Being saddled with debt can bring about a host of stresses. It can be tough to live with the knowledge that you are swimming in debt. Here are four reasons why you should pay off your debts as soon as possible:
Eliminate the Risk of Repossession
Having your vehicle repossessed is incredibly disheartening and something that you want to avoid at all costs. Without a vehicle, you might be unable to get to work, causing you to spiral even further into debt. Having a car or boat repossessed can also negatively affect your credit, putting you deeper into a financial hole. Do not be fooled into thinking that you can elude repossession agents. Modern repossession services have tracking tools such as license plate recognition technology to help them do their work. Instead of trying to run away, work with whoever you owe money to in order to see if you can’t cut a deal that will allow you to keep chipping away at your debt while also keeping your possessions.
Increase Your Capacity to Save and Invest
Without debt weighing down your financial future, you can put more money into saving and investing. The power of compounding interest is something that should be leveraged in order to grow your wealth. You will be able to make your money work for you instead of against you when you free up your disposable income for purposes other than debt payoff. Once your debts are paid off, you can harness the opportunity to watch your money multiply in a positive way.
Reduce Exposure to Economic Downturns
Getting yourself out from under the burden of debt will help you to better weather any impending economic downturns. Those people who were riddled with debt were not able to successfully navigate the challenges of the 2008-2009 domestic economic crisis. Being debt-free puts you in a much better position to weather any financial storms.
Keep More of Your Money
It doesn’t take a mathematician to understand how much money you waste each month when under the thumb of high interest rates. By paying off debt, you will be able to keep so much more of your money. Compounding debt makes it harder and harder to get back up on your feet. When dealing with multiple accounts with high-interest rates, debt consolidation could make it easier to pay down outstanding debt. With consistent payments, you can pay off what you owe and begin to see more money in your pocket each month.
Being debt-free means that you have the freedom to live your life the way that you have always envisioned. Although it is a tough hill to climb, the rewards of getting out of debt are infinite.
Only 46% of Americans have a “rainy day fund.” Where do you stand? Will you have to struggle, just to come up with $1,000, like 2/3 of families? Take the first step to freedom today.