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Independence Day is our nation’s day to celebrate freedom. But if you’re one of the millions of Americans up to your eyeballs in debt, you may not feel very free — at least not financially free.  Getting out of debt feel like a monumental struggle. But if you can accomplish that goal, becoming debt-free can offer more than just financial benefits. Here are five freedoms debt denies you:

The Freedom to Have Fun

Getting out of debt gave David Bakke back something he missed terribly when he was in debt: the ability to truly enjoy his life. Bakke, who is now a contributor at Money Crashers Personal Finance explains: “While I was falling deeper into credit card debt, I bounced quite a few checks and had to pay many overdraft fees. As a result, for about two years, I couldn’t even open a checking account. This was a major infringement on my freedom, as I lost the ability to pay my bills and manage my finances with the ease that a checking account provides. I had to either keep my money in a savings account or at home in cash, and I had to purchase money orders on a regular basis.

When I finally began to take drastic measures to solve my debts, I unfortunately also began to lose out on quite a few enjoyable things. I missed plenty of fun activities with friends, and I couldn’t afford to travel home to spend the holidays with my family on several occasions. Essentially, I became a slave to my debts. I had to watch my spending at every moment, and needed to scrutinize every single purchase.

Although I eventually emerged from my debt, it took quite a toll on me while I was working to eliminate it. The immense weight that was lifted from my shoulders the day I paid off my last balance is a feeling that I will remember for the rest of my life.

Now that I am debt-free, I have much more freedom. Traveling home during the holidays is no longer an issue, and I am now able to contribute to an emergency fund, so that if an unexpected expense arises, I can afford it without tapping my checking and savings accounts. I’ve also been able to start saving for retirement through my employer’s 401k program. I also recently started a 529 college savings program for my son — now I have the peace of mind knowing that putting him through school will be a little less stressful financially.”

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Free Tool: Credit Report CardThe Freedom To Say No

Mary Reed, a publicist and ghostwriter, says that having minimal debt allows her the freedom to work with clients she enjoys — and to say “no” to others. “If I get the sense that a potential client is going to be difficult and create a lot of stress in my life, I have the freedom to turn down the work,” she says. “It also means that if a client turns out to be a big problem once we begin a relationship with one another despite my efforts to improve our relationship I can end it.”

Working out of her home office in an historic neighborhood in Austin Texas, Reed says, “I want my work life to be fun and I want to enjoy helping my clients. So it’s just not worth it to me to fret and lose sleep over impossible-to-please, overly demanding clients, no matter how much money they may be willing to pay me. Not being ruled by debt buys me the freedom to create the work life I want.” (Disclosure: Reed coauthored a book with me — and I often envy her adventures!)

[Related Article: Did the Founding Fathers Have Bad Credit?]

The Freedom To Get Your Life Back

“Debt equates to time,” says Steve Rhode, founder of GetOutofDebt.org. “Most people need to invest some amount of time and labor to earn money to repay the debt. Without debt you get your life back and much more time to do whatever it is you want to do.”

He elaborates, “People think about debt in the wrong context. A new car payment doesn’t cost $600 a month, it costs twenty hours of labor each month at a job you might not like. When you put debt into that framework it can be a whole lot easier to evaluate future debt based on how much of your labor you are willing to have to work to get it…. So maybe you want to work less or work at a job that you absolutely love but that pays less. You can absolutely do that if you have less debt. Just remember this relationship: debt = future labor.”

The Freedom of Choice

“Debt, virtually any form of it, can deny you freedom of choice,” warns Michael Bovee, founder of the Consumer Recovery Network. “The decisions we made for purchases yesterday impact our today and tomorrow. When we obligate ourselves financially using debt to homes, cars, and all manner of consumables, we are committing our future time and energy to pay for them. We now have less freedom to make different choices for our future.”

“Think about the freedom to choose you would have today when it comes to a job, travel, children, or retirement planning,” he says. “If you were not obligated today to pay for yesterday, how differently would you look at tomorrow? Carrying debt can often mean you are robbing from yourself without even realizing it.”

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The Freedom to “Go West” (or Wherever)

Many of the early American settlers left their countries of birth to create a better life in America. Today, the estimated 11 million American homeowners whose homes are underwater don’t have that freedom.  They feel stuck in their homes without the opportunity to move for better jobs or to lower their living costs.

Some seven years ago, Kathy and John Huggins sold their Florida home, bought an RV and began a life of full-time travel. One of the reasons they were able to do that is because they paid off debt with the sale of their home. “We put down a large down payment on our rig, so the payment…is not very much,” she explains. They pick up work in the campgrounds they visit and host their own radio show, Living the RV Dream, from the road. Like many other full-time RV-ers they have met, they just wish they had done it sooner. “It’s just a wonderful, friendly, group of people out here. You’re never alone. If you have a problem, talk to your neighbor, they’ll help you fix it. It’s just a real friendly, outgoing group of people and it’s really an enjoyable lifestyle,” says Kathy.

What freedoms has debt robbed you of? What freedoms have you discovered after paying off debt? Share your thoughts in the comments below.

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 Image: Justin Grandfield, via Flickr

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