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Does Paying Off Debt Have Intangible Benefits?

side effects of debt

Have you ever wondered if paying off debt has intangible benefits?

We already know the most common benefits of paying off debt, like more money in your bank account, not living paycheck to paycheck, and freedom to spend your money how you want.

When I was on my journey towards becoming debt free, I came across other intangible, but very real side-affects that I experienced when paying off my debts.

1. Less Physical and Mental Stress

When people are dealing with mountains of debt, they’re much more likely to report health problems. Four of the five top causes of death in America (heart disease, stroke, cancer and lower respiratory diseases) can be triggered by stress.

And as we all know, one of the biggest contributing factors is financial stress. So as you pay down your debt, you reduce the amount of both physical and mental stressors. Which helps you become a healthier and happier person.

2. Better Relationships

One of the main reasons for couples splitting up and getting divorced, is money fights and money problems. This was one of the reasons my marriage failed, so I understand firsthand the part financial stress plays in a relationship.

But by reducing your debt, you’ll be eliminating one of the biggest factors that contributes to stress within your relationship. Many studies have shown that happily married couples outlive singles, divorced and unhappily married individuals.

Having less debt means fewer reasons to fight about money and spending, which leads to more harmonious relationships. You’ll have more successful relationships – with your kids, your parents and of course your spouse.

3. Opportunity to Fund Your Dreams

Reducing your debt lets you have the freedom to spend, save and give as you see fit. This means you can save for that vacation you want, or spend money on some new furniture for your home.

Having financial flexibility gives you and your money the opportunity to fund your dreams and goals, instead of funding someone else’s bank account. Instead of being in debt to credit card companies your whole life, you can take more risks and have more fun.

4. More Community Involvement

Paying down debt can have many positive effects on your finances. When you don’t have major debt weighing you down, you can be more involved in your community.

You can give of your time and money more freely, instead of paying bills and debt payments. You help increase the quality of life of those around you, which helps raise the overall standard of living for everyone.

5. Peace of Mind

I’ve said it before, but having peace of mind when it comes to your financial future is priceless. No amount of stuff or material possessions will make you feel as good as having peace of mind.

To be able to lay down at night knowing your family will be taken care of, that your kids can go to college and that you can work at a job that truly makes you happy. These are all intangible benefits that come with not owing debt.

They may not be evident when you look at them on paper, but sometimes life is about more than just doing the math. Once you begin paying off your debt, you might experience some of these unexpected but wonderful side-effects.

What’s another unexpected benefit to paying down debt that you’ve experienced?

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About the author: Carrie Smith is a financial writer, business consultant and freelance coach. After paying off $14,000 of debt she quit her accounting day job and launched Careful Cents as a blog and community aimed at helping freelancers overcome financial mountains and build client-based businesses through meaningful relationships. She works one-on-one with freelancers and side-hustlers who are ready to make a profit without selling out. When she’s not writing about finance, and geeking out over numbers, she enjoys painting, sketching, and making food with her chef husband. You can connect with her in real time on Twitter or Instagram: @carefulcents.
13 Comments... Read them below or add one of your own
  • William_Drop_Dead_Money October 11, 2012, 8:30 am

    Yes. All true. But… Being debt free introduces you to something you may or may not be prepared for: investing. Getting out of debt requires earmarking a certain amount each month. When the debt goes away (finally) the amount remains. What do you do with it? You have three choices: you either get more debt to pay off with it, you spend it all, or you invest it.

    You’d be surprised how many people are actually afraid of investing. But what else are you going to do without debt? To some a scary thought. To others, great excitement, You have a choice…

  • Plunged in Debt October 11, 2012, 8:49 am

    I cannot wait to experience all of these…some day. I agree with everything. Even feeling control of budget, while in debt, can allow you to experience some of these feelings as well.

    • Carrie Smith October 11, 2012, 11:03 am

      Yes, absolutely! That feeling of empowerment when you gain control of your finances is awesome and a definite benefit.

  • Sean @ One Smart Dollar October 11, 2012, 9:31 am

    No doubt that these are all true. I have never been in serious debt, but I can image that the stress would be taxing on the body after awhile. You start thinking about all the things you could be doing with the money you are tossing away each month and it wears you down.

  • Ornella @ Moneylicious October 11, 2012, 10:42 am

    All these are very true. I love the peace of mind “side-effect.” :-)

  • Lance@MoneyLife&More October 11, 2012, 10:44 am

    I definitely agree. While I was never stressed about my car loan I found myself thinking about it more and more as I got closer to paying it off. I details used to pay it off a few months early and now I don’t have to waste time thinking about it any more!

    • Carrie Smith October 11, 2012, 11:04 am

      That’s exactly how I felt Lance, when I was paying off my car loan. I didn’t realize how much time and energy was spent worrying about making extra payments, working to make extra money and all the other stuff that comes with getting out of debt. It’s crazy!

  • frugalportland October 11, 2012, 6:12 pm

    Very well said, Carrie! Having more opportunity is what it means to me to get out of debt and start building wealth!

  • Robb @WatchOutForFlyingNinjas! October 11, 2012, 10:59 pm

    There is really no way to place a value on feeling secure, the less control you have over your household income the less secure you are going to feel. I like that Dave Ramsey line “the money goes in, the money goes out and only the names are changed to protect the innocent.” I imagine it gets ratcheted up even more in a married household because you get increased stress, which leads to arguing, which leads to respect loss and that is a bad place to go to.

  • Rajamani Thialan October 12, 2012, 9:06 am

    I could not agree more. Especially with number 3. I could not fund my degree because of a car loan that I have. Every time I pay the installment, it pains me because I know that money could have been used to fund my dream.

  • Bethy @ Credit Karma October 12, 2012, 11:24 am

    Another intangible benefit of paying down debt is not always having to say “no.” When I first moved to San Francisco, my husband and I had some tight finances (more from low pay and high cost of living than debt, but same idea). We had to say “no” to a lot of offers from friends simply because we didn’t have the cash.

    Now, our finances are better, and we’ve gotten better at saying “no” when small temptations come along and “yes” to shared experiences with friends that may cost a little money.

    • Carrie Smith October 12, 2012, 8:39 pm

      That’s a great point Bethy! That’s a huge benefit to being debt free, for sure. Now that you pointed that out, I get to say “yes” to a lot more opportunities and fun social things, than when I had debts to pay.

  • Alan Akina October 22, 2012, 2:06 am

    Hey Carrie, another benefit that I have seen in many people that have paid off all of their debt is…confidence or improved self-esteem. You just feel so much better about yourself and a renewed sense of life.

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