Paying off even a small amount of debt can have unfathomable benefits on your life explains Paul Haarman. Case in point: after paying off just $1,000 of her now ex-boyfriend’s credit card debt, one woman was able to gain almost an entire year of additional freedom from work.
Getting out from under someone else’s debt can be freeing for both parties involved — separating yourself financially will allow you to retain more control over your money and improve your credit score, while giving the person you split with a chance to start afresh without the weight of that burden hanging over their head.
However, there are also some surprising effects that paying off another person’s debt can have on you as well See below for five unexpected benefits that come along with paying off someone’s debt:
You’ll save on Your Taxes
If your life coach has been telling you to pursue “the butterfly effect,” this is another case of how taking the time to pursue something that at first glance looks insignificant can yield some truly astounding results. The butterfly effect, which suggests that by making small changes or decisions in one area of your life, you may trigger more widespread changes down the road, applies here in a big way — when you pay off part of someone else’s credit card debt, they will often report the paid amount to the IRS on their end. This could qualify for a discount on your taxes. Just make sure that if it does apply to your situation, you file all applicable paperwork with the IRS. In the meantime, however, you can rest easy knowing that you helped someone out and got rewarded for it in the process says Paul Haarman.
You Might Be Able to Get Your Ex to Pay Back His Share
While many people would advise against getting involved with someone else’s debt, there are some benefits of loaning money to an ex — they’ll be more likely to pay it back if you helped them out by paying off even a small amount of their debt. Doing this will not only help you recoup your losses faster; it’ll also show that you’re serious about wanting to move on from the past and work together toward building financial security moving forward — something that could strengthen any future relationships between the two of you.
You May Have a Chance to Save More for Your Retirement
In addition to getting a discount from the IRS, if your significant other was in debt because of an old or broken-down car and you paid it off, he or she may miss out on claiming that vehicle as a dependant. If this is the case, they also won’t be able to claim any deductions for its depreciating value — potentially giving them more money to put towards their retirement savings.
You’ll Gain Experience Negotiating Someone Else’s Debt
One of life’s biggest lessons is learning how to manage your emotions. When it comes time to negotiate with both creditors and clients. While there are few experiences in life that can teach you more about negotiating than actually doing so, paying off an ex-boyfriend or girlfriend’s debt is a close second. It’s very possible that anyone with whom you’ve had a romantic relationship owes money. To someone else — be it their student loan servicer, car dealership, Phone Company, etc. Working out payment plans and setting up realistic expectations will help you develop valuable negotiation skills for future financial endeavors.
You Might Get Back More Money Than You Put In
If your life coach keeps telling you that “the universe rewards those who hustle”. This story is proof of just that explains Paul Haarman. While there are few guarantees when paying off someone else’s debt, the one guarantee you do have is. That if you’re willing to pay down even just $1,000 of another person’s credit card debt, you’ll be pay back with interest
While paying off someone else’s debt is never a good idea in the long run. If you’re in a position where your boyfriend or girlfriend may be in danger of losing their house. And also happens to owe money on their car, this is an incredibly advantageous time to pay off part of that debt.