Debt hangs over people. Sometimes it even destroys lives. For most of us though, debt controls our decisions and limits our choices.
For most of us we can push it to the back of our minds, but it rarely leaves us untouched mentally.
We still feel the stress and anxiety of having debt lurking around in the background. We weigh our decisions in our careers and with our families based on our ability to pay the debt payments we’ve agreed to.
Getting out of debt offers freedom from the burden and stress debt brings into our lives.
Reducing your debt and paying it off completely opens up choices and freedom to do what you want most in life. It makes managing your money less stressful and it gives you the chance to do more with your life.
Paying off debt has a ton of other benefits so today I’m sharing 10 reasons you should get out of debt.
1. Reduced Stress
Living with debt is stressful. End of story, we could probably stop here, right? Most people that find me online tell me that debt stresses them and causes anxiety.
You worry about paying the bills and what will happen if you lose your job or if you should feel guilty about spending money. The constant pressure of needing to work to support debt payments can cause massive amounts of stress.
Those with high debt levels have stress levels 12% higher than the average person (https://news.northwestern.edu/stories/2013/08/high-debt-could-be-hazardous-to-your-health) and getting into debt beyond your ability to pay is one of the top five most stressful life events according to the Society of Occupational Medicine. These levels of stress are not healthy for your body and could literally shorten your life.
Becoming debt-free can help you save your life by reducing stress and preventing the serious health consequences that come from constant stress. Getting rid of debt lets you feel less trapped and that feeling along with fewer bills reduces stress.
This stress relief from the removal of debt can make your life happier and longer.
2. Better Mental Health
Unfortunately debt is linked to worse mental health. I shared my own family experiences with the links between debt and depression so I know this story all too well. Even if debt doesn’t make you depressed, it can worsen depression symptoms.
A Northwestern study found people with a lot of debt were 13% more likely to have depression symptoms. Other studies have found similar results especially when the debt is higher.
Even worse, for some people like my half-sister, large debt loads that feel overwhelming can lead to suicidal thoughts. Unfortunately some people act on these thoughts and end their lives due to the crippling effects of debt. While that isn’t a good solution for the problem of debt, it does sometimes happen.
Thankfully getting rid of debt leads to better mental health. Improving your mental health can also help you tackle the debt you need to repay. These go hand in hand and are worth working on.
When you are debt free you are less likely to suffer from anxiety or depression. People report being happier with their life as a whole when they are debt free.
The feeling of knowing you own your car and house and don’t have any payments can be a huge boost to your mental health and happiness.
3. More Free Income
Beyond the psychological factors of reduced stress and better mental health, getting out debt just gives you more money to play with! This can make your life more fun!
When you have debt payments you are sending money to lenders instead of being able to spend it on things that you love. Getting rid of the debt might be hard in the short term but long term you free up more money to live the lifestyle that makes you happiest.
When you pay off debt early and get out of debt you’ll have more money each month in your budget. If you don’t have to pay $350 toward a student loan payment every month, wouldn’t you be able to spend that money in a way that improves your life?
If we weren’t paying a $1,200 mortgage payment each month we would have over $14,000 more in our budget each year to spend. That would buy us a lot of awesome things or multiple amazing vacations each year.
4. Less Risk
When you are in debt, you are taking risks with your money. You are betting on your ability to pay back the debt you’ve taken on. That involves risk.
It might not feel that way since debt is so normal in our society, but if you are in debt and don’t have savings you are one emergency away from disaster. And if you are unable to meet payments on your debt you could end up in collections or bankruptcy or lose your house or car. There is a lot of risk involved when you owe someone money.
Paying off debt and achieving debt freedom removes these risks. A lender can’t come after you for non-payment. A mortgage company can’t foreclose on your house if you don’t have a mortgage. It gives you less risks of financial ruin when you don’t have debts.
5. Better Future For Kids
Your kids will have a better future if you are out of debt. If you are a parent like I am then this is a huge motivator to get out of debt.
There are multiple ways getting rid of debt improves the lives of your children. First, there will be the freed up income that you can spend on your kids and their needs. Also, you can also better save for their actual future by putting more money into a college savings fund or funding accounts for things like their first house or their first car.
Getting rid of debt also makes you a better parents because it improves your emotional state and mental health. Bettering these things makes you a better person and a better parent.
Debt freedom reduces stress so you’re going to be a more pleasant person and your kids will benefit from that as well. They also benefit from a parent that can teach them about money and show them how to do it the right way and avoid massive debt.
