Frugality Magazine - Frugal Living Tips for Financial Freedom

5 Ways Debt Controls Your Life

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5 ways that debt controls your life - and how to regain control of your finances.For many of us, being in debt is a way of life.

Many of us can barely remember a time when we weren’t in debt.

Indeed, all our friends are in some kind of debt; surely it’s just part of everyday life as an “adult”?

At least, that’s how I felt when I was carrying around tens of thousands of dollars of credit card debt, a loan agreement for a motorbike and an unpaid tax bill that I couldn’t afford to pay.

I lived with these debts for years – simply paying off the minimums each month and carrying on with life around them.

I still went on vacations. I still drove my motorbike around. I still went out with friends. Financially, life continued on perfectly well. In truth, without a wake-up call I could probably have taken my debts to the grave with me.

Thank goodness I did get out of debt eventually, because it successfully opened my eyes to the reality of life with debt. As a reformed debtor I can now clearly see just how many ways in which carrying debt around with you can control your life. Today I’d like to discuss some of the biggest “aha!” moments I had as my debt started to shrink.

If you’re currently in debt but are considering putting in the effort to become debt free once and for all then hopefully you’ll find a number of points below that you can use for motivation and inspiration. Because, trust me, a debt-free life is a wonderful thing…

Debt Limits Your Employment Options

Over the years one of the most common money-related conversations I’ve heard relates to high living expenses – often as a result of a significant debt burden.

The person telling the story always says the same thing; they’re boxed into a corner with so many monthly payments due that they simply can’t afford to lose their job. The option of moving from their current job to a new one is almost as scary because they’ve been with their current employer so long they know few other companies will be able and willing to match their current income.

They’re trapped between a rock and a hard place, constantly worrying about their job security. Too often these people live lives of “quiet frustration” trapped in a job they dislike. Perhaps their boss has changed, perhaps the company has changed, perhaps their own desires have changed; whatever it is I know far too many people trapped in jobs they hate simply because of the amount of debt they’re carrying.

I still see some of them around; slowly growing old, fat and resentful in a company they dislike, unable to consider alternatives. Worse, they’re so scared of losing their job – and what this would do for their tight finances – that they willingly accept any old crap that their bosses throw at them. It’s not like they can afford to quit, is it?

Contrast this to the person who has carefully and deliberately kept their expenses as low as possible. This person carries no debt so instantly has lower expenses than their peers. They also carefully analyse each expense in their lifestyle and downgrade as necessary.

In such a way they keep their financial responsibilities to a minimum. In such a way this person not only has spare cash to enjoy each month, but they are free to look at new opportunities at any time. If they have to take a slight pay cut – well, it won’t exactly break the bank.

These are the people who are free to follow their passions and live life on their terms, rather than living in bondage to their creditors and their employers.

Debt Can Affect Your Health

Paying off debt may seem tough - but boy oh boy is it worthwhile. If you're currently considering getting started on a debt repayment plan read this so you understand *why* you should get started ASAP and the benefits of finally becoming debt free. Click here to read more....A heavy debt load can affect us psychologically.

Severe debt – and the worries over how we’re going to pay it off – can lead to anxiety, irritability and lost sleep.

In some cases financial woes can break up relationships. Don’t underestimate the power that serious debt can have on your mental well-being.

And that’s before you start to consider how helpless you are in your current job role.

Over time these negative emotions caused by being in debt can, in extreme cases, lead to depression or even suicide.

Be under no misapprehensions; debt can have a serious impact on your health if you’re not careful.

If you don’t believe me, try imagining how different you’d feel tomorrow if the bank suddenly decided to just cancel the money you owe; don’t you think you’d feel pretty different when you got off the phone?

Debt Affects Your Free Time

As well as the psychological aspects of being debt, these growing credit card balances can also affect how you spend your free time.

After all, a sizeable chunk of the money you’re bringing home each month is ending up going to your creditors.

In essence it can feel like you’re “working for free” – being forced to give away hundreds or thousands of dollars in minimum payments each month – and having very little leftover after your monthly expenses to really enjoy life.

Many individuals suffering under the weight of debt find that they struggle to validate “luxuries” like going on vacation or eating out at restaurants with friends. Sometimes even basics like grocery shopping or topping up your fuel tank can be a struggle.

