Hi guys, Bridget here and I wanted to
talk about something that I hope you’re already doing and that is paying off
your debt early. We’ve become very accepting of debt and
we’re way too comfortable with it. Many of us have monthly payments in the form
of car payments or student loan payments. We seem to forget how much it’s really
costing us in the long run and how great it feels to actually be debt free. There are two main reasons why you might want to pay off your debt way ahead of schedule. The first is that the sooner you get out
of debt, the less interest you pay. Even if you’re at a low interest rate of say
5% on a student loan with a 10-year repayment term, you’ll still end
up paying nearly 30% of the original amount you borrowed over the
length of the loan. If you can get out of debt three or four years faster, you can cut that number in half.
The money that you save on interest is real money and that means that $1000, $2000 or $3000 that you don’t have to spend on interest you can then use to
spend on something else. You can go on vacation, you can put it in retirement
savings. I don’t really care what you do with it! I really just think anything is a better
use than staying in debt and putting it on interest. The second thing to remember when you’re paying off debt early is you’re really buying freedom in the future. If you
really don’t like making your student loan or car loan payments now, I promise
you still won’t like them six or seven or eight years from now. If
you’re looking for resources to help you calculate how much extra payments will
help you get out of debt, you might want to sign up for my free Debt Crusher eCourse. I’ll leave the link in the description below. It includes a number of spreadsheets to help you calculate
how much your debt is costing you and how much you need to get out of debt
faster. Paying off your debt early is really a guess that you’re giving your
future self. If you can become debt free at 27 or 28 instead of 32, I promise your 32 year old self will
thank you so much for it. So long as you’re in debt your money isn’t really
yours and you go to work at least part of the day so you can pay that creditor. Once you’re debt free, your entire paycheck belongs to you and you can use it for the life that you want. This is why they
call it “debt freedom” and it’s an essential part of your long-term
financial health. I hope you guys found this video
inspirational and you feel a little bit more motivated to put some extra
payments towards your debt this month. If you enjoyed it please give
it a thumbs up and subscribe to my channel where you’ll receive awesome
personal finance tips every week. I’ll see you later!