Living Debt Free
With more than two thirds of Americans in debt, it often gets lost that there are significant benefits to living a debt-free lifestyle. Many sites across the internet do a great job at capturing the most obvious benefits of being debt free which I’ve captured in the list below.
Five Most Commonly Cited Benefits Of Being Debt Free
- Being debt free leads to increased peace and less stress.
- You have an enhanced ability to build wealth when you are not in debt.
- Having no debt improves your credit score.
- Greater flexibility is a benefit of a debt free lifestyle.
- Those who are debt free have less financial risk.
As one of the rare few to live a debt free lifestyle, I can affirm that the purported benefits of being debt free are very real. Additionally, I’ve come to discover several other benefits of living debt free that are often overlooked. This post will discuss the hidden benefits of being debt free, and highlight why debt free living is the optimal lifestyle design.
Contents
You Feel Richer Than You Are
We live in a culture where everyone wants to get rich, yet so few people actually do. Unfortunately, it is a simple statistical fact that relatively few people will ever become rich – which is why we laud and admire those who do end up making it.
As for the rest of us, we must learn to enjoy the money that we do end up making in our lives. Or more simply, we have to learn to live rich lives even when our bank accounts say that we are everything but so.
Fortunately, one of the best ways to feel rich even when you aren’t rich is to adopt a debt free lifestyle. This is because a major benefit of being debt free is enhanced guilt free spending which instantly makes you feel richer. There is nothing better than being able to satisfy your random impulses without having to rob Peter to pay Paul.
This is manifesting in my own life as I am currently booked for an upcoming trip to South America that I fully paid for without relying on credit card rewards. And not to mention all of the other superfluous spending that I can make on this trip without guilt.
Being Debt Free Gives You A Taste Of Retirement
Retirement is the act of leaving one’s job and ceasing to work. Most people won’t be in a position to retire until much later in life because they will need several decades of work to accumulate enough savings to be able to retire. Many others will never have enough to formally retire and will rely on social security to float in their post work lives.
I’ve come to realize that a debt free lifestyle offers the benefit of a taste of retirement well before one actually hits retirement age. This is because being debt free changes the nature of work from a necessity to much more of a choice.
Debt is slavery in the sense that it compels its holders to continuously service the debt with money that must be earned through work. When there is no debt, there is no compulsion to work. Suddenly, you are elevated to a position of deciding whether you will continue to work or cease work for periods of semi-retirement.
For instance, my first reaction to learning that I was being laid off was excitement because I knew that I then had an opportunity to step away from work for a significant period of time. I chose to go back to work pretty quickly, but now in a position to take an even longer break once that time comes.
Greater Confidence Is A Debt Free Benefit
I’ve always been relatively confident, but there have been several instances where my confidence became shaken. Notably, going broke was a hard hit to my ego that took quite some time to recover from.
Time has passed, as it always does, and I can say that I’m more confident than ever thanks to the benefit of being debt free. While in debt, I could never have predicted this as a benefit of being debt free. But, not owing anyone money has been the single biggest confidence boost that I’ve ever experienced.
I believe the reason for this is because, for most people, becoming debt free is a major feat that requires focus, commitment, and dedication. Once achieved, a person will experience an increased sense of efficacy and esteem which result in higher levels of confidence. In this manner, the benefits of a debt free lifestyle extend beyond your bank account as it will positively change who you are as a person.
You Become A Better Employee
Another benefit of living debt free is that you will become an all around better employee. I’ve noticed throughout my career that an employee’s financial status truly does dictate their behaviors at work. Notably, those who were in a better financial position performed better at their jobs.
But why might this be?
For one, those who are debt free exhibit more confidence which is an essential component to being effective at one’s job. Confidence enables us to perform without second guessing ourselves and allows us to show up as who we really are.
Furthermore, being debt free decreases an employee’s reliance on their job which has a double pronged effect. On one hand, decreased reliance on a job means an employee is more likely to seek out jobs that are well suited to them instead of staying stuck for the sake of earning a paycheck. As a result, better job alignment means happier workers who are more productive.
At the same time, decreased reliance on a job emboldens employees to take more risks while at work. For example, a more confident employee who does not necessarily need the job to survive is more likely to speak up and challenge the status quo. This is a good trait, because this is the very thing that leaders are made of. Those who are willing to stand out are usually rewarded with higher pay and prominence with an organization.
You Become Less Jealous Of Others
For most of us, jealousy is an undesirable emotion that we’d rather not experience. But it’s difficult to be happy for others when you are not doing well yourself. Fortunately, one of the major benefits of a debt free lifestyle is that it helps cure jealousy. This is because living debt free is like being in a state of nirvana thanks to the financial and mental boosts it provides.
When I was broke, I had trouble seeing those around me do better than me financially. It wasn’t that I desired for them to be doing poorly either. Instead, my jealousy came because their success made me feel worse about my own situation.
Now that I’m debt free, I still know many people who are doing better than me financially. For example, there is my rich friend who enjoys his millions by spending most days fishing in exotic waters. Or several other friends who are much closer to hitting important financial milestones by age 35 than I am. The difference now is that their success doesn’t lead me to be jealous of them. Rather, I can now cheer them on while I sit back and enjoy my new found nirvana.
Conclusion
Debt has become such a prevalent part of American culture that many can’t imagine living a debt-free lifestyle. The debt system runs deep with many of us taking out our first loans to pay for college, and follow with mortgages, car notes, and credit cards. Sadly, debt is a permanent fixture for many as they have accepted the idea of never being free.
Nonetheless, many others of us have opted for a debt free lifestyle and enjoy the wonderful benefits of being debt free.
If you are one of the rare few who happen to be debt free, you surely can relate. If you are not, I highly recommend you try this lifestyle out for yourself to see if it works for you. After all, you can always go back into debt if you don’t find these debt free benefits worth it.