8 Advantages of staying debt free by choice

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8 Advantages of staying debt free by choice

Living a debt-free life is rocking. I know, most of you haven't experienced it. Because you think that debt is inescapable rather than an exception.

But, you are wrong, debt is not mandatory.

You can own anything without accumulating debts. Life with no debt is a reward.

What are the financial perks of being debt free? How can be your life better when you have no debt?

Here you go:

1 You have the independence to work less

You have to pay off your debts. So, your current debt load will force you to work longer, even after your retirement. If you ignore, your financial trouble will increase even more.

It is mandatory to work 40-50 hours a week to manage the debt payments and other expenses. With no debt, you can give yourself a break; working 20-30 hours a week is enough.

Less or no financial pressure allows you to avoid the high-stress jobs. You have the freedom to do the job you like. So, having any debt holds your freedom to work freely.

2 You can take an early retirement

Early retirement can be possible. But, to achieve an early retirement, you have to stay away from debt. Your debts don't allow you to save money for your financial future. But to win an early retirement, you have to save enough money and invest it to grow faster.

Avoiding debts and eliminating unnecessary expenses frees up more money that you need to announce an early retirement.

Nothing can be more good than retiring early and enjoying life.

3 You will have no financial stress in your life

Keeping debts means doing slavery to whom you owe money. Increasing debt level can heighten your stress level. You may have to file bankruptcy to get out of debt.

People who are in debt struggle to manage their livelihood with their paycheck. You could have to spend sleepless nights worrying about your debts. The tension of getting collection calls, drowning the credit score, and making debt payments can make you sick and depressed. The whole scenario can even affect your relationship.

When you live a debt-free life, you can avoid any financial stress and enjoy life wholeheartedly. You can make your near and dear ones happy as well.

4 You are free to consider financial risks

When you are free from debts, you can save more. When you have enough savings, you are free to consider risk in the investment market. It will help you to grow your hard-earned money faster. By doing so, you can become a rich person with time.

Well, it is recommended to take an expert's help while investing money.

Because a wrong step can invite major financial loss.

5 You will become a pro in managing money

Paying off debts on your own and staying debt free is not easy. You have to manage your money efficiently to get out of debt.

You should avoid living an extravagant life, maintain a balance between your needs and wants, learn crucial debt relief methods, learn how to create a spending plan, etc. All these good financial habits help you to become a pro in managing money.

Once you learn how to manage money, you can give advice to others who are struggling with debts.

The financial insight that you learned from your financial life can enrich other's financial life.

You can start a financial blog to share your financial insights.

6 You are free from the worry of the emergency expenses

Having no debt means you have more money in hand. Thus, you should prioritize some crucial financial goals like building an emergency fund, saving for retirement, saving for medical expenses, etc.

Remember, emergencies are cruel; they come all of a sudden. You have to be prepared for it. Often people accumulate debts to overcome an emergency. So, to remain debt-free, you should build a fat emergency fund.

Being a debt-free person, you can build a fund that you can use for the emergencies.

Make sure you have a good amount of money in the emergency fund. It is mandatory to keep 3-6 months of savings in it.

You can keep even more to fight back with emergencies like job loss, natural calamity, accidents, illness, etc.

7 You can avoid costly interest

By avoiding any debt, you can stay away from the interest. When you are borrowing money, you have to pay the interest, which is the cost of borrowing. Lenders, creditors, and financial institutions charge an interest when a person takes out a loan from them.

The longer you carry the debt, the more money you have to pay in the name of the interest.

This way, you are losing your hard-earned money.

So, staying debt free, you can save the hard-earned money that you can use for your financial well-being.

8 You can help a person by co-signing a loan

If you remain debt free for a longer time, your credit score will increase. You can be eligible for 0% financing for furniture, credit cards, or automobiles. You can also get a home loan with a lower interest rate and better term.

Moreover, your good credit history will allow you to co-sign a loan for a person.

Make sure the person for whom you are cosigning is financially able to pay off the loan. Otherwise, you’ll have to pay off the loan. If you ignore, the debt collector will call you for the money.

Lastly, having no debt can make you free to think about your children's education cost as well. You can contribute money into a college savings account to help your children achieve a higher degree. Remember, education cost is skyrocketing; so, your children may have to take out a student loan for their higher studies.

Your contribution can help them to focus on their studies instead of worrying about the loan.

Remember, falling into debt and avoiding debt both are your choice. You should understand which is better for your financial health.

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