For better or worse, debt is a part of life. People in the United States currently hold over $13 trillion in total debt.
Borrowing money allows people to acquire things that will better their lives. Unfortunately, borrowing money isn’t always done in a responsible way.
These are some of the consequences that come with carrying a serious amount of debt.
You’re Borrowing from Your Future Self
Sometimes people don’t stop to think about what they’re really doing when they pay for something with debt.
Doesn’t this make the whole idea a bit less appetizing? There are certain kinds of debt where it makes perfect sense to do this – such as purchasing a car or house.
You probably can’t pay for these things with cash, and they’ll be integral parts of your life in many ways. However, you need to be much more careful when using debt to finance non-essential purchases.
For these, you’re just taking money away from yourself in the future.
You’ll Hold Yourself Back from Financial Independence
A lot of people dream about what they’re going to do when they retire. Others have plans to make this happen earlier in life. The modern economy affords people more freedoms than have ever been available before.
People have options available to them when it comes to achieving financial wellbeing. Getting caught up in debt, however, is a surefire way to keep yourself back from reaching your dreams.
Whether it’s traveling, owning your own home, or just finding a way to retire early, debt is going to get in the way of these things.
Increased Anxiety and Stress
You’re not just harming your finances when you take on too much debt. You’re also negatively affecting your mental health.
Increased anxiety and stress are both common occurrences for people who have large debt loads. This makes sense since creditors and collections agents make it clear they want to get their money.
All this extra tension can lead to physical ailments as well – such as heart disease and obesity. If you’re dealing with the stress of paying down an unmanageable amount of debt, it might be time to call for help.
A debt relief company can help you reach an agreement with your creditors, and give you a clear path toward a debt-free life. Freedom Debt Relief is one of the most trusted organizations out there for helping people wrangle their debt.
Look at Freedom Debt Relief reviews to see how they’ve made many people happy with their services.
Damages Your Credit
Your credit is an essential part of your financial livelihood. Your life with good credit is going to be a lot easier than your life with bad credit.
This is because your credit score directly affects certain things related to your ability to borrow money. For example, people with subprime credit are only going to be eligible for higher interest rate loans.
These people will need to pay more interest on outstanding credit card balances. They’ll also only qualify for auto and home loans that come with notably higher interest rates.
Getting stuck with high rates means you’ll pay significantly more over the course of a loan. Exactly 30 percent of your credit score is determined by your amount of outstanding debt.
People who are carrying a lot are going to pay the consequences in other areas.
Harms Interpersonal Relationships
There are many different relationships that can be harmed by your debt. Marriage is one of the most obvious examples of this. Two people can have a stake driven between them by their large debt load.
This won’t just harm your marriage, it can be even worse for children who have to see their parents fighting all the time. Your debt can also harm relationships with friends and other family members.
Otherwise, you’re going to permanently put a strain on your relationships with those people.
Nobody wants their life to be run by their debt. However, this is an unfortunate reality faced by millions of people. Living this way comes with serious consequences, some of which can greatly lower your quality of living.
These consequences are even more severe for single parents. Here’s a guide on how single parents can eliminate debts.
