest of your life.