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Blogging for Change Blogging For Change
by sitecore\kmcgrigg on April 09, 2009

In honor of Financial Literacy Month, we created a microsite that offers 30 simple steps to financial wellness–one for each day of the month. To enrich the experience, we asked some amazing people to guest post during the month on a topic that is related to the day’s step. Their dedication to financial literacy is truly inspiring! Today, Prime Time Money discusses debt.

How did you do? Did you pass the debt test? Understanding what makes up a poor debt situation is certainly an important part of this month-long journey towards financial literacy. For extra motivation though, today I thought I'd share some reasons why having less debt could lead to greater peace and happiness in your life.

I'm no stranger to unwanted debt. I'm currently working on paying off some debt I've had since college. I'm embarrassed to tell you how long ago that was. :) Paying off debt is a long and tough process, I realize. Therefore, I often stop to remind myself what it will be like when I achieve my goal of getting rid of my unwanted debt. Here are a few good reasons you might be happier if you were in less debt:

1. Less Hassle - Think about it. For every debt you get rid of, you rid yourself of a monthly statement to open and review, a bill payment to schedule and make, and an online account to log into and check. Less debt means less to do. I think we'd all rather spend our time doing things we enjoy versus sorting through another debt payment each month.

2. An Improved Credit Score - These days, your credit score affects things like insurance premiums and your ability to find a job. So having a high credit score can be very important to your overall financial success. By reducing your debt, you improve your balance to available credit ratio, one of the key factors that affect your credit score.

3. Less Worry When Things Turn Bad - It's never a good time for an expensive medical issue or a job loss. But a hard time can turn really hard when you've got a lot of debt to worry about too. Getting rid of your unwanted debt will give you one less thing to worry about, if and when things go wrong.

4. It Just Feels Great Not to Owe Anyone - You've probably paid off a debt before. Remember that feeling? Imagine if you could experience that same feeling for all your unwanted debts. That huge burden lifted would feel great!

5. More Money for Other Goals - Lastly, imagine all the other things you could be doing with the money you're using to pay debts right now. Here's a few ideas: funding your retirement, saving for a down-payment on a new home, saving for a child's college, giving more money away to charity, saving for a great family vacation. You get the point. Having less money going towards old debts means you can have more money going towards the things you want more, the things that matter the most.

Have a good reason to be less in debt? Leave it in the comments below. Thanks for letting me share my ideas and good luck with the rest of the 30 steps.

PT leads the daily discussions at Prime Time Money: A website dedicated to helping you save more money, get rid of debt, and live a frugal life. You can also connect with PT on Twitter (just follow him @ptmoney)



AndrewBoldman says:
June 04, 2009

Hi, good post. I have been woondering about this issue,so thanks for posting. I’ll definitely be coming back to your site.

Anna says:
April 09, 2009

I think #5 More Money for Other Goals is the best reason not to be in debt. This reason kind of goes along with #3 Less Worry When Things Turn Bad. With money owed somewhere else, I always feel guilty for spending money on something I don't NEED and when things go bad, I would like to know I won't have to worry about money when there are other things to worry about.

Michael says:
April 09, 2009

I can agree with the idea that being out of debt feels great. My wife and I have been working on reducing our Debt for over nine years. Before we got into a structured program to reduce our debt, we would wander around in a haze. We would pay our bills, but when emergency situations came up we had to decide what bills were more important to pay and which ones we could let go nonpaid for the month. When we buckled down, we were able to get rid of almost all our debt. We created an expenditure fund for all non monthly bills that might pop up and the OOPS Gotcha expenditures. Now the only bills my wife and I have left is our Student loans and Mortgage. We can see the light at the end of the tunnel and all the efforts we put towards being debt free is starting to pay off. I just want to say that putting a little effort into paying off your debt will create great results. The more time you take to pay off debt now, the more money you will be able to free up later.

PT Money says:
April 10, 2009

Great comments, Michael and Anna. I'm personally attacking our student loans this year. I think this will be the year we finally rid ourselves of them. Low interest rates and tax deductions only take you so far. At some point we just have to say lets end this thing and pay them off. I'd rather take that $200 and put towards my new daughter's education each month.

QuickHits: Easter Edition | Prime Time Money says:
April 12, 2009

[...] 5 Great Reasons to Have Less Debt [...]

tom says:
April 13, 2009

To a certain extent, don't you need debt to build and keep growing your credit history and credit score? I mean you don't want to disappear off the planet and not deal with debt and when you do need it, you are screwed.

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