“Why should I bother getting out of debt?” is a question I got asked recently. The person I was talking to followed it up with, “I can pay my bills each month, so what does it matter if I have debt or my house isn’t paid off? Why should I live like I’m poor if I don’t have to?”
“Ah-ha,” I thought at that last statement. “Why should I live like I’m poor..” The thing is, that when we are in debt, we are living as though we are poor, although it might not be obvious. We are telling the world that we don’t have enough money to pay for our belongings ourselves. We have to borrow the money to do so.
That little bit of semantics aside, there are several other reasons to run the race to get out of debt. Here are four of them in no particular order:
1. To build wealth. Constantly paying interest rates on debt means that that same money isn’t being used to grow interest and contribute to future wealth.
2. To sleep better. Who can sleep when you have mounting credit card balances, worries over paying for college or anxiety of what might happen if you lose your job? Having little or no debt makes it more likely that you will be financially prepared for anything that life happens to throw at you.
3. To avoid hassle. I don’t know anyone who enjoys getting calls from collection agencies. Even if you only have a little well-managed debt, it makes it harder to conduct business, from getting a good deal on an appliance using cash to jumping through fewer hoops when buying a house.
4. To get a better job. Many employers are now checking the credit scores of their potential employees. Wouldn’t it be terrible to get turned down for a job because of poor credit?
What do you think?