debt

The psychological perks of paying off debt

Freedom to pursue other life goals
Freedom to pursue other life goals © Monkey Business Images/Shutterstock.com

When you're living with massive debt, it's easy to put your life on hold. All of those life dreams -- getting married, launching a business, having a baby -- seem impossible to pursue when your financial life is in disorder.

Hildebrandt and her husband could hardly fathom achieving her goal of purchasing a home with her 11 credit cards and a substantial personal loan, but after those grueling years of paying down their debt, they saw their credit scores rise and their finances stabilize. As they approached the debt-free finish line, they closed on a house with a low fixed interest rate.

After clients pay off debt, "it gives them a lot more freedom," says Chris Dlugozima, community relations coordinator for GreenPath Debt Solutions in New York. "I had a client (who) came in to see me; he was devastated. His fiancee had found out about his financial situation. He wasn't sure if the marriage was going to go through." Dlugozima worked with him to put him on a special payment program that helped him steadily knock off debt. Now, several years later, this client is not only married, but expecting twins.

"It's not just about the money, but about how the money can get in the way of life's other goals," says Dlugozima.

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