The average adult in Canada owes $23,800 in non-mortgage debt. While there might be some adults with no debt, many people might owe even more than this amount.
If you owe any money for credit cards, medical bills, personal loans, or other short-term credit lines, do you want a way out?
Being debt-free provides many benefits, and it is possible to reach a point where you no longer owe any money.
If you would like to learn why being debt-free is so essential, here are nine excellent reasons to start working on getting out of debt now.
1. You Will Have Fewer Bills to Pay Each Month
When you owe money to several creditors, you must make payments every month for each one. Think about how many different debts you currently have. Do you have three, four, or ten?
Imagine if you could consolidate your debt into one payment. Imagine how much less work you would have each month, making just one payment instead of five or ten. Then, imagine paying off the one debt you have.
Imagine how simple your budget would be if you had no debts to pay. Having fewer bills to pay each month simplifies a budget and makes paying bills a lot easier.
2. You Will Improve Your Financial Position
You can also improve your financial position by paying off your debt. Your financial position refers to where you stand financially. If you add up your assets and debts, would you have a positive net worth?
If not, you should start working on this right away by finding a way to become debt-free. When you become debt-free, you will have an improved financial position.
Having an improved financial position provides a lot of advantages if you ever need a loan.
3. You Can Spend Less on Interest and Fees
Another thing you should consider is the amount of money you spend each month on interest and fees for your debt. If you have high-interest loans or credit cards, you might spend a lot of money paying the interest and fees.
If you had no debt to pay, you wouldn’t have to pay all this money on interest. In this case, you could have more money in your pocket.
4. You Can Have More Money to Spend on Things You Want
By paying off your debts, you can have more money in your pocket to spend on the things you want to buy.
When you owe a lot of money to your credit card companies or loan providers, a part of your income goes straight to them each month. If you have very little money left after paying your bills, you might have no money to use for the things you want.
5. You Will Have Less Stress
Do you know that debt causes stress? If you feel stressed and anxious a lot, is it because of your debt? Many things in life can lead to stress and anxiety, including debt.
If you pay off your debt, you might discover that you feel less nervous and anxious. You might feel happier and more content in your life. These are natural responses that occur when people become debt-free.
The secondary effect of this is that you will likely be a healthier person when living a debt-free life. Without stress, your body will feel better, and you may experience fewer health issues.
6. Your Credit Score Will Increase
Another positive effect of being debt-free is that you will see an increase in your credit score. One factor that plays a role in your credit score is the amount of money you owe on your debts.
If you use an installment loan to pay off all your debts, you will have just one payment to make every month.
While you will not be debt-free until you pay off the loan, you can still see an increase in your score by using the proceeds of the loan to pay off any existing debt you have.
7. You Can Qualify for Loans Easier
With an improvement in your financial position and credit score, you will find that it is much easier to qualify for a loan when you need one.
Suppose you want to buy a house in a few years. You might not qualify for a mortgage loan if you owe a lot of money on debt. However, if you are debt-free, you will have an easier time meeting the requirements for a mortgage loan.
8. You Can Save More Money for Retirement
Without having any debts to pay, not only can you buy more things you want, but you can also save more money.
Have you thought about retirement? If you are an adult, you should be thinking about this, no matter how old you are. Saving for retirement takes time and work.
If you can free up your budget by paying off your debt, you can build a bigger retirement account. Do you want to enjoy life during retirement? Do you have a plan to save enough money to cover you during this time in life?
You can have a more enjoyable retirement if you can save enough money throughout your life.
9. You Can Have More Confidence and a Better Self-Esteem
Finally, living a debt-free life gives you a way to live with more confidence. You will likely notice that you feel better about yourself after paying off your debts. You may have an increased sense of self-worth, too.
Being Debt-Free Offers Freedom
Are you tired of owing money to your creditors? Are you sick of spending most of your income on your debt payments? If so, you should start working on being debt-free.
Being debt-free is the best way to live.
Would you like to learn how to become debt-free? If so, contact us. We can help you find a way to pay off your debts and live a stress-free life.
