debt

The psychological perks of paying off debt

How debt is a downer
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How debt is a downer © wavebreakmedia/Shutterstock.com

How debt is a downer

Debt is a drag. Not only on your credit score, but also on your psyche. It's a dark cloud that lurks over many corners of life, casting a shadow over your confidence, ambitions and relationships.

The stress that comes from debt "may even completely eliminate all the happiness that you can get from spending your money," says Ryan Howell, associate professor of psychology at San Francisco State University and co-founder of Beyond the Purchase, a website that examines the psychological link between money and happiness.

But a massive debt payoff can bring a host of psychological benefits. The achievement can restore your self-esteem and help you pursue life goals. The debt pay-down process instills a sense of resolve that will help you stay financially healthy.

If that's not motivation enough, consider this: the trickle-down effect can lead to improved health and restored relationships, says Carole Stovall, a psychologist and executive adviser in Washington, D.C.

The benefits of paying off debt go well beyond the bank. So whether you're nearing the finish line or miles away, think about these ways debt payment can help return balance to your mind and body.

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