Would Being Debt-Free Make Me Happier?

We have debts.В Two car loans and students loans.

Compared to some of my friends, my student loans are minuscule but nonetheless, it’s debt. And in the Personal Finance world, debtВ is as bad of a four-letter word as most cuss words.

Like most of us in this realm, getting rid of these debts was a main focus of mine for such a long time. It was an unhealthy obsession. I used to know exactly how much more we had left to pay. I used to know exactly how much we’ve paid in interest and I used to know that if we’d pay a little extra, exactly how much quicker we could become loan-free.

Those things were pointless.

Knowing those things isn’t fun. It isn’t going to help us get out of debt any quicker if I just knew the numbers but didn’t do anything about them. I know it was annoying to my wife because I wasn’t looking at the big picture.

It wasn’t helping anything.

All what it did was make me feel helplessly stuck and make me think that it wouldn’t be possible to enjoy life as long as we had these debts.

That’s complete and utter nonsense.

So I got to thinking recently and asked myself a couple of questions:

  • Would I be any happier if I was debt-free?
  • Would our quality of life improve?
  • What would my wife and I even do with the money that we save?

So wouldВ I be any happier if I was debt-free? That’s a difficult question because happiness is a complex concept. I used to beВ veryВ money driven. I chased promotions that I didn’t even want and I stayed in an industry that I hated for way too long because “that’s where the money was at.” Literally.

My wife hit the nail on it’s head when I was thinking about being a life insurance salesman when she said that “all that I see is the money and not what I’d have to do get it.” It was true.

I don’t think that debt was my problem. My job was.

I had this mindset that these debts were forcing me to stay at my job…that if I finally got rid of these debts once and for all, that I couldВ finally leave my job. That’s probably why I was so obsessed with our debts in the first place.

I hated our brand new cars. I hated that I got into student loan debt to get a degree that I didn’t even want anymore.

I was full of hate and it was easy to place the blame on our debts and that’s what caused this obsession.

If you asked me if I’d be happier if I was debt-free about a year ago, I would, without hesitation, say most definitely, yes.

But if you ask me that same question today, I’m not so sure because that’s not what I’m so focused on these days.

At this point, it is what it is when it comes to our debts. They’re something that we’ve dealt with for a couple of years now so it’s just something that we go through each month. We made the decision to get new cars and get a loan for them so we’re dealing with it. They aren’t making or breaking us but it would certainly be nice to have at least one car paid off but we have other things that we need to figure out first.

I’m happier than I was a year ago with all the other major aspects of my life that these debts have taken a backseat to the more important things; mainly just enjoying life and being content with all that I have.

I didn’t want to change jobs because I didn’t want to make less money.

I didn’t want to get a dog because all I could see was the dollar signs.

I didn’t want to go on vacation because it would cost money.

Screw that.

What’s the point of working so hard if you can’t even enjoy it?

Back to the original question at hand….would I be happier if I was debt-free?

Yes. I would be a little happier but not as happy as I already am from no longer obsessing over debt.

Onto Question #2:

Would our quality of life improve if we were debt-free?

To a certain extent, yes. But I don’t think it would be such a drastic change. We’d still live in the same place, drive the same cars, work at the same job, and live the same lifestyle.

The only difference is that we’d be saving more.

Maybe we wouldn’t feel as guilty treating ourselves to eating out after a crazy day at work? Maybe I wouldn’t feel as bad spending so much money to go on vacation to Germany to see family so we’d go more often? Maybe life could be more spontaneous since we’d have a little more wiggle room when it came to disposable income? Maybe we’d buy a vacation home?

Who knows.

But if you aren’t having fun while you’re in debt, you probably won’t have much fun once you’re out of debt too. You’ll probably splurge on things you don’t really need because you “deserve” them for working so hard and depriving yourself for so long, that you’ll get right back into debt.

Last question: What would we even do with the money that we save?

Most likely, we’d save it.

Maybe we’d go crazy and invest it in Vanguard or put more into an IRA. Maybe we’d save up for a house out in Washington state. Maybe we’d take more vacations. We’dВ definitelyВ rescue more pugs.

Whatever we’d decide to do with it, we’d enjoy the fact that we have more possibilities to make life more exciting and fun.

