Study: Debt Is Keeping Almost 60% of Americans From Reaching Their Goals

Debt can damage your ability to accomplish your goals. Here's how to deal with that.

For millions of Americans, debt is an albatross hanging around their necks that holds them back from doing the things they most want in their lives.

While it's not a surprise that owing money to creditors can be a burden, new research from Northwestern Mutual shows that debt can affect people's goals to a shocking degree. It even impacts important life decisions that may not seem related to finances at first glance.

In fact, close to 60% of Americans report that debt has prevented them from hitting some big milestones.

Here's how debt is affecting borrowers

According to Northwestern Mutual, 58% of people who owe money say that this financial obligation has impacted these key life goals:

• Making big purchases: 36% of those who owe say they've delayed a substantial purchase because of their existing debt.
• Saving for retirement: 29% say they've put off investing for their later years due to their debt.
• Purchasing a home: 18% are waiting to become homeowners because of what they currently owe.
• Having children: 8% haven't started a family due to their debt.
• Getting married: 7% have put off saying "I do" as a result of their ongoing relationship with creditors.

Having children and getting married may not seem like decisions that would be dictated by a debt balance, but the fact is that you join into a legal -- and financial -- partnership when you marry. As a result, it can make sense to avoid tying your finances to someone else's when you're struggling with debt. Having children is obviously extremely expensive, so you may not feel equipped to take on the task when you owe money.

And of course, making big purchases, saving for retirement, and buying a home are all more difficult when you have a lot of debt. Since you've committed money to paying your creditors -- including covering interest costs -- you have less available to devote to saving for a down payment, investing in a 401(k) or IRA, or putting money into a savings account. It can also be harder to qualify for a mortgage loan if you've got a lot of debt.

What can you do if debt is affecting your life goals?

If debt is impacting your choices, you've got two primary options:

• Pay off your debt ASAP so you can redirect your money to other things.
• Make a debt payoff plan that budgets money for early debt payoff and balances that with other goals.

The best choice for you depends on how high your interest rate is, how long it will take you to pay off your debt, and what your financial goals are.

If you don't have a ton of debt or if your debt has a very high interest rate, it makes sense to focus first on paying it off. This means continuing to put off other objectives while devoting all your spare cash to debt paydown. If you take this approach, you'll want to be really serious about becoming debt-free ASAP so you don't delay your goals forever.

Another option is to devote some of your money to becoming debt-free while also budgeting for other things, such as saving for retirement. If it will take you a long time to repay your debt and you can ensure your interest rate is reasonable, this approach often makes sense. This way you don't end up missing out on things, like having a child or scoring tax breaks for retirement savings or benefitting from the compound interest that investing can provide.

If you're able to, you may want to use a low-interest personal loan to refinance your debt. You could then pay that loan according to its set schedule, while using your other spare cash toward your life goals. Or you could lower your interest rate using a balance transfer credit card and pay as much as needed per month to repay your balance in full before the 0% promotional rate expires while using any cash left over for other goals.

Whichever approach you choose, the important thing is to set a budget for debt payoff and for your other goals. That way you won't end up just paying the minimum to your debt while using the fact you owe money as an excuse to put off other important milestones for years.

By making sure you're spending responsibly and allocating funds to debt payoff and saving for a home, marriage, or children, you'll get the most value for your hard-earned dollars.