debt

The psychological perks of paying off debt

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

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.

Listen to audio
Show Show Transcript

Debt might have a way of dragging you down, but that debt payoff can bring you some much-needed relief.

Debt has a way of lurking over you like a dark cloud. Not only can it take a toll on your credit score, but it can also affect your personal life. Don't fret; the benefits of paying off debt can go well beyond the bank. Eliminating debt is more than just a numbers game. Debt is often associated with rough events, so when you pay off your debt, chances are you will experience a big emotional breakthrough. This will also melt away the stress debt can cause on your body, resulting in better physical health.

Debt can also weaken your self-esteem and hold you back from achieving your life goals. Confidence can be turned on at the flip of a switch, so be open about your financial troubles, especially when you come out on the other side.

Even after you pay off your debt, make sure you keep your finances in check.

 

advertisement

Show Bankrate's community sharing policy
          Connect with us
advertisement
CARDS WEEKLY NEWSLETTER
Credit cards on a table

Get advice for managing credit cards, building your credit history and improving your credit score. Delivered weekly.

Debt Adviser

How do I recover from a car repo?

Dear Debt Adviser, This one's a doozy: Back in 2009, during the recession, I lost my job, my vehicle was repossessed, and it sold for more than the loan amount. The repo is now on my credit report, and my score is in the... Read more

advertisement
Partner Center
advertisement

Connect with us