If you find yourself in debt, remember this:

You aren’t your debt. Stop obsessing over it. Life won’t magically get better once you become debt-free. Life doesn’t start once you’re out of debt. It started a long time ago.

Enjoy the little things. Create something. Do something you’ve always wanted to do. Stop focusing on debt. There’s so many more better things to do.

Besides, isn’t that what life is about?

Take some time to stop and smell those damn roses.

* * *

On another note, my Experiments page has been updated to include August’s results. It was a good month!


  1. I recently made my final payment to pay off my final debt and this is the first time I’ve been debt free in almost nine years.

    It is an extremely good feeling to have accomplished the goal of clearing my debts, however if I can be honest with you, I don’t really feel any different and I feel surprisingly guilty about this.

    It’s great that I don’t owe anybody else any money, but for the time being, or until my next wage arrives at least, I’m still at zero which means I have nothing.

    Good post, an interesting perspective on debt.


    • Congratulations on paying off your debt! I’d imagine that I’d react in a similar way as well. I’d probably go out to dinner to celebrate but then just put that money into savings instead of towards a payment and that will be that. You might be at zero right now, but it’s only up from here!


  2. I still remember making that last payment on my student loan and it felt pretty awesome. Actually I paid it down to something around $500 then made minimum payments because having that credit line open helped my credit score when it needed some help. Honestly for me it didn’t drastically change my lifestyle one way or another.

    But thinking about if you’d be happier being debt free is not the question you need to be asking. Of course you will feel better being debt free, but how? The real question is which option makes you happier over the next 10-20 years – paying your debt down at an accelerated rate or making minimum payments? Think about your slightly better lifestyle while making the minimum payments vs, the joy you will feel after making that last payment sooner. Student loan rates are very low, so the extra interest you are paying really isn’t something to lose sleep over. The car loans are a slightly different story, but probably only add up to around a thousand over 5 years.

    As an aside, if you have a business idea where you can make more than the rate on your loans, it makes financial sense to put your money into that business rather than paying down the loans. Can you buy a piece of equipment or even a house and rent it out? That would be preferable to paying down your loans provided you can be reasonably assured of making a better rate on your excess cash than your student loan rate.


    • Great points as always.

      I have about 9 more years on my student loans and about 4 left on both car loans. Student loans are at 3.4% and car loan is at 2.70% and .50% respectively so they really aren’t that high. It’s less about the interest for me but rather the increase in cash flow there would be once they’re paid off. It would almost double our monthly savings if we can get rid of all our debts but it’ll all happen in due time. We pay a little more towards each payment so it accelerates things a little but its nothing crazy.

      I would love to pump more money into a business but my wife and I have a deal that I can only invest money that I make from selling stuff on eBay, Etsy, and my other little experiments. Sometimes it sucks but this restriction forces me to be creative and figure out what’s really important and what’s not.


  3. Like most things, I think there’s a balance. Be aware of debt and have a plan to take care of it rather than be blind to it and add to it. But stressing to no effect is useless. I hadn’t thought about this before. I would say I’m more relieved than I am happier (as far as clearing debt.) We still have the mortgage so are not totally out of the woods yet. Can’t speak to what that will feel like but looking forward to it.
    Great post. Now I’ll nose around a bit. Hopped over here from ThinkSaveRetire so thank Steve:)


    • I agree that you should be aware of your debt and have a plan but you shouldn’t be consumed by it. It’s more of a little voice in the back of my head now instead of the thing that I spent a lot of time dwelling on like in the past. Welcome! I hope you find something you like. Steve and ThinkSaveRetire are great!


    • I agree. There is a fine line between being aware and being obsessed. I tend to be more aware these days as it helps my sanity and my productivity but it’s hard some days!


  4. Hey, that’s a great point of view. You have to enjoy the journey. It’s not fun if you’re miserable all the time. You just try your best to pay those debt off as fast as you can and that will be enough. Good luck!
    We still have mortgage debts, but we’re not stressing out about them.


  5. Hyperfocusing on debt and making yourself crazy is no way to live. I think the new balance you’ve found is really healthy. Trying to enjoy life as you go is really important.


  6. Interesting post. What is the thought process behind taking on a large student loan debt or any other debt? You and others who commented are definitely smart so some financial analysis must have preceded the debt decision, right? Maybe the job market is not forgiving and keeps wages depressed making it difficult to pay the ever increasing student loans? It would be good to understand what are the actual premises on which debt is taken. Besides, Higher education needs a major hack, I really hope someone does it before things really get out of whack.


