Getting out of debt is definitely a big milestone. That feeling of relief you get when you’ve finally hit that zero on your debts is really something that we always look forward to.
We all know that getting out of debt is not easy however staying out of it is even a bigger challenge – a challenge that most of us keeps failing. The idea of staying debt-free may seem like an unattainable dream but I guarantee you, it is certainly not impossible.
Try to think about all those people who stopped living paycheck to paycheck, the ones who were able to pay all their student loans, credit card interest, and all their monthly payments.
Have you ever wondered what their habits are for living a debt-free life? If you do, then I have great news for you.
Today, I have decided to gather 7 effective habits of debt-free people to give you that inspiration and motivation that you need for your financial journey. Check them out!
Sticking to a budget
Having and earning a good income doesn’t necessarily mean that you no longer need to have a budget. A budget is not something that you associate with poverty – having a budget simply means having a plan for the money that you have.
That’s why debt-free people always take it into account to sit down every month and plan their monthly expenses, from groceries to utilities and of course for their savings and emergency funds.
Most importantly, they don’t allow themselves to be tempted and manipulated to deviate from their budget.
Pretending to Make Less
Instead of spending every dollar or splurging it over our wants, debt-free people pretend that they make less than what they really do and put that extra money towards their savings.
This means living below your means or not spending more than what you are making. So, instead of planning on getting the newest car, put that money towards your emergency funds instead.
Putting away credit cards
I understand that credit cards are very convenient and yes if you pay off the full balance each month, those interest charges won’t hit you.
However, debt-free people know that credit cards can become very expensive. It’s always so easy to overspend when you are using them and we should know that spending money that we don’t have is certainly a bad idea. Don’t buy now then worry about how you will pay it off later.
Knowing their priorities
We always need to recognize how hard we’ve worked to get that income so it only makes sense to spend it wisely. Know your priorities and always stick to your budget. Remember, all the sacrifices that you are doing now will definitely pay off later.
And surely by doing this, it will help you steer away from any financial troubles.
Always finding ways to save
Another common habit that debt-free people have is that they are always finding ways to save. It could be on monthly groceries, cutting off any unnecessary expenses or reducing any monthly bill. They always look for alternative options on how to save more money each month.
Debt-free people make sure to pay themselves first. That means the moment they get their paychecks, they always make sure to save a specific amount of money each month and whatever’s left will be budgeted to cover for their monthly expenses.
If you need more wiggle room in your income to start saving more money, I wrote an amazing post on perfect side hustles that you can do while working full-time. Check it out!
Planning for long-term goals
Debt-free people are always looking at the bigger picture – they plan for their long-term goals. They are very much aware that the choices and actions that they do now will greatly affect what’s in store for them in the future.
So, try thinking about your plan for the next five years and make sure to think of ways on how you’ll achieve them.
People who are debt-free has self-control. It may not always be perfect but they’ve learned to grow into it. They are able to delay gratification.
They know that they don’t need to keep up with the newest trends and most especially, they don’t feel the need to impress people with the material things that they own.
If they don’t have the money to buy something that they want, instead of using credit cards to pay for it and live with the interest charges after, they save money.
Staying out of debt is not something that we can perfect overnight. This takes practice, effort and of course sacrifice. But as long as you are willing to put that extra hard work and dedication in making it happen, then it definitely will. So, let’s start doing this today!
Do you have anything to add on this list? Let me know in the comment section below or send me an email, I would love to hear about it!