Why getting out of debt should be
your top priority

Getting out of debt is something many people keep at the back of their minds.   This may be because they feel it's going to be a struggle, or it may be because they feel so drowned by their debt that they don’t even see a way out of it.

Surprisingly, though, getting out of debt doesn’t have to be that hard.  In fact, being debt free comes with more than just financial advantages; living free of debt also improves your emotional health and your family life.

Compound interest compounding the problem

Basically, the longer you're in debt, the more money you're going to pay toward your debt over the long run because of compound interest.

For instance, let's say that you have a credit card with a £2,000 balance. This may not seem like a whole lot in today's age of high credit card debt, but if your credit card has an interest rate of 16.89%, which is low for most credit cards, and you pay £100 each month on your card, you won't be getting out of debt for two years. By the time you pay off your credit card, you will have paid an extra £366!

This means that the longer you stay in debt, the more debt you'll be in. This is why getting out of debt should be a huge priority. If you only focus on paying the bare minimum payments, at the very least, compound interest will add to your debt, and at most, you'll be more prone to charging even more on your credit cards, creating an even worse financial situation.

Financial benefits of debt-free living

While living debt free is a great thing simply for the personal and emotional benefits, which we'll talk about in just a sec, it can really give you some huge financial advantages. First off, you've rid yourself of those monthly payments, freeing up the money for more fun things to do with all your family. School trips, family outings or the annual family holiday can come back on the agenda.

You'll also be able to start thinking about more long term benefits for your family such as saving for a rainy day, the kids future or even your own retirement (so you're not relying on your kids in old age).

Personal benefits of debt-free living

By getting out of debt, you'll leave behind that panicky feeling when those monthly bills come in and stress of finding the money to pay them. Instead your life will be calmer, more relaxed and you'll have peace of mind that everything is paid (or will get paid) giving you time to focus on having some positive experiences with your children.

By getting out of debt you'll also become more confident as you've taken some difficult steps to get there. By going through the process of budgeting and getting control of your finances, you'll feel more in control and secure in your personal life.

Your stress levels will reduce and you'll be a more fun person to be around which will have a knock-on effect in your family life too, allowing you to spend more quality time with your children and to give them things and experiences you wouldn't have been able to do when you were in debt. So get started on the road to dealing with your debt now and see how your life changes.