If you are reading this article, there is a good chance that you are on your debt free journey or you are thinking about starting one. You might be wondering what the benefits of debt free living are.
My husband and I have been living a debt free life for over fifteen years. Do we have everything we want, when we want it? Of course not.
Debt free living has nothing to do with your income. It is choosing how you spend the money you earn and taking charge of your financial decisions.
Below are 5 benefits of debt free living
1. Debt Free = Less stress
IMAGINE:
- Opening your mailbox or email and not finding any bills other than your standard living expenses?
- Not worrying if there is enough money in the bank account to pay your bills?
- Handling unexpected expenses with ease. The once frantic feeling is now more of an inconvenience.
The pressure and stress of paying current bills are gone. Of course, there are always bills to pay but it reduces significantly.
Your income is no longer allocated to consumer debt. Therefore, giving you the opportunity to have a healthy savings account for unexpected expenses.
We all have experienced unexpected expenses in our life. Car service (this can be expensive), medical bills, taxes we were not prepared for, a sick friend or family member you need to visit, your kitchen needs to be replaced (yes, that happened to us – HUGE expense), you lose your income source. Do you get the idea?
Wouldn’t it be less stressful knowing that you have enough money saved up for these unexpected expenses?
2. Better spending habits
When you implement your plan to pay off your debt your spending habits naturally adjust. Although this is difficult in the beginning it gets easier as you stick with it.
Living debt free is a lifestyle choice. Your spending habits are the choices you personally make in order to maintain it.
Better spending habits help you evaluate your values and what is important to you. These habits also teach you about patience, which is more difficult in the age of instant gratification.
If you share financial responsibility with someone else, I suggest finding a system that both of you agree with. As well as working toward a common goal, allows learning together and realizing the values of both.
My husband and I had a weekly allowance while on our journey. Once we spent it, it was gone for the week. We became more conscious of our spending. The habits we built through the process stuck with us.
Because we had the same goals, we were motivated to succeed together, ultimately strengthening our relationship.
3. Rapid increase in savings
Once you are debt free all of the money you allocated to paying your debt is available to spend however you want. Start socking it away into a savings account or start investing in the market. You will get paid interest instead of paying interest.
Do you have a big ticket item in mind? Save for it and buy it in cash. If you are looking to purchase a home you will have that down payment quicker and will be more likely to qualify.
Money is available for holidays, birthdays, starting a business, children’s activities, school, and whatever you want. Believe me, it builds up much faster than you imagine.
Think about this for a minute. Let’s say you are paying $3500 per month combined in minimum payments and you are able to pay an extra $2500 per month. — I really have no idea what to put for these estimated numbers since everyone has different numbers so I just pulled something out of the sky for example sake.
In this scenario, you are paying $6000 per month toward your debt. Once your debt is paid off, how much money do you have now for savings, spending, or whatever? You have $6K per month. That is $72,000 per year
| Loan minimum payments | $3,500 |
| Extra payments to Loans | $2,500 |
| Total payments | $6,000 |
| NO DEBT SCENARIO | |
| Savings/Investments | $6,000 |
| # of months | 12 |
| Total Annual | $72,000 |
WHAT? COULD THIS BE TRUE?
Well, with the numbers I gave you, yes. Plug your own numbers in to figure out your actual amount but I think you will still be pleasantly surprised with the result.
Doesn’t an increase in savings sound like a benefit of debt free living?
4. Choices
You have choices!! Income is still needed but what if you earned it doing something that you love? Something that is meaningful for you?
What about the option to send your kids to private school or college if that is important to you? The option to travel more? Remodel your home? Open your own business? Enjoy more hobbies?
Sometimes just knowing you have choices is enough to empower you. Does this sound like another benefit of debt free living?
5. Fun
Don’t misunderstand this one. You can be in debt and still have fun. I encourage fun at all times However, living debt free means you will not continue to pay for the fun you have for months or even sometimes years.
Isn’t it great to go on a wonderful vacation or to pick up the tab once in a while? How about doing something spontaneous that is a bit out of your normal spending range?
Choosing a debt free lifestyle means that you have money set aside for these fun adventures, whether planned or spontaneous and you can enjoy them knowing that you will not be getting a bill for them the following month. You’ve paid for it and now you are ready for your next adventure.
There are so many more benefits I can think of but then this post would just go on and on and on.
What are your thoughts? Are there any benefits you can think of? Do you have comments about the benefits listed in this article? Have you been through the debt free journey or are you just starting? Maybe you are still thinking about it?
Below are a few related articles that might interest you
FINANCIAL FREEDOM AND DEBT FREE LIVING – 3 STEPS
Thank you so much for taking the time to read this.
Stay balanced
Jill