Ask yourself: is this really any way to live? Consider the alternative; what could your life be like if you didn’t have to keep paying off all this debt; what would your life look like?

Debt Limits The Credit Available To You

It sounds obvious but of course the amount of debt you’re carrying has a major impact on the credit currently available to you. If you want, for example, to get a mortgage so you can buy a house the amount of outstanding debt you’re carrying will be offset against your mortgage offer. The more debt you currently have, the less will be available for your mortgage. The same can be true for other forms of credit too, such as car loans etc.

Being in debt therefore affects your ability to afford the “big things” in life and is another situation where power has been taken away from you and instead handed to the banks. Your debt is the cause; and you’re losing control because of it.

Debt Stops You Dreaming About The Future

Dreaming about the future – about the possibilities of life – is one of my very favorite pastimes (yeah, I know!). We all need dreams. Goals. Things to aim for.

After all, we can put up with a lot in life if we know we’re heading towards a goal we really want to achieve – such as that vacation you’ve always dreamed of, or owning your first home, or starting your own business.

When you have disposable income each month it can be fun to make plans. After all, when you have money available to save or spend as you see fit, all sorts of things become possible. The more money you have available each month the bigger these plans can be – or the sooner they can occur.

Contrast this to the person living hand-to-mouth chasing their tail trying to keep up with debt repayments and the “standard expenses” of everyday life. Financial freedom is a lot further away for these people. The thought of having hundreds of dollars each month to put towards that big goal just seems like teasing.

Conclusion

More than anything else, being in debt severely limits the options available to you. Debt takes away control of your life and hands it to other people instead. You find yourself a “servant” of your creditors, working hard just to keep them happy.

In contrast, a debt-free life looks very different. A debt-free life is filled with options and possibilities. A debt-free life can be full of dreams and goals and things to look forward to. It’s a good life – no a great life.

If you’re currently struggling under a burden of debt and feel like there is no way out – have faith. This is just how I felt myself just a few short years ago. Now I’m on the road to financial freedom.

Not only have others – like me – done it before you, but when you’ve struggled with debt before you appreciate the feeling of debt-freedom all the more when the time finally comes. Now get to work!

How has debt negatively affected your life recently? Please leave your own opinions in the comments section below…

5 ways that debt controls your life - and how to regain control of your finances.

Richard

Sun-worshipper and obsessive frugality blogger. For loads more money-saving advice come and join us on Facebook.

9 comments

  • Debt does definitely limit you and what options you have available to you. Nicely written and I agree, being debt free (other than our house) was completely worth it. I am definitely not nearly as stressed as I have been in the past and I have options and freedom that I hadn’t previously had. I know it’s not easy, but it’s so worth it!

    • Steve – thanks for dropping by. My girlfriend and I are now moving to a new home thanks to paying off our debt. Being debt free has freed up so much cash in our budget that we can move to a nicer place and still save a load of money each month. Just a few years ago that would have been nothing but a dream – but now it’s a reality.

  • So agree about it stopping your from dreaming about the future. Because all you can really think about is the immediate and whether or not you’ll have enough food, electric or transport. Getting a perspective on the future is something i think is one of the key stages to getting out debt.

  • These are all so true and the very reason I’m working so hard to get out of debt, so I can have so many more options available to me.

    • Glad to hear it Liz. Trust me – it’s well worth it!

  • I have people who question my choice to drive an old car. We live in a much less expensive house than the bank says we can afford. However my husband and I have always agreed that debt is to be avoided and I’m pleased to say that we don’t owe anything to anyone and haven’t for almost five years. Its a great feeling.

  • “Debt takes away control of your life and hands it to other people instead.” That is 100% how I feel about debt and it freaks me the heck out. I hated feeling owned by anyone but myself.

  • Hi Richard! Debt certainly affected my life from points 2 through to 5. The worst way was my health, looking back. Debt turned me from being positive and carefree into a nervous wreck, constantly worrying about bills and how we were going to manage.

    Even though I’m debt free now, I still worry about money and whether we’ll be ok because we’ve got so much saving to do now. Debt caused chaos in my life and then left a big scar.