Living with debt these days has become the norm. But we forget the impact that debt has on our lives, especially when we have too much debt. Studies have shown that mental health and financial health are intertwined. Too much debt can cause unnecessary stress, personal problems and even lead to depression.
While it’s easy to buy now and pay later, few people consider the effect that debt has on their lives. No matter how much debt you have or how hopeless your situation may seem, it is possible to turn things around and prioritise your debt.
Here are 6 ways in which your life can change once you’re debt-free.
You’ll have more money available
Once you pay off all your debt something crazy happens. All the money that you would have paid towards debt each month now becomes your money. With no more debt to your name, you’ll get to experience a full paycheck without the burden of paying off debts.
As a result, you’ll have more money to spend, save and invest as you wish.
Get a good night’s sleep
The emotional toll that debt has may lead to additional worry, stress and sleepless nights. The emotional stress has likely built up over months and years. As soon as you’re debt-free all of that changes.
When you’re debt-free, you won’t have to worry about overdue debt repayments, high-interest charges, or monthly living expenses. With no more debts to worry about, you’ll have fewer monthly expenses and an increased personal cash flow. That means you’ll have more money available for additional monthly living expenses like groceries, school fees, insurance, mortgage/rent etc.
When you finally become debt-free you’ll feel the power of financial freedom.
Improve your credit score
When you’re under financial pressure to pay off your debt, your credit score will start taking a strain. If your debt accounts start defaulting or if you miss payments, your credit score will be negatively affected.
With no more debts to worry about you can rebuild your financial situation. You’ll finally have an opportunity to start rebuilding a healthy credit score and start earning the benefits of a good credit score.
Reach your financial goals
Getting yourself out of debt will most likely be your primary financial goal before becoming debt-free. Once you’ve paid off all your debts, your journey towards becoming debt-free comes to an end and a new financial chapter begins.
When you’re finally debt-free you can start working on new financial goals that are a lot more fun and exciting than paying off debts. You can start saving for retirement, save for your kids’ university funds, save up for a mortgage deposit or even a vacation. Your options are endless.
You’ll finally have the freedom to make financial decisions based on what you want.
You’ll have more options
When you’ve paid off all your debt your life will change for the better. You can start taking more risks that you previously couldn’t have. You can change careers if you want to, even if that means you’ll take a pay cut, or you could pay for further education. You could save up and retire early or start a business. You have an endless supply of options.
Becoming debt-free gives you the power to do what you want.
You’ll start avoiding debt
When you finally become debt-free, you’ll reflect on your achievement and start realizing how much money you’ve spent on debt. Every debt repayment you’ve made over the years could have been used more effectively. Becoming debt-free gives you a unique perspective about how money and debt can be used differently.
You’ll have a stronger option about and chances are that you’ll never want to be in that position ever again. You’ll likely do what you can to avoid debt or at least use debt to your advantage.
If you are struggling to afford your monthly debt repayments while trying to cover other monthly living expenses, you may be over-indebted. If you wish to become debt-free, take control of your financial situation before it’s too late. Leave your contact details in the form below and one of our consultants will assist you shortly.