The following is a guest post written by Good Nelly. Enjoy!
Taking on a lot of debt is a huge commitment. It takes a lot of hard work and dedication to win over the debt battle. So, when you claim your victory, that would be an awesome feeling. You’ll be enjoying the debt-free lifestyle and start getting chances to make your own financial decisions. You did not have such options while being in debt.
But, having such freedom is difficult and comes with a price. You might have sacrificed a lot to become debt free. You might have made hard decisions without any regrets. But believe me, if you want to live a peaceful debt-free life, there are a few costs that you have to pay somehow.
Let us discuss those few hidden costs of a debt-free lifestyle.
1. Lacking Retirement Savings
If you continue paying off your debts without caring about all other expenses and savings, it may create problems later on. One of your most important financial goals in life i.e. your retirement fund may get affected due to lack of money. If you put all your income to make your debt payments, you may not be able to save for the retirement.
With a limited income, it’ll become harder to cope up with these two primary life goals. It’ll be impossible for you to maintain your lifestyle, and practically, you could encounter new financial issues.
People would say that they are lacking money for emergency funds as they have to make huge debt payments every month. But if you are able to save just $50 in a month for emergencies, then it is better than saving nothing.
To create secure retirement savings, you might require to set proportions of your income. You need to create separate funds for your debt payment and retirement savings.
2. Encountering Health Hazards
To consolidate your debt, you might have rendered all your effort and precious time you have. Becoming debt free may take time, so you must be patient to get the job done. But, this may create stress in your mind which affects your health. Prolonged stress causes a broken health condition and often leads to many other critical physical and mental issues.
So, it is equally important to stay healthy while dealing with your debt problems. Sometimes it’ll be hard to balance these two, but it’s extremely crucial that you keep saying “No” to stress. Be healthy and strong to stay out of debt.
3. Facing Issues In Your Family Life
This is one of the biggest hidden costs of a debt-free lifestyle that people may face while paying off debt. You may not like the fact, but you may lose connections with your family, friends, and other relatives while following a debt-free lifestyle. You might not spend as much time with your family as you need to. Instead of enjoying a good family time, you may be busy with your second job or doing any other work just to earn more.
We tend to want people to be just like us. But it’s not practical at all. You can’t expect that your family members won’t react to such unnatural behavior. They may not understand the stress and pressure you are going through.
It is your job to make them understand that you are working hard to get out of these debts. After realizing the fact, they will definitely support you.
4. Not Having an Emergency Reserve
While solving your debt problems you might avoid saving for an emergency fund. You might be totally dedicated to creating a budget to get out of debt. But don’t forget that you also need to have money to tackle your emergency situations.
You should create an emergency fund to manage sudden expenses. Start contributing to the fund on a priority basis; set up auto-payment facility for both debt payments and emergency funds.
5. Living a Goal-Driven Life
Living a debt-free life is a goal that you need to achieve through hard work and determination. But once you get out of these debts, you may still want to follow that lifestyle. It’s a common human psychology.
You will try to set up specific and relevant life goals. You might also want to follow a debt-free lifestyle that can be measured and altered as per your financial requirement.
In this way, your life will become too much calculative. You would like to wait for buying anything, work hard, and save as much as you can. You may like to map out your strategies to make them successful. Practically it’s a good thing. But you if look closely, you are apparently losing the charm of your life.
Life can’t be contained in a box where everything must be calculated. You must also do things without calculating the results. Live like a human being, not as a machine.
Final words
Following a debt-free lifestyle is not something that you can start whenever you want to. It’ll take time, effort, patience, sacrifice, dedication, and lots of support from your close ones. If you can indulge the right behavior and keep the perfect mindset, it will be easy for you to become debt free and financially independent too.