Need Some Motivation? 8 Reasons to Pay Off Debt

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Credit repair is our business, but it isn’t the only reason to pay off debt. If you’re struggling to find the motivation, boost your efforts below.

So, why should you focus on debt reduction? Simple:

  1. Savings. Money in the bank is always better than the alternative. Paying off debt will help you avoid accruing interest as well, putting funds back into your pocket.
  2. Retirement. Retirement. Old age is inevitable and few people understand how important it is to prepare. Retirement savings are the difference between spending your golden years in a comfy beach house and a run-down studio apartment; the difference between qualified medical care and second-rate attention.
  3. Education. On average, college graduates earn more than their high school graduate peers. Paying off debt will allow you to invest in education to improve your future. When opportunity knocks, why not answer?
  4. Time. Debt reduction is an easy choice when math is involved. For example:

    Michael earns $30 an hour and has $5,000 in credit card debt, a burden that also accrues $900 a year in interest. By making the minimum payments only, Michael will need to work an extra 30 hours a year to cover credit interest alone!

    Save yourself some time by taking an active stance against debt. A quicker payoff will help you avoid interest and make the most of your hard-earned cash. You can’t lose.

  5. Stress. How often does financial stress cloud your mind? If you’re tired of feeling helpless, make the choice to pursue debt reduction. Stop making minimum payments and start prioritizing your emotional well-being. It’s never too late to make a positive change.
  6. Choices. Has debt limited your choices in the past? If so, consider the following example:

Stephanie hopes to buy her first home this year. Unfortunately, the bank denies her mortgage application. “I’m sorry,” the broker says, “but your debt-to-income ratio is 54 percent. We only approve applicants with DTIs of 43 percent or less.”

While Stephanie’s debt may seem manageable through minimum payments, its effects weigh too heavily on her gross income. Take a lesson from her struggles: Make a list of financial goals and work to achieve them. Don’t allow debt to affect your choices.

  1. Family happiness. Money can be tight when your family is filled with kids. School activities, summer camps and general needs can affect any budget. The good news: Debt reduction offers a long-term solution, helping you satisfy ongoing expenses.While you may need to cut back today, paying off debt ensures greater family happiness tomorrow. Stop saying “no” and start saying “soon.” Allow your kids to learn by example.
  2. Quality of life. Are you tired of living paycheck to paycheck? Wouldn’t it be nice to take a vacation without guilt or worry? Quality of life and debt are directly linked, and money management is essential to building a positive future. Don’t sacrifice your wants and needs without a fight. Find the determination and hold yourself to a higher standard.

If you look closely, you’ll see that all of these reasons are tied to credit repair in some way. While it may not be your primary motivator, credit health is a byproduct of every item above. So, what are you waiting for?

Posted in Finance
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