5 Habits Of Debt Free People

Is living a debt free lifestyle even possible?

When you’re saddled with debt that keeps climbing higher, ever living without it can seem like a total pipe dream…. unless your Lottery numbers come in.

But it is possible. Although household debt is climbing, there are people out there living and thriving debt free. Yep. Without ever buying a lotto ticket.

These people might seem like unicorns, but they’re really not. They got to where they are with simple habits that helped them crush debt and create financially free lifestyles.

The good news is you can get started with these habits today, no matter your debt situation.

If your money goal for 2019 includes getting your credit card balance to zero, get onboard with these habits of the debt free.

5 Debt Free Habits you can implement today

Habit #1 – They live within or well below their means

Possibly the most important trait of the debt free; they live within or well below their means.

Spending less than you earn is a cornerstone habit for all wealth building. Debt free people choose building financial security over excessive and non-essential consumer spending.

dining outThe difference between your income and fixed expenses (think mortgage, rent, electricity etc) is your variable and discretionary spending. Eating out, entertainment, retail therapy and the like.

These are the expenses debt-free people control tightly.

Even if their income means they could afford extra, non-essential expenses, they choose to save or invest the cash instead.

On the other hand, those with burgeoning debt balances let discretionary spending blow way out on credit cards that allow them to spend above their actual income.

It doesn’t mean debt free people don’t indulge every now and then; the difference is that they know when they can afford it and when they can’t!

Habit #2 – They are patient and future focused

Debt free people are super patient. They don’t give in to the need for instant gratification or buy things on a whim if they can’t afford it, they wait until they’ve saved the money.

Self-control means credit cards aren’t racked up with impulsive shopping purchases, and waiting also allows time to figure out if the purchase really is necessary.

Basically, they overcome momentary spending urges to focus on the bigger goal; building a financially secure future.

If you feel putting a stop to spontaneous spending is really tough, try this little trick; write a letter to yourself clearly outlining where you want to be 5 years from now financially. Fold it up and keep it in your wallet or bag. Anytime you’re tempted to buy something ‘just because’, read the letter first. It’s a powerful tool to help keep you on track.

Habit #3 – Their preferred payment method is cash

Living debt free doesn’t necessarily mean you don’t own a credit card but cash is usually the go-to payment method for debt free people.

Why? Handing over actual notes is a bit of a psychological trick, it makes a big purchase more emotional and tends to curb any impulse spending. Just try handing over $500 in $20 notes vs charging it to a card.

debt freePeople who pay with cash are also more likely to spend less and know where their money is going. Try tracking the small amounts of $5 here, $8 there you’ve charged to a card over the course of a month. If you’re not vigilant, those charges slip by and your monthly statement can come as a bit of a shock.

Cash helps you see the damage done as it happens.

In some cases, there’s the opportunity to get more bang for your buck too if a discounted rate for cash is offered or you’re willing to haggle a little.

Habit #4 – They’re not obsessed with ‘stuff’

Our obsession with accumulating stuff means being saddled with debt (to buy stuff we didn’t need) has become the norm.

Debt free people go against the grain to blaze their own wealth creating trail. They don’t feel the need to keep up with the Joneses or hit up IKEA every 6 months to replace perfectly good furniture because a new season design is trending.

Being free of money-related stress is more important than keeping up with what the next person on social media is doing, who, by the way, could really be in financial distress.

Debt free people know the difference between a want and a need and are usually pretty practical, looking for ways to repurpose and repair stuff they already have.

When it does come to buying something new, they often invest in high quality, well-made products that will last years and years rather than needing to be replaced the next season.

Habit #5 – They’re action takers who know where every dollar goes

‘Someday I’d like not to worry about money…..’ is a wishy-washy financial dream that won’t take you anywhere.

Debt free people are action takers. They don’t just have a clear goal, they figure out the exact steps it’s gonna take to get there and then they execute those steps.

action planWeek in and week out. This is where patience comes in because building a financially secure future doesn’t happen overnight, it takes consistent action and commitment. But you’ve heard me say that many times before, right?

Taking little steps every day that align with their idea of long-term financial success, debt free people keep careful track of their finances. They’re likely to be able to give you a rundown of their expenses, income and net worth without even opening a spreadsheet.

They’re THAT onto it. They stick with a spending plan, regularly check in on their progress and are always looking for opportunities to maximise their saving and investment opportunities.

Living debt free takes a certain kind of mindset, one that is continually prioritising long-term goals over short-term impulses. Being in debt doesn’t have to be a way of life; even if every other person you know is in debt, you can choose a different path.

It might not be an easy one but the ultimate payoff of financial freedom and a life free of money stress is worth it, don’t you think?