10 Reasons to Pay Off Your Debt ASAP

The recession has caused many to re-evaluate their saving habits, and other financial habits as well. And one of the “other” financial habits that is seeing some reform has to do with debt. Many are deciding that debt is not worth it, and that paying off debt is a worthy goal. And it is. Here are 10 reasons to pay off your debt ASAP:

1. You keep more of your money. When you are paying interest, more of your money goes to others. This is money that you could be using, but instead you just pay to someone else. You don’t get services or goods. You just get the “privilege” of financing.
2. It frees up monthly household income. Consider how much you are making in debt payments. $300? $500? More? What could you do with that money? It allows more discretionary spending for you and your family.
3. Save more money. You could save more money for short term and long term goals if you could set that money aside each month, rather than putting it toward debt. Save the money in an interest bearing account (like a retirement account, CD or high yield savings account), and your money works for you — instead of against you.
4. Improve your credit score. You can get a better credit score when you pay down debt — and keep your debt low. A credit score is good for more than just helping you get other loans. Employers, insurers and others use your credit score to make decisions about hiring, premiums and other financial issues.
5. Teach your children by example. When you pay off your debt, you teach your children the importance of good financial decisions, and show them that it is a good idea to remain financially free. You can help your children down the right path.
6. You can give more to others. Once you pay off your debt, you can be free to help others. You will have more resources to donate to charity, as well as to family members who might need it.
7. You increase your financial security. When you pay off your debt, you are decreasing your risk. Debt increases the chance that an emergency will be financially devastating. Without debt, you are safer in terms of your financial situation.
8. Feeling of freedom. There is something very freeing about paying off debt and realizing that you are not financially obligated to your creditors.
9. Peace of mind. Along with financial freedom and security comes peace of mind. You will feel better about life, and your finances, when you have less debt.
10. Better relationships. Peace of mind, less stress and better finances often lead to better relationships. It is hard to nurture your family, spouse and friendship relationships when you are worried about money and your financial future.

Can you think of some other reasons to pay off your debt ASAP?

image source: TangoPango via Flickr