    • Some student loan debt was taken on when I was younger and not as smart when it came to money. I used it to pay rent for an apartment with my now ex-girlfriend. There were surely better ways to pay for it such as getting a job but I took the easier way out. The rest of the student loans were taken out to help support my family. My dad quit his job and pursued entrepreneurship. We opened up a vintage motorcycle shop on July 4th, 2008 and we all know that that timing wasn’t the best. It was take out student loans to help pay the mortgage or lose our house so that was a no-brainer. On my wife’s car loan, she had a car that she drove until it wouldn’t go anymore and it wasn’t very reliable. This was before we lived together and had combined finances and she didn’t have much savings so buying a used car outright wasn’t an option. Plus, she wanted something that she knew would be reliable after dealing with major car issues for quite some time. My car was purchased because the family needed another vehicle as I was self-employed/a student and my dad ran the business out of our home but things didn’t go as well as hoped so he had to get a job and we needed another means of transportation. I had no savings to purchase a car outright as well, hence the student loans to help pay the mortgage part, so I had to do what I had to do. Sometimes there are many outside pressures that force you to do things you know aren’t the greatest choice but unfortunately, it seems like there’s no other way at that moment in time.

      Liked by 1 person

  7. Thanks for sharing, Marc! Debt can be unhealthy if you obsess over it and let it hover over you like a dark rain cloud wherever you go. In that case, the debt isn’t necessarily making you miserable; your brain is.

    I’m glad you’ve escaped from the negative mindset. As long as you keep chipping away at it while enjoying life, the debt will be taken care of eventually.

    Have you considered selling a car or two, and downgrading to something more affordable? Paying off all your loans isn’t the only way to become debt free. I made it a goal to be debt free by forty. I got lucky and managed to sell our house that had become a rental property a couple months before my fortieth birthday. The last of my debts disappeared with the signing of a SOLD document.

    -Physician on FIRE


    • “The debt isn’t necessarily making you miserable; your brain is.” I never thought of it like that but you’re right on the money! We have thought about possible selling one of the cars and getting a used car but we also have plans on driving both of our cars until they won’t drive anymore. We know what we have and what’s been done to our cars and you just don’t know that with a used car. I’m looking at the loans like it’s a sunk cost but that’s just probably all in my head as well. I’m a firm believer in goals so I could probably make it happen if I made it more of a priority. My focus at the moment is growing businesses to provide “extra” income. Congrats on reaching your goal and thanks for reading!


  8. I actually agree with just about everything you write all the time. I think this is the only exception. I have been debt free for over 20 years. I have written checks for my different houses since then. Being so made me accumulate money at a much faster rate. In my opinion, I would hate to be in debt and I am so very happy I am not. As a side note, I didn’t inherit any money, wasn’t given any, I just worked hard until I figured I had enough to retire. I was able to retire earlier that I thought because of all the money I was able to invest in numerous products because there there was no debt. Please keep up the good work!!!


    • Not going in debt in the first place would have been the best case scenario. They were done for various reasons which I touched on in a response to a different comment. By taking on these debts, there are certain opportunity costs that I’ve incurred that I take sole responsibility for. There was a point in time where I was obsessed with paying off these debts and that’s all that I was focused on and it made me miserable. With this change in my stance on debt, it’s better much better mentally for me. Financially, probably not, but sometimes it’s not all about the money. I would LOVE to be debt free right now but being fixated on it got me nowhere. Instead of obsessing over it, I’m more focused on creating a business/businesses to earn “extra” income which I could quite possibly use to pay off these debts and become debt-free sooner. Thanks for reading and being the devil’s advocate in this instance!


  9. We worked hard over 2 years to become debt free. I can tell you from my experience that it was one of the best decisions that we ever made. We wouldn’t be in the same place now if we still had all those debt payments hanging over our heads. However, we still vacationed and enjoyed life while paying off our debts. We worked our butts off, but it was a common goal for both me and my wife. We now have 2 kids and I am actually a stay at home dad and we would never have been here if we still had all that debt. Our savings is there if we need it and we are now doing some investing. But, we have loosened up and are having a little more fun and slowing down on the hardcore sacrificing since we are now just building wealth. I’m sure we could build it faster if I were to go back to work, but then our family time would suffer too much. I like your post, but I still feel that people should work to build margin in their lives by getting rid of their debt and learning to save up and buy things. Delayed gratification is a tough pill to swallow in this country though. Thanks for sharing your story!


