When Debt is Gone, Will Dreams Come True?

Are people really happier and better off when they escape the chains of debt? Many overburdened borrowers expect to be.

While some are finally able to loosen up their budget, and yes, even crack a smile more often, not all do. Here are some common before-and-after debt-dreamers, and how you can make your financial fantasies both realistic and achievable.

Before: the dreams

Unquestionably, debt can be a barrier to your desires. When it's down, you'll be up, right? That's what Derrick Hayes of Columbus, Ga., is counting on. Hayes is a juvenile corrections officer byday and a motivational speaker by night. He's also a father of three children who have some pretty lofty ambitions, which he hopes to actualize when funds are free.

"My goal is to pay off my debt and be able to provide a better quality of life for my family," says Hayes, who owes nearly $15,000 in school loans and credit card debt. When it's gone, he'll use the extra money to invest in his kids' talents. "My daughter DeMay, 15, is a singer; my daughter Amber, 13, is a hip-hop artist named Double A; and my son Alex, 9, is interested in developing game applications."

Hayes plans to buy studio time and photo shoots, and enjoy a less money-focused life: "I'll have more time, more room to work. I won't think, 'I have to pay $100 to this credit card and this to the other. Every day I'm working to pay it off, so it will put me in the mindset for me to do things easier."

As for Kristy Smith, a writer from outside Lansing, Mich., whose medical bills total nearly $75,000, she hopes to buy a big log house on a lake after paying it all off. "I realize it's lofty,but that's what I want."

Smith has another vision: tosecure the future of her 27-year-old autistic son. "I would set up a savings account. Social Security Disability is not that much, and he needs supervision,"she says. To get there, she's reworking her budget and staying optimistic. "It's not going to take forever. I will get it down. I will get my log cabin, and myson will be set up."

Others, such as Tiffany Victoria Bradshaw, just wish for more luxurious spending flexibility. Bradshaw is a marketing brand strategist living in Los Angeles. When her clients delaypayments, it negatively impacts her own bottom line. "As a small business owner in a recession, money is funny, more often than I would like it to be," says Bradshaw. After the economy improves and everythingis back to normal, she plans on treating friends to drinks and dinner more frequently and taking an exotic tropical vacation for at least two weeks.

After: the realities

Once debt is deleted, do such dreams materialize? That depends on the person and situation, of course. It did for Shane Fischer, an attorney living in Orlando, Fla. He experienced an abrupt,positive change when he repaid the $10,000 credit card balance that he acquired after a layoff. "Life is better!" says Fischer. "I feel less stressed because I don't owe anybody anything. The best part is, now I use the cards to accumulate points. I have enough rewards points to pay for a trip to Hawaii to be in a friend's wedding!"

Sometimes the reality even surpasses the goals. For example, Los Angeles resident Cyndi Finkle actually credits financial distress for her success. A $16,000 wedding bill inspired her to take a huge risk that paid off in more ways than she expected.

Finkle and her husband planned on repaying the balance quickly, but that goal was derailed when he accepted an acting job with phenomenal opportunities, but that slashed his weekly income from $1,500 to $350. "I was a photographer at the time and in order to pay of four debt, we would need to bring in more money. This is when and why I started my company, Sunday Night Dinner, a craft services company that feeds crews that work on television shows. Had we not needed the extra income, who knows if I would have started it." Moreover, Finkle says that paying down debt while getting her business off the ground made them true partners from the beginning.

However, Holly Wolf, chief marketing officer for Conestoga Bank out of Chester Springs, Pa., says that her outlook and lifestyle remained unaffected after deleting her debts. "Nothing changed since we paid off our debt, but I didn't expect it to,"says Wolf. "We were always savers and not spenders. That won't change because we are debt free."

Create can-do, will-do debt-free dreams Go ahead, fantasize about a more beautiful tomorrow -- it can be what motivates you to work harder and spendless so you can rid yourself of arrearage as soon as possible. When the weight of debt is gone, a thrilling sense of lightness is almost guaranteed.

The giddiness, however, may be short-lived. "When you pay it all off, you will feel relief, that's absolutely true," says Gail Vaz-Oxlade,author of "Debt Free Forever" and host of the television program"Till Debt Do Us Part.""But you will reset your happiness marker in a few months. We adapt to being debt-free."

"Getting out of debt doesn't change you, it just changes your finances," concurs Wolf.

The key is to develop achievable goals, so you don't set yourself up for failure and disappointment. According to Manhattan psychologist Joseph Cilona, to determine if a dream is reasonable, break it down into specific concrete steps and smaller goals needed to achieve it. "Do some research and put some effort into figuring out possibilities," says Cilona. "If you find yourself at a complete loss of how to go about moving toward your dream, you might want to try to scale it down a bit."

Delay peace and joy until your credit card balance is at zero? Don't do it. Getting out of debt is wonderful,but it won't make your life perfect. Enjoying the present, however you can,says Vaz-Oxlade, is what you should aim for: "Happiness is not related to money. So find it elsewhere, now! Socialize with people who appreciate you, do the things you love."