Everyday Habits of Debt-Free People

by Lynn

There are certain everyday habits of debt-free people you should emulate if you want to be debt-free. It’s so easy to go into a downward spiral when you go into debt. It might be like digging yourself into a rabbit hole and it’s incredibly stressful. Debt will derail your financial goals. So how can you live debt-free?

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Here are some everyday habits of debt-free people you can adopt:

Budget

One of the everyday habits of debt-free people is always following a budget. Unless you’re a multi-millionaire who has money to blow, you need to stick to a budget. Before your paycheck hits your account, you should know how you’re going to use your money. Keeping track of how you spend your money allows you to be intentional about how you spend your money. It will also help you identify your weak points when it comes to money. You can learn how to budget here.

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Financial goals & Piorities

If you want to be debt-free, you need to set your financial goals and priorities. You need to make plans on how to accomplish your financial goals. Whether it’s finishing off your mortgage, saving for a car you need a plan to make it happen. Goals without plans are just wishes. Write down your goals and make action plans so as to actualize what you want to achieve. Debt-free people always have plans and know their financial priorities.

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Automate your savings

Saving money is already challenging enough. Automating your savings account ensures you actually save and make progress. You can have a savings account to help you clear your student loan or mortgage. Automating your savings can help you get closer to your financial goals.

Emergency Fund

Having emergency funds is very important as it acts as a contingency plan. Essentially you should have 3 to 6 months’ worth of expenses in your savings account before you start investing. This makes sure you’re well covered in the event something goes wrong. You might get laid off, your business may go bankrupt. Having an emergency savings account prevents you from going into debt in the event of an emergency.

Live Frugally

Frugal living is about learning how to live on less or on what you need. Live below your means if you want to go debt-free. One of the habits of debt-free people is living below their means. You don’t need the latest designer outfits and the latest iPhone. Don’t go broke trying to look rich. You don’t need to use up your credit cards to buy things you can’t afford with money you don’t have. You can treat yourself every once in a while but be careful about splurging.

Be Intentional

If you want to be debt-free you have to be intentional about your spending and be very careful about not wasting money. Being intentional about where every penny in your account goes is vital. Assess your finances and if you are spending your money on things that don’t align with your goals get rid of them. Check your subscriptions and memberships and if you’re paying for things that you don’t need. Get rid of the subscriptions you don’t require or those that are not worth your money.

Say No

Prioritize your financial goals by saying no to things that do not align with your goals. If your friends propose meeting at an expensive restaurant for a meet up you can propose cheaper options or tell them you’re strapped for cash. There’s nothing embarrassing about wanting to get your finances in order. Say no to things that will strain you financially. Remember your financial goals. Once in a while, you can treat yourself to a nice spa day with friends but don’t overindulge.

Use cash

Use cash for your purchases as opposed to credit cards. This will make you more conscious of your money decisions. You will also start to live within your means. Swiping your card does not have that ‘money is leaving my account’ effect as opposed to giving out cash. This will reduce your chances of getting into more debt.

Research

Habits of debt-free people include research. Before buying anything make sure you research all possible options. This way you will not overspend and you will not spend your money on low-quality items. Just because you’re trying debt-free does not mean you buy everything cheap. Cheap could mean expensive in the long run. Research all buying options before you make a purchase this way you will always get the best value for money. Make sure you get all possible discounts and coupon codes as well.

Mindset

If you want to go debt-free you need to change your money mindset. The law of attraction works for finances as well. Think about money in abundance as opposed to scarcity. Make a list of all your toxic traits when it comes to spending money and start working on them one by one. There are certain behaviors we develop as we grow older that might prevent us from accomplishing our financial goals. Mindset is very important when it comes to managing debt and finances.

RELATED: 8 Toxic money habits leaving you broke and how to detox yourself

Financial Literacy

If you want to be debt-free, you have to educate yourself about finances. Millionaires did not become millionaires by accident. You have to know how to make money, grow money and more importantly keep the money you make. You can read personal finance books, listen to finance podcasts or watch masterclasses on finance. This will help you clear your debt and get closer to achieving your financial goals.

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Multiple Streams of Income

Clearing your debt is only half the battle. Staying debt-free is another battle altogether. With multiple streams of income, you can manage to stay debt-free without any struggle. There are many ways you can have multiple streams of income. You can start a side hustle based on your interests, a Youtube channel, a podcast, a handmade shop, or even investments. There are multiple ways you can make extra money. You just have to be consistent as the first couple of months may be rough. Find a way of making passive income. You don’t need to constantly have burnout to make more money.

Track your progress

Tracking your progress is one f the habits of debt-free people. It helps you keep on track and stay accountable to your goals. If you want to clear your debt, make a plan and have some follow-through. Make a list of all your financial goals including your debt repayment plan and track your progress. It’s very motivating to see how far you’ve come. It might even stimulate you to do more.

RELATED: Debt repayment plan: The ultimate guide

Discipline

If you want to be debt-free you have to be disciplined when it comes to how you handle your money. Strictly stick to your budget and financial goals. If you get a little extra cash from a side hustle or as a bonus don’t go splurging on things you don’t need. You can use the extra money to pay off a debt or to invest it. You might struggle when it comes to sticking to your budget but be disciplined enough to try your best to maintain it.

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Get Comfortable with Being Uncomfortable

If you want to be debt-free you have to get uncomfortable. You have to change your spending habits which can take a great toll on you. You might lose some friends because they just don’t understand why you want to eat at home as opposed t the fancy new restaurant. If you want to accomplish your overall goals you have to get comfortable with being uncomfortable.

Patience

Paying off debt is no easy task. It’s actually a great accomplishment if you are debt-free. One of the habits of debt-free people is patience. Stick to your own journey do not compare yourself with others. Stay patient and motivated in your own journey. Patience and persistence will get you there. It’s no easy task but when you do become debt-free it will be totally worthwhile. Don’t be tempted t get that designer outfit simply because you saw your friend on social media flaunting it. Always remember your financial goals.

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