6 Benefits of Paying Off Debt

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6 Benefits of Paying Off Debt

By admin | April 25, 2022 | Debt Free Life

Paying off debt requires a lot of hard work and motivation. For many, the ultimate goal when it comes to paying off debt is financial freedom. Beyond the accomplishment and confidence that comes with being debt free, there are several other benefits of getting rid of debt. We’re covering a few of the positive benefits of being debt free and sharing how the Debt Free Life program can help you get out of debt for good.

Stress less

It’s no surprise that carrying debt can cause stress. A study from the University of Nottingham found that individuals who struggle to pay off debts or loans are more than twice as likely to experience mental health problems, including depression and anxiety. As you might expect, paying off debt can have positive effects on your mental state, and can help you reduce your stress level over time.

Improve cognitive function

A 2017-study from Frontiers in Psychology references several studies showing that poverty – experienced in real life and in laboratory conditions – impaired people’s attention span, memory, and self-control. Working to eliminate debt can improve your sense of self-control, knowing that you have the ability to change your financial circumstances.

Increase the possibility of longevity

The Federal Reserve Bank of Atlanta published a recent study on how debt affects death rates. The study found that as people’s credit rating improved, their risk of death decreased. A 100 point increase in credit risk (Equifax’s equivalent of the FICO score) reduced the overall risk of death by 4.38%. Reducing your debt may not necessarily have a direct impact on your longevity, but this study is a nice reminder that eliminating debt has the potential to improve your life in many ways.

Teach your children good money habits & support their goals

If you have children, the efforts you make to pay off debt can be a good teaching tool to show them how to achieve financial success for themselves. Even more, without the burden of debt, you will be able to provide additional financial support for your loved ones – this could include a college fund for your children or purchasing life insurance with a cash value savings component that can set your children up for success later in life.

Improve your credit score

Credit card debt can have an especially negative impact on your credit score. When your credit card balance gets close to reaching the limit on your credit line, your score will be affected quickly. Paying off credit card debt is a good place to start your debt free journey, and this momentum can help you start paying down other loans when you’ve eliminated your credit card debt.

Give back to others

Getting out of debt means that you will have money available for things that matter to you. You will now be able to provide financial support to a friend or family member if they need a helping hand. In addition to helping people you know, being debt free allows you the opportunity to give back to charities or non-profits you’re passionate about. Supporting a good cause is a great way to increase your happiness while making the world a better place.

How Debt Free Life can help

If you’re looking for a way to pay off debt for good with a customized plan to fit your budget, Debt Free Life can help. Debt Free Life is a program that uses the cash value of a permanent life insurance policy to pay off debts. Instead of borrowing from a bank and paying interest, you can use funds from within your policy. The program is customized for your specific budget and debts, including credit card debt, mortgages, student loans and auto loans.

Schedule a consultation to learn more about Debt Free Life

During your virtual consultation, your licensed Debt Free Life advisor will present your personalized debt payoff plan so you can see when your debts will be paid off. You will also see how much money you can have in retirement savings at the end of the program plus how much money you will save in interest over the years. Ready to get started? Schedule a virtual call with a certified consultant today – we’ll create a customized debt payoff plan and help you get on track to financial freedom.