What is it like to be debt-free?
When this year began, we had 2 financial goals:
To put as much money as we could towards my debt freedom.
To get my monthly passive income to match our monthly expenses.
Yaaay! Goal one is officially done and dusted.
All the money that we were putting towards debt payment will now go towards making the second goal a reality.
- Being debt-free makes you feel like you can accomplish anything!
This motivates you to work harder, save more and invest so that you can attain the ultimate goal, financial freedom.
- Debt freedom also means that you’ll be less anxious about your financial well being.
This translates to better sleep. Remember that this article started with a life-threatening call? We no longer have to worry about such. Freedom and peace of mind is by far the greatest benefit of the debt-free life.
- You can accomplish your financial goals quicker when you’re debt-free.
No more money is going towards paying hefty interest rates and debt in general. All your money belongs to you!
We often tell our clients who are stuck in debt that debt freedom is something they can also accomplish. Well, from 8th April 2022, we officially began walking our talk!
- It feels like getting a raise
One of the fastest ways to attain debt freedom is by asking for a raise from your employer. When you have more money, you can pay off your debt faster. Being debt-free feels like you’ve gotten a raise because you have more money that remains in your possession.
- Your net worth grows faster!
This might be obvious, but when you’re in the habit of updating your net worth excel sheet every month, you will see that your net worth is growing faster!
You will pile up your cash faster if you don’t have to give it to lenders and credit card companies. The sooner you realize this, the faster you can start stacking your money.
- Debt freedom reduces the risk of financial failure
Every day, we hear stories of people whose assets are repossessed by banks, shylocks, and other money lenders. In most cases, it’s an embarrassing scuffle that affects their mental well-being. Having loads of debt, without a debt payment plan, can lead to financial failure.
Many people who are drowning in debt end up filing for bankruptcy. Being debt-free reduces the risk of financial failure as you’re fully in charge of financing your lifestyle.
What to do after paying all debt
Many people attain debt freedom and then immediately fall back into the debt trap. We don’t blame them and we don’t think we are immune to the same because we live in a world that is designed to keep us stuck in debt.
For example, my bank just doubled our credit card limit without our consent. They should have at least waited for me to celebrate a full month of debt freedom before shoving such a temptation down my throat!
To avoid such temptations, you should have a plan for your money after you attain debt freedom.
You should also take time to think about your relationship with debt going forward. Debt is a financial tool that you can use to attain your goals if used wisely.
We will keep using our credit card to pay for all of our bills and pay the debt in full at the end of each month as a way to earn reward points and improve my credit score.
Being debt-free doesn’t automatically mean that you’re wealthy, we not. In fact, we are far from it and still asking ‘God, when?’ daily. But we do hope that this article has taught you that a debt-free life is not something reserved for the rich!
Ready to stop being a slave to debt?