Giving my daughter a better financial start and a better life overall is a huge reason why I want to get out of debt.
6. Stronger Marriage
Marriages struggle under debt and money problems. Money fights are common among couples that get divorced and the strain of not being on the same page financial can add unnecessary stress to a marriage.
The stress caused by the effects of debt can cause couples to be irritable and zap the loving feelings right out of the relationship. Fight about money can lead to tension and even divorce when the debt isn’t addressed.
Getting on the same page financially and getting out of debt removes one area of potential conflict from your marriage. The more areas of conflict you can work through or eliminate, the better your chances of a happy marriage.
Working through the process of getting rid of debt also creates a stronger marriage because you’ve worked on a big problem together and succeeded. Tackling a shared enemy like debt can create a strong bond between you as partners.
Paying off debt and working as a team with my husband to pay off our debt has helped us better communicate and has strengthened our marriage.
7. Ability to Retire
If you’re in debtm then chances are you aren’t saving enough for retirement because you’re busy paying off debt. Debt can often slow down or prevent people from saving as much for retirement as they should be saving.
Getting rid of the debt means you have more money freed up to save for retirement by investing. Even if you’d rather not work until you die, you should be saving for your golden years to give yourself more choices. There is nothing worse than being 70 or 75 and being forced to work when you’d rather not.
The faster you get rid of debt, the faster you will be able to save more for retirement. Without debt holding you back you could even try to retire early instead of working well into old age. Personally I’d love to be able to retire from work I don’t love so getting out of debt is part of my plan to achieve that.
8. Ability to Help Others
Getting rid of debt gives you the opportunity to help others more often.
My favorite thing about Dave Ramsey’s show is that he paints the picture of getting out of debt and building wealth so that you can not only enjoy it for yourself but use it to help others in life.
Getting rid of debt makes it possible for you to help other people when they needs it most. You can help friends and family get through a tough period financially and you can donate more to the charities that matter to you most.
Research has shown that spending money to help others is a very rewarding experience. Often people find giving money just as rewarding as they would spending it.
I love knowing my money is helping change lives and make the world a better place – I want to do more of that when I’m debt free!
9. Guilt Free Spending
Let’s be honest, even when you have a budget and plan for expenses you still feel a little guilty spending money on things when you are in debt. There is the angel on your shoulder telling you that your spending money could be sent to debt.
I sometimes feel guilty even when I’ve saved for something and I see the benefits of what I’m buying. It’s hard to fully 100% enjoy spending money without guilt when you are paying off debt.
But getting rid of debt gets rid of all that guilt and mental baggage around spending. Having no debt frees you up to spend what you want on whatever you want!
When you are in debt you might not even have the money to spend, guilty feelings or not. This can lead to spending on credit leading to more debt and a vicious cycle. Getting rid of debt for good takes you out of the cycle and you can use your money for guilt free spending on the things you enjoy.
Reason #10 to get out of debt? Freedom.
Not having debt obligations gives you a huge amount of freedom and confidence. When you don’t have to work your butt off at a job you hate to pay debt, you’ve truly achieved a level of freedom most people don’t reach.
This is a huge personal reason to get out of debt for me. I want to be free from owing anyone anything. I want to be free to make my career choices not based on how I’ll be able to service debt payments but instead on how it affects the rest of my life.
Getting rid of debt gives you much more freedom in your life. It opens up more possibilities because you’re reduced expenses means you can change jobs or move or for some people even stop working.
Getting rid of debt gives you freedom. That’s what I want. That’s why I’m getting out of debt and that’s why I’ll never take on more debt outside of mortgages.
Why Get Out Of Debt
This video and post about reasons to get out of debt was a collaboration with two of my favorite YouTubers: Kate Kaden and Well Behaved Wallet!
These ladies also created videos about why to get out of debt. You can watch their videos below to learn their reasons why to get out of debt and follow their channels for great frugal tips and personal finance advice.
Clearly we have overlapping and different reasons to get out of debt!
Regardless of the specific reasons, it’s clear that eliminating debt is a worthwhile pursuit. That’s why I’m using the debt snowball to get out of debt in order to do things like invest money and purchase real estate!
Mary is the founder of Pennies Not Perfection where she shares her journey to build wealth through online income. She quit her day job in 2021 after she paid off her debt and doubled her 9-5 salary.
Mary's favorite free financial tool is Personal Capital. She uses their free tools to track net worth and work toward to financial freedom.