5 Ways Bad Debt Can Ruin Your Life (2024)

By: Michael Millington

Debt can be a constant pain for some people because of its sheer nature. Everyone knows that debt is a struggle but not everyone knows the extent of impact debt problems can have on a person’s life. The amount of debt that can pile up over the course of your life can create serious problems. Not handling debt related issues immediately can leave you open to worse financial issues down the road. For those struggling with debt, here are a few ways debt can actually shorten your life.

1. Bad Debt Can Cause Stress

Bad debt can lead to stress by limiting your ability to enjoy life. Without a system to manage your loans and pay off credit card debt your stress can increase and take years off your life. Not to mention the constant stress debt collectors can place on you to pay off your debts.

In order to get rid of the stress of bad debt, you should look into available debt relief options. There are many available debt reduction strategies that can help lead you to debt elimination. From credit counseling and bankruptcy to debt management and settlement, you’re never without ways to recover from debt.

When looking for a debt relief company, make sure that they are reputable, that they have certified debt specialist, that they are experts at resolving debt issues and that they meet your debt relief needs.

Using a third party company to resolve your debt relief issues will take the stress of getting out of debt off your shoulders and get you on the road to debt freedom. The debt professionals are experienced and will use their relationships with creditors to get you a solution that is favorable to you.

2. Your Credit Score

Your credit score is an important part to your financial health, it is a measure of your risk to a creditor. Creditors use this score to evaluate and assess your potential to payback your debts on time and in full. If a creditor feels that you don’t meet their standards, they won’t approve you for a line of credit, which could greatly impact your financial future. A bad credit score can hinder your ability to take out a loan, purchase a car or shop for a house.

Consider paying off credit cards fully before using them again in order to keep your credit score in good shape. Much like loans, credit cards don’t have to be paid in full immediately. A proper budgeting plan is the best and often fastest way to pay off credit card debt.

The negative impact of carrying debt can have a significant impact on your credit score. When you have a heavy debt load that you can’t pay off, your credit score will start to go down resulting in a bad credit score and report. The worst part is that it’s easier to damage your credit score than improve it. Once it’s bad, it could take months even several years to improve your score to an acceptable number.

3. Holding Multiple Jobs

When faced with debt many people look to working multiple jobs to pay off what they owe. Most Americans can work multiple jobs and still end up with bad debt.

While working multiple jobs is one way to try and handle your debt, a much more effective debt reduction strategy is to enforce a strict budget on yourself. Most people don’t know that they can achieve debt freedom with only one form of employment. Once you create a budget that works with your finances, commit to it and you will start to see major changes in your personal finances. You will start saving more, you will be better prepared for emergency situations and you will be able to pay your bills on time.

Another option is to ask your job if they have a debt management system in place to help you. Some places of business can automatically set some of your income aside to pay off debt. All you have to do is keep working and you’ll see your debt shrink until it disappears.

A third option could be asking for a raise. An increase of a couple of dollars could be the bit of funds you need to pay off your debts and keep your finances under control.

4. Saving For Retirement

Even without being in bad debt, saving money for retirement is a hard thing to accomplish for anyone. Without proper retirement planning there is no way you can peacefully retire without thinking about the money you could have saved. Bad debt makes it that much harder to save for retirement.

When it comes to saving for retirement, you should start early. There is no specific amount you need to save weekly but having a plan is place can be very useful. Start by calculating your monthly income and saving a percentage of your money. The amount will change depending on the amount of money you make, but the important thing is that you are saving a portion of your income for retirement. Remember to keep your savings fund separate from your savings and checking accounts so that you won’t be tempted to use it and will be able to manage your money wisely.

Although many jobs have methods of saving for retirement, i.e. 401K, consider opening up a savings account specifically for retirement saving. Many banks offer a CD account that you can put money into gradually. Your money matures over time, builds interest and cannot be touched until a set date, making a CD one of the perfect was to save for retirement.

5. Making Large Purchases

Having bad debt can hinder your ability to buy a car or even a house. Having debt issues can cause you not to be able to achieve these and other life goals. If you have early debt problems, these can have disastrous consequences in your later years.

Creditors have strict guidelines when dealing with people looking for loans. Having a credit score lower than 740 isn’t the worst thing, but creditors will see you as someone of questionable credit history.

Try talking to a professional about debt relief options. Know that many who do bring their debt questions to a professional are planning on buying a car or house in the future. Make sure you let it be known that your main goal is to eliminate your debt. A professional debt relief specialist can offer you methods of debt recovery that can help you reduce debt and eventually repay debt while still saving and budgeting for your future car or house.