Do you really have people who are actually debt-free? You may be wondering how to make your money work for you and live comfortably without debt.
Yes, it’s possible!
It’s possible to become debt-free and stay that way as long as you desire. They aren’t many individuals promoting this debt-free lifestyle other than Dave Ramsey. I mean, it may seem difficult at first.
There are certain habits and characteristics that you must have in order to be debt-free. If you put these habits into practice you’ll be on your way to success.
What Does It Mean To Be Debt-free?
We all know the stress that comes with having credit. From student loans, car payments, credit cards to even medical debts. Chile, the pain we feel.
Everyone wants to retire early and have more free income but is that possible with a ton of debt.
I mean, if you don’t take this seriously you may end up dying in debt. According to this data, 73% of Americans die in debt.
Imagine only the grave can rescue us from such a dilemma! But we have the power to change things right now!
In addition, you’ll be able to be a better parent to your child and provide them with the necessary things needed. And you’ll even have less financial tensions in your relationships.
Just think about the freedom you’ll have being debt-free. I hope that was enough to get you on board with me to not only learn the habits of people who are debt-free but to make some lifestyle changes also.
Habits of Debt-Free People
Figure Out What They Want
Many people are confused as hell. If you don’t know what you want then you can’t plan ahead for the future which means you’ll end up putting your money in places where you get no returns.
The fact that you’re on this post, you’ll already know why you need to get out of debt. The reasons are quite obvious as stated above!
With that being said, what do you want?
It’s like you went to school to learn (why) but what do you want to do when you leave.
Now, ask yourself, “What do you want to do after being debt-free (the ultimate goal)?
Some examples would be:
- Start a business
- Save for retirement
- Learn a new skill
- Invest your money
The goal is to always have cash flow consistently and if you know what you want then your money will go right there which means you’ll spend wisely.
I hope that makes sense!
They Do Regular Budget
You may have heard this a thousand times. I know, I get annoyed by reading the same thing over and over.
But, it’s really important to budget your money. Not only to get out of debt but to also manage your money.
A Budget is basically dictating where your money goes and in what quantity. It allows you to be the master of your money instead of being a slave to it.
With budgeting, you’ll prevent unnecessary spending and reduce the likelihood of ever creating a debt.
Make budgeting a habit and before you know it, you’ll definitely be debt-free.
Related: Budgeting for beginners 101
Save Like Crazy
Whether for a short term goal or long term goals. Saving for rainy days or even for the unknown will definitely keep you from going broke.
People who never go broke are those who save for the upcoming future. Nothing will catch them by surprise because they are already prepared.
You can start out small or use saving money challenges found on Pinterest to help you save money.
Related: 6 Lazy Way To Trick Yourself Into Savings
Examples of short term goals you can save for would be:
- Emergency funds
- Home improvements
- Buying a car
Examples of long term goals to save for:
- Saving for children college fees
- Retirement fund
- Starting a business
Whatever your goals are, start saving for it now.
Have many streams of income
Not many people understand this concept. If you lose your present job now, what will be the outcome?
You don’t want to rely entirely on one income alone.
One of the ways people get out of debt is by increasing their income by taking on a side hustle.
A little extra money can go a long way. There are many reasons you need to diversify your income today with one being job security.
They live within their means
Jay Z, a rapper said, “If you can’t buy it twice, you can’t afford it!” Be reminded, this is coming from the mouth of a wealthy individual.
Living within your means is a universal statement that goes for everyone whether you’re broke or rich.
So honey, if you don’t have the cash for that item, resist the urge and find a better deal or just most on.
If you’re having a problem with self-control when you go out then travel with cash or use the cash envelope system. Over time, that urge to spend money you don’t have will leave as you keep your eyes on the goal.
Track their progress
Yes, it’s good to apply all the best money-saving tips you read about to your life but in all that; how far have you reach.
Have you paid off those debts? You said at the beginning of the year that you’ll start an emergency fund, have you though.
Many things will come your way where you might have to put off those savings for a while or not being consistent in paying off your debt so it’s important to not only set goals but figure out where you are on that journey.
This habit will help you become debt-free since you’ll be able to make life changes.
Think through every purchase
I have been known as the person who thinks so hard that I make simple things complicated. So when I am shopping, I am always wondering is this item worth it, do I need it, or could find something better for the price.
This type of attitude has saved me a ton of money and help to prevent unnecessary spending.
Debt-free people tend to think through every investment or purchase, especially big ones. So let’s adapt to this style of living!
I remember when cryptocurrency became the buzz on the internet. Everybody talking about bitcoins! Some made a risky investment into it and lost it all while others become successful. Things like this have to be thought out.
Have financial knowledge
One of the reasons many people are broke is that they don’t know anything about money.
No one taught them! I was that person also. I had no idea about tax, investment or even savings. And if you don’t know how to manage your money then it may cause you serious problems in the long run.
Not everyone has money to hire a personal accountant and even so, you still need to know what going on with your finances.