There are some benefits to becoming debt-free, and one of them is having the funds you need during financial emergencies. You might lose your job, get a divorce, lose your home due to a natural disaster, or experience a health crisis that keeps you out of work temporarily. In these situations, it would be good to know that you're doing well financially and not loaded with debt. Here are additional benefits of being debt-free during financial emergencies.
You Rely Less on Credit Cards and Personal Loans
When you become debt-free, you rely less on credit cards and personal loans to assist you during financial emergencies. Instead, you can tap into your savings and use those to keep you afloat. When people max out credit cards to pay for expenses during emergencies, they end up in a cycle of debt that would worsen the emergencies and cause long term stress.
There Is Less Stress
When you are debt-free during financial emergencies, you're not stressed out as much. You'll have peace of mind in knowing that your bills will be paid on time and that you can focus more on planning your next strategy to overcome the situation.
You Can Focus on Pursuing New Goals
Another benefit of debt-free living during emergencies is that you're free to pursue new goals that could boost your income. You might decide to start a home-based business so that you can stay home with your kids and travel more with them. Or you could take in a disabled relative and be his main caregiver when the need arises.
In conclusion, these advantages can serve as motivation to create a plan to eliminate debt and take control of your finances.