It is so easy to get into debt. Many people get into debt at the age of 18 with student loans. Throughout our life, we add a mortgage, car loan, and credit card debt to this list as well. Most of our paychecks are going towards paying off these things, with additional money being added to our debt as interest. We think that debt is something we cannot avoid or is impossible to pay off, but many people have adjusted their lifestyles to become debt-free.
There are benefits to cutting back your spending and paying off your debt. Being debt-free gives you a lot of freedom with your income. When you are paying back your loans, a certain amount of your paychecks must go to those loans. Paying back your debt means putting extra towards these loans and not giving you much wiggle room with your income. However, once you repay these loans, all of those monthly payments are freed up. You can save more towards your financial goals and pay things in cash instead of paying off your debt.
Being debt-free also gives you less stress and worry. With the state of the world and a constant worry of rising costs of gas and other goods, there can be added pressure about where you’ll find the money to cover your life and your bills. Being debt-free is one less thing you’ll have to worry about. You won’t have to worry that you cannot pay back your debt and cover your cost of living.
Paying off your debt will also give you the discipline and habits to be more financially responsible. Taking the initiative to pay off debt, reduce your spending, and possibly have a side hustle gives you a particular appreciation for being debt-free and wanting to stay that way. It flexes a muscle you may have never used.