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One of the things most likely to hold you back in life is your debt. While it’s possible to borrow smart, and use debt as a way to leverage different opportunities, it can also drag your finances down. Using debt requires that you walk a fine line that can result in financial bondage if you aren’t careful.
Even if you do use debt for something considered “reasonable” like education, buying a home, or starting a business, it’s important to borrow as little as you can, and to pay it back as quickly as possible. If you don’t even so-called “good” debt can beging to hold you back.
Debt Saps Wealth
Even though it’s possible to use debt as a way to jump-start financial success, you should realize that, ultimately, debt saps wealth. This is especially true of consumer debt with high interest rates, such as credit card debt. When you are paying interest to someone else, you reduce your disposable income in a way that leaves less for you to use the way you want.
Paying interest means that your money is going to someone else — and not going to build a profitable side business, improve your financial future through wise investments, or even to a great family vacation. Pay off your debt as quickly as you can in order to ensure that your money is being used for your financial future.
Debt Can Affect Your Ability to Find Work
Another way that debt can hold you back is in your professional life. While not all jobs require a credit check, some employers might want to know your credit history. If you are going to work in the financial sector, or if you have a sensitive job, you might be considered vulnerable and unsuited if you have a high amount of debt.
Getting out of debt can help you improve job prospects in some cases. Not only that, but most people feel a jolt of confidence when they pay off debt. Being debt free can translate into confidence and a good attitude that can help you get hired, as well as help you negotiate a higher salary. You might not even realize how debt has been weighing on your confidence and attitude until you pay it off and feel better about yourself and your situation.
Debt Can Impact Your Relationships
Stress introduced into relationships because of debt can really make a difference. What happens when you are in debt can cause anxiety, and lead to difficulties with your loved ones. Indeed, marriages have been ruined because of the stresses that come with being in debt. Plus, your anxiety can impact relationships with children, parents, friends, and coworkers. Get out of debt, and you will find yourself more relaxed, and better able to focus on building good relationships with those around you.
Being in debt can really weigh on a person. From holding you back financially, to holding you back in other areas of your life, debt can be a real burden. Take steps to pay down debt, and you will feel happier, and have more income at your disposal.