    • If you, or anyone else, has the discipline to achieve such goals in such a relatively short time-period, then I have nothing but respect for you/them. I tried it out and it just wasn’t for us. There’s nothing wrong with trying it out and figuring out what works best for you and going with that. We have some things to figure out but once we do, we plan on paying off our debts more aggressively. It’s all about finding the balance that works for you.

      Liked by 1 person

  10. Yes, stressing about debt–or anything else–to no purpose is no good. I don’t believe I was happier after my wife and I became debt free compared to when we had debt. But I surely felt free-er. рџ™‚


  11. The euphoria of paying off those first couple debts in the debt snowball is very real and powerful. And admittedly, I feel better having paid off my student loans and I don’t have much debt on my plate anymore. But the more I think about not having debt, I don’t find it to be an exciting destination. Rather, it’ll just be a chance for me to set new and challenging financial goals.


    • I’m sure it’s a great feeling which I’m looking forward to once things are paid off. But like with anything, debt pay off should be done in moderation and not drive you insane like it did to me. You should also be able enjoy other aspects of life as well while you’re doing it.


  12. Interesting question and GREAT topic. I do agree with you to a certain extent – that is, focusing solely on debt and ignoring your life in general probably isn’t the answer. Obsessing over *anything*, in fact, is probably an unhealthy thing to do, even if that thing is getting rid of your debts.

    However, I would submit that being debt free greatly opens up your options in life. While saving more money is a byproduct of debt-free-ness, it’s not the only thing that comes with it. You instantly begin looking at things in a very, very different way. You get to ask yourself, “Is this worth going into debt again”? And believe it or not, you might be surprised that the answer isn’t *always* “no”. But when you don’t have any debts, your perspective on finances I believe is a little cleaner. Fresher.

    I’ve experienced both sides of this coin. A few months ago we officially hit that debt free mark. For me, it’s changed the way I look at finances.

    However – like you said, I can’t really say that it’s made me “happier”. In fact, the day that it happened was relatively noneventful. I was like, “Cool”, and that’s it. No celebration. No sigh of relief. Once our mortgage was paid off via the sale of the house, I smiled, said “Finally!”, mostly due to the delays with the sale, and that was that.

    In the end, I think you’re right that if the drive to get debt free actually drives you *insane*, then you’re probably letting this goal get the better of your life. It need not CONSUME you, after all. I do believe, however, that actively pursuing a debt free life is incredibly wise, something that we should all take a very concerted effort to achieve.

    My opinion only. рџ™‚


  13. 2017 is finally here and after spending the entire year of 2016 making sacrifices (mostly my other half being away for work), we have decided to really attack the last $22k debt we have by February.

    I really feel like being debt free WILL make you happier. Like you said, smell the damn roses. And really, what is the point of working so hard when you cannot enjoy your money. The debt keeps us away from each other often and unable to enjoy our new home in a new state. If we are debt free (last student loan and credit card), he wouldn’t be away so much & we can travel more (Now is the best time because we have no kids or a mortgage haha)


  14. Someone like me for years – obsessed with the debt. I kept track of every payment, cuss at how much interest were taken from our minimum monthly payment, how much we’ve got left to pay, etc. I was cranky whenever it was time to pay the bills. Sometimes I had a hard time going to sleep bc numbers would be floating in my head rather than sheep. рџ™Ѓ
    To answer the question, I would say Yes my boyfriend (of 9 years) and I would be much happier being debt free. We started dating once he started paying back his student loans (they join us when it comes to celebrating our anniversary -_-). The last year, we spent it apart bc he was always away at sea trying to get as much money as possible so we can feed a big chunk into savings and pay off $22k. We are almost there. Being debt-free means he will be home more & a bigger savings account means he can work a little less, have a well deserve vacation at least 1-2 times a year.

    We could splurge on things, but the way things were last year with missed birthdays and holidays, were using that as motivation to CONTROL our spendings and to not go back into debt. Too many sacrifices.


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