7 Benefits Of Debt Free Living Every Doctor Should Know

debtfree living

7 Benefits Of Debt Free Living Every Doctor Should Know

Unfortunately debt is a common fact of life in America, especially among healthcare professionals. Roughly 8 out of 10 Americans are in debt with consumer debt totaling over $4 trillion dollars.

Of that, student loan debt is $1.5 trillion and auto loans are $1.1 trillion.

We obviously love new cars!

With so many people in debt, it’s easy to dismiss it as the “norm” but it does take a toll on us no matter what people tell you.

Not only can it impact our financial freedom, but financial stress puts a strain on people and their relationships.

According to a survey by the American Psychological Association, money is a leading source of stress for Americans, with 72% of respondents saying they recently felt stressed about money. I tend to think it’s higher than that, but hey, what do I know?

Research has also shown that money issues is one of the top predictors for divorce.

If we know it’s not good for us to be in debt, why do we continue to choose it? Dave Ramsey has built his multi-million dollar career around helping others become debt free.

Most of the people that call in to his radio show are in debt because everyone else is doing it.

As a healthcare professional, you probably chose your career path early in life knowing you’d have to sacrifice your time to reach your ultimate goal. This typically involves 8+ years of post-college training. By using discipline and patience, it got you to where you wanted to be.

I recently heard Rick Ferri on The Doctor Money Matters podcast talk about discipline and patience with regards to investing with index funds.

These are the same principles commonly used by millionaires. The good news is that using these same principles, you can also dig yourself out of debt and be on your way to living your life the way you want.

If you want more proof, here’s 7 benefits to debt free living

7 Benefits To Debt Free Living

1) More money to save and invest

One of the biggest benefits to becoming debt-free is the ability to save and invest more. Once you’re consumer debt-free, you can then redirect that money towards:

Thanks to compounding interest, the more you can save and invest now, the more you’ll have down the line.

Once we became debt free, including our mortgage, we then were able to start funneling a significant amount of money into retirement savings and passive real estate investments

If you really want to get inspired, check out our Debt Free Doc Series:

2) More breathing room

What happens when someone has a financial emergency that’s up to their eyeballs in debt? They usually go deeper into debt to try and dig out of the problem at hand.

Most of the time, when someone carries a heavy debt load, they typically don’t have any savings to handle emergencies. Research shows that roughly 23% of Americans have less than $1,000 saved when trouble strikes.

I know that whenever we’ve had emergencies such as a car repair or our air conditioner going out….it usually costs more than $1,000.

When you’re in debt with little saved, you’re always only one step away from more trouble.

Once you’re out of debt, you’ll have more breathing room in your budget making it much easier to handle these occasional emergencies.

3) Ability to retire earlier

To expand on #1, extra money saved gets you one step closer to retiring earlier….if you want. Some people choose to continue working at their jobs knowing that they can keep making a difference but are now working on their own terms.

Others have the opportunity to completely retire earlier in order to purse other avenues in life.

My good friend over at The Physician On Fire is a perfect example. We’re both close in age yet I’m still seeing patients and he’s not! 🙂

He recently retired at 43 to spend more time with his wife and kids. I can totally understand his thinking as it won’t be too much longer when the Misses and I will be empty-nesters.

Being debt free allows you to make these types of choices.

4) We’re stress free!

According to a survey from the American Psychological Association, money is the #1 cause of stress in the U.S.

Something else to consider is our overall health. I have a friend that is a retired gastroenterologist. He once told me that over 70% of the GI problems he treated on a daily basis was stress-related.

It stands to reason that eliminating your debt worries could actually be good for your health too.

5) Cost of living reduction

Imagine what your life would be like without owing anybody anything. Pretty nice, right? Once you get to this point in your life, not only will you have lower monthly expenses, but also more discretionary income for goods and services you want.

You’ll also come to realize that you may not need quite as much to live on in retirement as you thought.

We became much more content in what we had once we began debt free living.

6) Better marriage

You’re probably well aware that money problems are one of the top reasons why so many couples get divorced each year.

Take it from me, being in debt can put a BIG strain on marriage. The daily stress makes couples irritable and both can start to wear on each other.

Even worse is when one spouse is grinding it out to pay off debt aggressively while the other is out spending money like the government.

Getting ahead in finances when married is a “team sport.” Yes, it can be done when one is spending and one is saving but it will take much longer to accomplish.

When couples grasp the “team” concept and both tackle their debt together, not only does the debt dissolve quicker but their relationship grows stronger.

7) Freedom to help others more

It goes without saying that you can help others more if you’re not shelling out most of your money to debt payments.

From a personal standpoint, I get so much more enjoyment out of spending money on others than myself. Now, I don’t want to start getting a ton of emails asking for money!

When I say spending on others, I mean helping others out of a tough situation (sorry kids, Xbox games don’t count!).

Don’t get me wrong. I’m not saying that we can’t help others out while we’re in debt. The point I’m trying to make is that it’s much harder to do if you’re sending most of your funds to Sallie Mae and MasterCard each month.

Having the freedom to pick and choose who you want to help or what charities you want to donate to is a great feeling to have. It’s always nice to have choices.

A recent study by researchers at the University of British Columbia and Harvard Business School showed that money can indeed lead to happiness—when it’s spent on others.

Speaking of helping others, a local oral surgeon friend of mine is in the process of adopting a child from India.

How powerful is that?

 

Are you working towards a debt-free life?

What about you? Are you working towards having a debt free life? Need help? We used the Dave Ramsey baby steps to help us dig ourselves out of both dental school and consumer debt several years ago.

No matter what method you use, becoming debt-free will make your life a much better one to live.

Do you have a story to share about living with debt or becoming debt-free?

Please send to jeff(at)debtfreedr.com

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One comment

  • Great list. I certainly have enjoyed being debt free these last 18 years. It is a freedom you cannot put into words. I will add this to my Fawcett’s Favorites on Monday.

    Dr. Cory S. Fawcett
    Prescription for Financial Success

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