Hi, my name is Adam Stewart, Debt Collection Expert and owner of ADC Legal Litigation Lawyers.
Debt is a concept that just about everyone struggles with at some time or another. As soon as you are old enough to apply for a credit card, the allure of a new shiny object is often much stronger than the idea of paying it off with interest. We have all fallen for that trap to one degree or another.
If you want to keep momentum in your debt repayments, you have to continually remind yourself of the reasons you want to get out of debt. How will paying off your outstanding bills benefit your life? What are the things you can do when you are debt free? How will it feel to be debt free?
If you’re stumped for debt payoff motivation, here are six reasons you should be debt free:
1. I will increase my financial security
The number one reason you should pay off your debts is to give yourself financial security. This is something I struggled with all throughout my youth and it was not until I was well into my thirties, that I became financially reliable and secure. I still have debt, but I no longer have the fear of financial insecurity, which used to haunt me. Debt can be a serious threat to your financial security and sense of well being. Once you become debt free, you’ll be able to work towards becoming financially secure.
2. I will have more money to spend on the things I enjoy
Once you have taken care of your debts, you can then spend the money on stuff you really like. The money can be spent without that horrible guilty feeling you get when you still have debt hanging over your head. Don’t forget to pay the debts off first before it’s too late.
3. I will reduce the stress in my life
The main reason I am now debt free is that I always had a constant fear of financial insecurity hanging over me. This fear was completely unfounded and simply not based in truth. Debt can lead to extra stress as you worry about how you’re going to cover all the debt payments and other living expenses.
4. l will save money on interest charges
The most obvious reason to avoid any type of debt at all costs is that you are going to be charged a fee for the chance to borrow the money up front and pay it back later. When you carry a balance on your credit card account, you accumulate interest charges each day, based on your daily balance. So when you make a payment before the due date, you are lowering your average daily balance, which can reduce your interest charges significantly. Also, think of it this way: Since you earn very little interest from keeping money in a checking or savings account, but pay much more for that high-interest credit card debt, you stand to save money in the long run by making payments to your credit card as soon as possible.
5. I will have more control over my life
Yes, I am a control freak and that’s something I am working on, but being debt free helps me at least feel like I am in control of my life. It also creates a nice buffer, in case bad stuff happens. I might not have any control over the things that happen to me, but I certainly can control how well prepared I am financially. Having outstanding debts will always make life’s problems more complicated.
6. I will have a better credit score
Speaking of those debt service payments, they are also going to be holding down your credit score. Even if that doesn’t seem like a big deal today, it definitely will when you are ready to purchase a new vehicle or are shopping for the best home mortgage. In today’s cyber world, your credit score is becoming increasingly important, so protect it by being debt free.
An important caveat to the above relates to debts you can pay off later, which can include mortgages and student loans.
The reasoning. Student loans tend to have a low interest rate and an extended payment period. They are also typically unsecured loans that are not tied to collateral such as property, meaning your creditor will not likely repossess your personal assets, such as your home, if you are forced to delay repayment. Mortgage repayments can often be negatively geared, so this is a good reason why a mortgage loan can be a good type of debt.
ADC Legal Litigation Lawyers is a legal practice specialising in commercial advice and litigation, debt recovery and insurance claims recovery disputes. For more information, email us at email@example.com or call 1300 799 820. Talk to us about your litigation or dispute concerns via Skype at adclegal.