More than 40% of all Americans have a goal of getting out of debt. Strategically reducing or paying off debt benefits your finances tremendously, but can positively impact other areas of your life as well.
1. Reduce stress.
According to a recent study, more than 85 percent of Americans intermittently feel stressed by their ﬁnances and 30 percent feel stressed constantly, according to CNBC in March 2018. When you make the commitment to pay oﬀ your debt, you’re also making a commitment to your overall health and well-being by minimizing a large cause of your stress.
2. Improve your credit score.
Although credit cards and lines of credit may help establish your score, maintaining low balances positively impacts it overall. Additionally, if you plan to ﬁnance a large purchase, such as a car or home, keeping your outstanding balances low may classify you as a lower credit risk and qualify you for reduced interest rates.
3. Easily pay an unexpected bill.
If your debts are low, you'll be able to save more in an emergency fund to handle financial surprises, such as an unexpected home repair bill.
4. Increase your disposable income.
Many Americans live paycheck-to-paycheck; their hard-earned money is already earmarked to pay oﬀ debts and bills before it’s even deposited in a bank account. However, the less debt you are in, the more disposable income you will have available to enjoy now or save for later.
5. Boost your retirement income.
If you want to maintain your lifestyle long after retirement, the time to save is now. Unfortunately, one of the biggest impediments to building a retirement nest egg is existing debt. The good news is, when you pay down or pay oﬀ your debt, you can choose to contribute additional funds to existing retirement accounts for enjoyment in your golden years. If you're interested in learning some good, practical ways to save for retirement, connect with our Preferred Partner, Amanda Johnson, a Certified Financial Planner with Ameriprise Financial.
6. Model good financial habits for others.
If you want others to cultiate good financial habits, be the example they can follow. People, especially children, mimic the behaviours they see. Explain how to cultivate good financial habits and why it is important to do so. Additionally, provide reaons why it is bests to aboid unnecessar debt.
7. Become more generous.
The less debt we have, the more generous we may feel with our money. Whether it's tithing more, donating to local school or sports programs or giving money to a cause dear to us, we may feel like we can give more.
About our Team
The Sherri Patterson Team specializes in residential real estate and relocation, with a combined 75+ years of experience serving the Sacramento, El Dorado, Placer and Yolo counties. We work directly with hospitals, physicians and medical professionals. Whether you're looking to buy, sell or relocate to the Greater Sacramento area, we are the premier real estate team of choice. Our office is located at Keller Williams in Folsom, CA