BENEFITS OF LIMITING DEBT IN YOUR LIFE
You can hear the audio version of this discussion on my podcast at Lola’s Frugal Life Podcast, on Apple Podcast, and many other platforms!
HOW MUCH DO YOU NEED TO LIMIT DEBT?
Limiting or eliminating debt means different things to different people. Some people want to have literally no debt at all, including no mortgage. Others are OK with a mortgage, but that’s it! I think that most of us would prefer to have no credit card debt and no student loans. Car loans are ok for some and not for others. The most important thing is that you decide what level of debt you are comfortable with for your life and make sure that you do not exceed that.
BECOME YOUR OWN EXPERT
There is no right or wrong answer. There are many who claim to have the right way to do things. I have learned a lot from many financial experts about debt and getting out of debt. They all have a lot of information to share, and much of it is extremely beneficial. When you don’t know where to start and need a game plan to get your debt under control, following a roadmap set out by an expert can be a huge help. There were times when I felt like I had to follow their plans exactly as they intended them or I was doing it wrong. At those times I was super excited about making sure I followed specific plans exactly as they were written.
As I saw progress and was able to get out of debt (except I do have a mortgage and car loan), I started to realize that I had learned enough to make my own decisions. I could pull from those experts what worked for me and leave behind what didn’t. Do your research and learn as much as you can, and then become the expert on what works best for your life.
DEBT DOES NOT HAVE TO BE A WAY OF LIFE
So many of us grow up hearing the message that debt is just a part of life. Instead of doing everything we can to avoid debt, we consider it unavoidable and which can make us much more willing to take it on. If you truly believe that you will always have debt, there is not much motivation to do things to avoid it. There are so many motivating stories out there of people who have changed their lives by deciding they were no longer going to use debt as part of their everyday life. We often see people at similar income levels to us having and doing things that we can’t seem to afford. Often times they are using debt to pay for those things. So, it’s so important not to compare what you have to what others have. Maybe they really can afford it, but maybe they really can’t.
LESS DEBT EQUALS LESS STRESS
The more we can lower our debt burden, the less stress we will have in our lives. Owing money to anyone causes stress because you always have that obligation to take care of before prioritizing other things you would like to put your money towards. If a car breaks down, or a medical emergency comes up that creates an unexpected expense, the debt payments still have to be made. Having debt payments to make gives you one more thing to worry about when you are dealing with other financial emergencies. Often it is these financial emergencies that cause us to go into debt in the first place. That is why it is so important to do what you can to build up an emergency fund.
INCREASED SAVINGS
When you don’t have debt payments to make you can use that money to save up for various goals you may set for yourself. You can increase your retirement savings, start or add to your emergency fund, save for a vacation, or just put aside some fun money to use for whatever you choose. When we take on debt, we often feel like it won’t have much of an impact because we can afford the monthly payments. But, if you consider what you could do with that money being available to put into various savings goals you might think differently about taking on those monthly payments.
Often when we use debt we don’t make the best financial choices. It’s very easy to just swipe a credit card to make a purchase. But when you pay with cash or a debit card knowing that the money will come right out of your account immediately you make think twice about your purchase. This helps increase our savings also because you will likely make fewer impulse purchases.
MORE ENJOYMENT IN WHAT YOU HAVE AND DO
When you make a purchase or take a vacation using money that you actually saved up for that particular purpose you will enjoy it so much more. I’m sure many of us have been on a great vacation and while swiping the credit card had that anxious feeling hit us not knowing exactly how we would pay this bill after returning home.
It is a totally different experience to have a vacation or make a special purchase when you have the actual cash to pay for it. There will be no bill coming in the mail later that you will have to figure out how to pay. Plus it’s fun to save up for something. It’s exciting to decide something that you want to save up for and see the amount start to accumulate over time. It helps keep you focused on whatever it is you are saving for which is all part of the fun.
FREEDOM IN YOUR LIFE
The less debt obligations you have, the more freedom you have in choosing how you want to live. You can have more flexibility in the career you choose if you don’t have large debt payments to make. People often get stuck in jobs they don’t really enjoy because they won’t be able to keep up with the debt they have accumulated without that large paycheck. When you are able to save up money each month instead of making payments with what you earn you can put that money towards what you value in life.
Thanks so much for checking in! If you would like to hear the podcast version of this topic to check out Lola’s Frugal Life Podcast! Also, be sure to check out my other blog posts on this site!
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