Why is a Debt-Free Life Worth Achieving?

It appears these days that striving to become debt-free is met by lack of enthusiasm to put it nicely. Numerous so-called “financial experts” speak against the idea of a debt-free life and instead promote the idea that “debt is a tool to building financial wealth.” If that’s the case then over 80% of the American population should be millionaires because that’s how many people live in debt. Obviously it doesn’t work that way.

If you’ve ever attempted to get debt-free in any serious manner you probably received a few weird looks from your friends and relatives…and perhaps even from yourself while standing in front of the mirror. It takes hard work, saying no to self repeatedly, staying on a tight budget, and living differently from most people around you. Frankly, life is lived differently by people who desire to, and have achieved, living debt-free.

So why put in the effort it takes? Why live differently from your peers, neighbors, and family? Why go to the trouble at all? I mean, is it really “that bad” having a little debt here and there as long as it doesn’t get out of control?

Here’s the simple answer to all of these questions. Achieving and living a debt-free life is the single greatest method and indicator in determining if you will live a wealthy and prosperous life before you die. It also is a huge determining factor as to how financially generous you can be to your family, church, and future generations. To understand this it takes looking at what debt limits you from doing.

• Debt limits your savings: debt payments take the precedent over savings goals and the interest you could have been collecting goes to the lender that’s financing you.
• Debt limits your giving: being financially charitable is more difficult to do when there isn’t much cash available, if any, after the bills and debt payments are done.
• Debt limits your choices: if you live with no debt you can change career paths with little concern, travel with few worries, live with less stress, and live beyond the paycheck-to-paycheck mentality of people drowning in debt.
• Debt limits your future: everyday you hold off on paying off debt is another day you are paying that interest to somebody other than yourself. To see how powerful this is take all the monthly payments you currently make on debt (credit cards, auto/student loans, mortgage, etc.) and calculate what that amount would be if invested instead for a period of 20 years. For most people it would fall in the millions of dollars, and for some into the tens of millions!
(Example: $2,500 in payments per month = $30,000 per year. $30,000 invested per earning 12% annually = $2,278,028.00 in just 20 years, and $7,630,033.00 in 30 years!)

We kind of shot past it but it shouldn’t be over-looked too quickly. Living debt-free reduces the stress that is an all too common result of a poor financial condition. Statistically speaking, stress leads to numerous health, relational, and emotional problems. The good news is that debt is one area of our financial life that can change rather quickly with a concerted effort and focused determination and with it many areas of tension and stress in our life. I’d say that for all of these reasons alone, plus the countless others that went unmentioned, pursuing and living a debt-free life is a no-brainer. Of course, $7,630,033.00 when my wife and I are 57 (we’re 27 & 28 now) is motivating as well!