How it Feels to Pay Off Debt & Be Debt Free | Credello

Video What is it like to be debt-free

what is it like to be debt free?

Paying off debt may have been a long and tiring process, but you did it. when you are debt free, you can experience:

  • emotional relief. You can feel liberated and relieved that you no longer have the stress of paying debts. now you have freed yourself from hard times in the past and can move forward with better habits and financial freedom.
  • feel happier. More money in your pocket means you’ll have to make fewer sacrifices and worry less about the debts weighing you down.
  • comfort. now you can have peace of mind knowing those extra funds are in your bank account and you don’t have to worry about an unexpected emergency depleting all your cash reserves or putting you deeper into debt.
  • less stress. You no longer have to think about how you will make your debt payments or when you will finally be debt free. Gone are the days of stressing about how you will pay all your bills and other necessary expenses while making your debt payments.
  • better sleep. stress and anxiety can lead to insomnia and trouble sleeping, which can negatively affect other aspects of your physical and mental health. less stress means better sleep.
  • feel more in control. Not having to make debt payments gives you more control over where your money goes. this can help you improve your money management skills.
  • Improved relationships. stress and financial struggles can affect relationships. There is a reason why financial difficulties are cited as one of the main reasons for divorce. She, too, may have had to make sacrifices while paying off a debt her friends didn’t understand. being debt free gives you time to focus on others (as well as yourself) and your relationships.
  • physical improvements. The stress of debt can cause physical problems like headaches or migraines, weight gain, heart disease, diabetes, gastrointestinal problems, and more. When you are debt free, you may feel relief from some of these physical symptoms.
  • what to do after being debt free

    If you’ve been paying off debt for a long time, it can feel like a part of you and your routine, so it can be strange to think about what you’ll do once you’re debt free. While your first step should be to celebrate what you’ve done, your next step is to figure out what to do next, which includes setting new goals and continuing to use successful spending and saving habits to live the lifestyle you want.


    The first thing you should do is celebrate your achievement. No matter how much debt you had, paying it off in full took work, effort, and dedication. take some time to stop worrying about making your payments or stressing about finances so you can have space and perspective on what you did.

    set new goals

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    assess the progress you’ve made and start thinking about your new goals and the direction you’d like to take next. think about your new priorities. Your goals don’t have to be very specific yet, but you should have a general idea of ​​what you want to achieve. remember that spending more on non-essentials can easily get you back into debt, while saving or investing those funds can help you reach bigger financial goals faster.

    apply new habits

    once you’ve paid off your debt and have extra money that will no longer be used for debt repayment, you’ll have a big decision to make: let the lifestyle settle in, which means you’ll spend that extra money on more non-essential items, or put those funds toward savings or investment goals. choosing the latter can set you up for future financial success.

    While paying off your debt, you probably formed strong budgeting, saving, and spending habits. continuing those habits and resetting your priorities as needed can help you make the most of life’s opportunities in the future.

    the psychological impact of debt

    Financial stress affects a person physically, mentally and emotionally.

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    Physically, the stress of debt can cause or contribute to heart disease, allergies, diabetes, gastrointestinal disorders, sleep disorders, and even obesity. Mentally, being in debt can have a tremendous impact on your health. Here are some ways debt can have a psychological impact on your health:

    • stress. Stress can have a powerful impact on a person’s physical and mental health, making it easy to develop mental health problems, heart disease, headaches or migraines, gastrointestinal problems, and more. Paying off debt, especially if you’re struggling to make ends meet, can put incredible stress on a person.
    • increases risk factors. Long-term financial insecurity, poverty, pressure to repay debt, and relationship challenges are just a few of the things that are negatively affected by debt. These are all risk factors for depression, anxiety, and other psychological and mental health struggles.
    • behavior changes. Some may experience changes in appetite, nervous or obsessive-compulsive behaviors, impulsive spending, and other symptoms caused by financial stress.
    • increased use of drugs and alcohol. Debt can cause someone to turn to drugs or alcohol to help deal with physical or emotional pain caused by stress. this could lead to addiction, increased debt due to spending on these behaviors, and other physical and mental health issues.
    • spend more. Someone who is feeling anxious, depressed, or stressed may turn to shopping or impulse buying to alleviate negative feelings. The problem is that the relief is temporary, but the debt can be long-lasting. It can also be more challenging to stick to a budget, pay bills, and stay motivated to eliminate debt, which can lead to even more debt.
    • is it worth being debt free?

      Getting out of debt is one of the best things you can do for your well-being and financial security. You’ll see a variety of physical and mental improvements, and you’ll have the opportunity to set and work toward new financial goals without the burden of debt.

      That said, not all debt is created equal. Debts like student loans, home loans, small business loans are considered “good debt” because they help you generate income or increase the value of yourself or something you’ve bought. This good debt can help your credit score because it shows you’re a responsible borrower and a lower risk to lenders.

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      “Bad debts” like car loans and credit card debt don’t pay off, so you have to pay off that debt first. Bad debt also affects your credit utilization, which is an important factor in determining your credit score. this is the amount of debt you use compared to your credit limit. experts suggest that your credit utilization does not exceed 30%; otherwise, you may face higher interest rates on future loans.

      Without debt, borrowers can’t see if you’re making payments on time and being responsible with your money. Being debt-free can also shorten your credit history, which makes up about 15% of your credit score. Even if you don’t have debt, regularly using and paying (in full) a credit card can help build your credit history.

      It is also recommended to have a debt-to-income ratio of less than 43% to qualify for lower interest rates and better payment terms. This means that you must not have more debt than 43% of your annual income. a lower ratio can lead to a higher credit score.

      Overall, most people will agree that the positives of being debt-free outweigh the negatives. When you need the motivation to get out of debt, remind yourself how it feels to be debt free.

Content Creator Zaid Butt joined Silsala-e-Azeemia in 2004 as student of spirituality. Mr. Zahid Butt is an IT professional, his expertise include “Web/Graphic Designer, GUI, Visualizer and Web Developer” PH: +92-3217244554

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