The Benefits of Being Debt Free


In case you missed my excitable celebration tweet on Thursday…

That’s right! As of Thursday 19th December I became free of debt! With the overtime that I had worked last month, my latest paycheck was enough to put enough distance between me and my overdraft and now I will never need to use it again!

The Debt-Free Feeling

The first thing I did after opening my eyes on Thursday morning was to check my balance; sure enough I had hit my target and cleared the last of my debt! Whilst eating my breakfast I couldn’t help but wonder if I actually felt any different, with online banking my success was just a change in pixels on a screen so it took me a moment to leap for joy. I think just for this day I would have preferred my wages to be delivered to my door in £5 notes so I could throw it all in the air and scream – “THIS IS ALL MINE!”. It wasn’t until I started the commute to work that the feeling began to sink in, I started to think about all of my post-debt plans and what it actually meant for me to be debt free. I’ve been doing my research into asset allocation for months and now I can finally start to put theory into practice! The debt-free feeling is a good one, I’m so glad that I now own all of my own money.

The Benefits

Apart from a huge weight of your shoulders, a feeling of accomplishment and a big drop in stress levels, there are some real  financial benefits to being debt free.

debt repayments1. No More Repayments

The biggest benefit to me is that I no longer need to make massive repayments month on month. I was contributing over 1/3 of my income to avalanche my debt and now I’m finished! I now have free reign over what I wish to do with this extra 40% income – I can now allocate this proportion to a new savings account.

2. Interest Works for You Now

The good news is, that once you’ve cleared your debt you can make the interest work for you. Even in an easy access savings account you can earn up to 1.5% on your money rather than losing more than double that on debt interest. Once you’ve cleared your debt you can enter the exciting realm of compounding interest on your savings.

I was in a very lucky situation in that there was no interested on my debt. This was because I had borrowed money from my family and dived head first into my interest-free overdraft. However, I understand that many others out there aren’t so lucky and have to pay large interest rates on their debt.


3. You Can Begin to Invest
A simple principle in wealth creation is that you should allocate your money to something that will make you more money. You can invest in stock or shares, you can begin spread betting, you can get involved in real estate, start your own business or invest in someone else’s! Some of these don’t even require a large lump sum but when you are desperate to get out of debt there’s only one place your money goes – repayments.

My Immediate Plans

My first goal upon getting out of debt was to switch my current account to one that provided some financial benefit and had no overdraft. This goal is now in the works and I have sent my application to Halifax where I will receive £100 for the switch and £5 per month there on.The account has no interest on your balance but as I will be transferring my money into a savings account I decided that the £160 bonus for switching was worth much more than the interest rates offered on other current accounts. Keep an eye out for my New Years Eve post looking over my latest goals and maybe setting some new ones!

How have your repayments/savings been doing lately? Are your savings going strong at the most expensive time of the year?

Update: July 2015

Hi all! I’m checking back in on this post as it’s been almost 2 years that I’ve been debt free! If you’re taking on the challenge to cut down your debt, take a look at my guide to getting out of debt here.


  1. This is fantastic news! Congrats to you, I’m so pleased you’re debt free. For me its still a dream, and I’m still trying to find ways of increasing my income to get out of debt faster. If you have any ideas let me know. How exciting that the money you earn can now go into your pocket. Merry Christmas!

    • Thanks so much, it’s a very exciting time!
      Good luck on clearing the rest of your debt, it looks like you’ve made a huge dent in it already! I’ve recently switched to a Halifax current account which gives £100 for the switch and £5 thereafter, every pound counts!

    • Can you have a changed mindset such that you train or rather discipline your self when you are about to take credit out on anything.
      Write every single debt that you owe to anybody I shop or company and arrange from descending order from the biggest to the lowers amount and group each debt basing on where it can be categorised.
      Then start you payment plan from top to bottom or vice versa.
      Delete every number in your phone after clearing every person or block them such you won’t get tempted for further credit.
      Buy some things in huge amounts such that they can last you for some considerable time.
      Maintain the clothes and shoes you have and look away from these cloth shops everytime you are tempted to buy new clothes and shoes
      Just be your self even if your friends may make fun of you because it’s your life not theirs and they start respecting you after wards
      Don’t seek to impress others with new credit stuff because outwardly people will be impressed but deep inside you will the one suffering
      Sell off unnecessary stuff you don’t need in your life to offset abit of the debts you have and focus in buying assets or investing in something that may give you a weekly yearly or daily income
      Avoid impulsive buying like electronics that keep on coming out every other doesn’t make sense to a device that offers the same service even after a year.
      Busting chick let’s be straight we but things which we want not need and wants in most cases are just to impress others but honestly who suffers in the end?
      Lastly find a second income generating activity there you will find peace of mind because you will be able to buy anything without feeling guilty.

  2. it is a very news that u r debt free. but for me its still a desire, and I’m still trying to figure out ways of improving my earnings to get out of debts quicker. If you have any concepts let me know. How interesting that the money you generate can now go into your wallet.

    • Hi John, I’m sure you’ll be out of debt soon, it’s a tough battle but it’s soooo worth it! The best thing I did was cut down all of my expenses so I could set 40% of my income against the debt. From there it was just pushing hard at a variety of side hustles to pay that little bit extra.


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