Home / Blog / What Can You Do Without Debt?

What Can You Do Without Debt?

Today’s economy makes it seem nearly impossible to function without some sort of debt. From car loans to credit cards and even house payments, all of the niceties of life come at a cost, and society suggests paying for those things over time not upfront.

So, what is the problem if debt is so common? Because debt requires that payments be made over time, it literally imprisons the individual. When an individual agrees to enter a debt agreement, he or she continues to pay on that amount for years to come, and that debt payment is compounded by interest, minimum payments, and other added debts.

On the other hand, though, an individual who is not bound to debt has financial freedom and is able to do things that those in debt cannot. It is high time more people start exploring the lifestyle of living debt-free. Here are just a few of the things that individuals who have eliminated debt are able to do.

1. Pay Cash for Purchases

Individuals who have managed to crawl out from underneath the rock known as debt are able to make purchases on their terms using cash. The advantage of paying cash is somewhat twofold. First, paying cash makes purchasing much easier. An individual who walks in the door with the cash in his or her pocket to purchase an item has a lot more negotiating leeway, so the individual is able to negotiate a better deal no matter what the purchase is. Additionally, when spending cash, the individual actually “feels” the purchase, so it’s much easier to spend within the confines of one’s budget. A cash payment prevents an individual from overspending.

2. Secure Better Interest Rates

Keeping negotiating in mind, individuals who are without debt are also able to negotiate better rates and terms if they do decide to take out a credit card or enter into a loan agreement. Because these individuals are able to demonstrate responsible credit use, a low balance-to-limit ratios, and a moderate debt-to-income ratio, they have stronger FICO scores. A strong FICO score helps an individual secure better terms and rates, which results in lower costs over time.

Related Article: Money Mistakes You Don’t Want to Make in 2015

3. Make Investments

Individuals who don’t have debt are also able to make investments and plan for the future. Living without debt means that an individual does not have as many recurring payments each month, which leaves more money to be spent at the individual’s discretion. One of the first things that most individuals look to do is begin investing wisely. Not only are these individuals able to make investments into various savings accounts, they are also able to make choices as to how they will want to spend their future. How does living in a paid-in-full condo on the beach sound?

4. Enjoy Vacations and Travel

Again, not having debt opens up more funds in the present, so an individual has more discretionary funds to use for luxuries and other fine things. Individuals who don’t have debt are able to use those discretionary funds to go toward purchases like vacations and other travel arrangements. Vacations are generally considered a “luxury,” which becomes available to an individual who has paid of all of his or her debt.

5. Help Others

One of the great benefits of paying off debt again is having additional “disposable funds.” These funds are monies that are not allocated to any payment in particular but can be used in any number of ways, like helping others. This type of living allows an individual the opportunity to use his or her money to help any number of people, including children, grandchildren, and even an aging parent. These funds can also be used to support a favorite charity or other benevolent work.

6. Make Improvements

Most individuals have home projects and other ideas they would like to complete if they ever have the time or the money. Well, individuals who don’t have debt have the money (and can find the time) to actually be able to do these projects. Home improvement projects and updates are among the most common investments individuals make once they have paid off their other debt, often even their mortgages. The big added bonus of this type of investment is that it not only makes one’s home nicer, but it also increases the value of the individual’s home. That’s a win-win.

7. Act on Dreams or Goals

Most people have a goal or a dream that they’d like to accomplish if they ever have the means to do so. Whether it is going back to school, starting a new business, supporting a charity, or otherwise, those dreams often require an upfront investment that may be out of reach if funds are tight. An individual who does not have debt is typically able to allocate funds to just this type of activity. So, living without debt can even offer the benefit of learning or starting something new that will only continue to benefit the individual monetarily.

8. Get Better Deals

Obviously it takes some level of frugality and money smarts to be able to get out of debt. So, individuals who have paid off their debt are typically a bit more money savvy than most. That being said, these individuals are often able to get better deals on the things they actually want. Whether it is simply saving up and waiting until an item is available at a better price or negotiating the price of an item to get a better deal, these individuals are generally able to get what they want without paying a premium price.

Related Article: Top Ways to Lower Your Financial Stress

9. Don’t Fear the Unexpected

Again, individuals who have gotten out of debt are capable with some sort of financial plan. That being said, part of the plan always covers unexpected expenses or concerns. Rather than fearing these unplanned expenses, these individuals have money set aside in sort of emergency fund to cover the periodic expenses that come up from time to time. This practice also makes these individuals of tightening up their spending or taking the necessary action to still be financially successful even in meager times.

10. Sleep Peacefully

Effectively preparing one’s finances and establishing an effective financial management plan creates a certain sense of security. So individuals who don’t have debt are able to sleep well and avoid worry. While no one can claim money that is to be made tomorrow, individuals with a plan in place are able to sleep comfortably knowing that their financial future is secure no matter what.

While getting out of debt is a great goal, in some cases debt is just unavoidable. In any case, though, living debt-free doesn’t have to be a “legend” but rather a goal. Real people are able to take the steps necessary to get out of debt and are able to reap the benefits of the effort.

Blog Tags: 

Sign up for our monthly newsletter.

Get the latest tips & advice from our team of 30+ credit & money experts, delivered to you via email each month. sign up Now

Alice Bryant's picture

Alice Bryant is the Editor of Creditnet and a personal finance expert with over a decade of experience writing about credit cards, credit scores, debt repair, and more.

Visit 's Google Plus profile for more.