Paying off debt can be hard. Trust me, I know. I found myself over $50,000 in debt in my mid 20s. Actually, I was only $20,000 in debt. I didn’t see a problem with being in debt, so I didn’t do anything about it. I kept spending money I didn’t have and making minimum payments and I thought it was all fine and dandy. Until it wasn’t.
At 29 years old and after the market crash, my cushiony bank job wasn’t so secure anymore. Suddenly I found myself with an income that wasn’t so secure and faced with a mountain of debt.
I had no idea where to begin paying off my debt.
$50,000 is a lot of money to have without anything to show for it. Short of declaring bankruptcy, I didn’t know what to do. Then it hit me.
I sat down and I created a budget. This allowed me to see how much money I could put toward my debt each month. With no stable income at the time, this was a small amount.
I calculated how much debt I had. From there, I set up a debt snowball plan to help me finally get out of debt for good.
As I started making more than the minimum payments I saw my credit card balances going down. I stopped spending and started to see the light at the end of the tunnel. I finally began picturing my life debt free. That was all the motivation I needed to keep going.
I knew becoming debt free wouldn’t happen overnight, but for the first time in many years I actually believed that one day I would wake up and not owe any money to anyone.
That was a big relief to say the least.
Are You In Debt?
If you’ve ever been in debt, you know exactly what I’m talking about. Money troubles are the thing that kept me awake at night. It was always the one and only thought in my mind every day, all day.
The guilt of spending money when you should be putting it toward debt payments is unbearable. But life doesn’t stop just because you have debt. The day I could finally spend money without worrying was definitely a huge relief.
True financial independence comes when you choose what you want to do with your money instead of letting your money dictate how you spend it.
I am so proud of my debt free living. That’s the reason I share my story with others. In fact, it is one of the two greatest accomplishments of my life. The other is achieving my certification as a personal financial planner.
If I can help even one person avoid making the same money mistakes I made all my troubles will have all been worth it.
9 Reasons To Imagine A Debt Free Life
If you have debt or have had debt in the past, you know how it controls your life.
Stress, embarrassment, uncertainty.
Debt causes all these feelings. It’s not fun being in debt. Instead of worrying about how you will get out of debt, let’s focus on the benefits of being debt free.
#1. Improved Health
When you are in debt, you experience a lot of stress. How are you going to make ends meet? What if you lose your job? What household repairs and upkeep? It’s a proven fact that stress does shorten your life. As a result, the less stress you have, the healthier you will be.
By paying off your debt, you immediately remove a huge amount of stress from your life. No more worrying about the bills coming in the mail. No more sleepless nights trying to figure out how you will make ends meet. All this leads to a longer, happier, healthier life.
#2. Better Outlook
When you have the weight of debt hovering over you, you see the bad all around you. Your mind is filled with negative thoughts and you see your life as a wreck.
When you start living debt free, your outlook reverses and you have a positive outlook on life. You start seeing things in a positive mindset. You see great things for your life and you’re more apt to push through things.
#3. Stronger Confidence
When in debt, you doubt your abilities. You wonder how you will cover the bills each month or how you will ever afford Christmas presents. Simply put, you lack confidence in yourself and your abilities.
The good news is that your confidence grows as you overcome obstacles. Paying off your debt is a huge obstacle to overcome and when you do, you will be prouder and more confident because of it.
You will walk around with a new sense of pride. You will believe in yourself and your abilities, constantly increasing your confidence.
#4. Personal Growth
As your confidence rises, you doubt yourself less and less. When a new challenge comes along, you won’t think that you can’t overcome it. You will know that you can. You will be growing as a person, bettering yourself all the time.
I know for me, when I overcome a big challenge, I feel like I am Superman and can take on anything the world throws at me. I accept challenges that I otherwise might shy away from. This makes me a better, stronger person than I was before.
#5. More Success
The final benefit of paying off your debt is more success. As you begin to pay off debt, you achieve success. This leads to your confidence growing and you growing as a person. You will then be motivated to try more things and experience more and more success. The more successful and financially secure you become, the more the cycle repeats itself, and that’s a great cycle to be in.
At some point in this repeating cycle though, you are going to fail. Will everything come crashing down? Hardly. With your new found confidence, a setback won’t matter to you. You will see it for what it is, a bump in the road, and you will push through it.
#6. Financial Advantages Of Being Debt Free
Up until now, the benefits of being debt free have been more emotional, but there are some great financial advantages to being debt free.
The first is a simpler financial life. Think about your life now as you live in debt. You worry about what bills to pay first or when you are getting paid next. You even spend time wondering about choosing to save for a vacation or putting the money towards your debt.
All this worrying takes up a lot of your time and energy. Now imagine life without debt. These questions and worries are gone. Your biggest concern now is whether to save your money in a savings account or invest it in the stock market.
#7. Reduced Cost of Living
When in debt, you have to earn a lot more money each month to pay for your needs and still make your debt payments, but debt free living means you can earn less money and still be able to live happily and save money.
This can lead to more happiness. You might hate your job but be stuck in it because you need the income to cover your needs and debt payments, but if there is no debt, you might be able to change careers and do something that excites you and pays you less.
#8. More Choices
Life without debt allows you to have more choices in everything you do. By having money saved, you afford to experience more life has to offer.
You can take advantage of opportunities too. When opportunity knocks, you can take advantage of the offer. This is because your money isn’t tied to paying off debt.
#9. Ability To Achieve Financial Independence
When you live debt free, you increase the chances of being able to afford retirement. With fewer living expenses, you need to save less to cover you during your retirement years.
If you are buried in debt, you might not have been able to save enough to retire, but without debt, you now have hope.
The benefits of living a debt free life are immeasurable. If you accept the challenge to get your financial life in control, the world is yours. The increased confidence and personal growth will take you places you never imagined.
Who doesn’t want to experience the best of life? Accept the challenge of life without debt and start enjoying a life of debt free living.
Don’t be like the 20% of people who believe they will never be able to live debt free. You can do it. You just need to take action and stay positive and remain focused.
Here is your guide to living debt free.
The first step is getting your spending under control. That all starts with a budget. Look at a budget as a tool to help you become free of your debt, not as depriving you of spending. If you enjoy working with spreadsheets, check out 10 free spreadsheet templates to download. If you want to use a program to help you budget, check out You Need A Budget.
As you create your budget, you may need to cut out some spending so you can put the most money toward your debt. Read my post on cutting monthly expenses for some great tips to slash your spending.
The third and final step is all about commitment. It will take time to get out of debt. Remember, you didn’t get into debt overnight and you won’t get out of debt overnight either.
The journey is long and you will want to quit. Because of this, you need to enlist the help of a friend. Tell them about your goals and encourage them to check up on you. Additionally, create milestones for you to celebrate when you reach your goals.
For example, once you pay off $2,500 worth of debt, treat yourself to a nice dinner. Doing this will help to keep your spirits high. You can do this over and over again as you continue to pay off debt as well.
Finally, check out my Debt All Stars. These people were in debt just like you and now live debt free. They did it and so can you.
Author Bio: This post is courtesy of Tahyna Kristina. She got herself into debt trouble – while being a financial planner – dug herself out and now enjoys debt free living. Learn from her debt experience so that you don’t repeat the same mistakes she did. Be sure also to check out her site, Tahyna Kristina.