Debt-Free Habits

I recently read the article “10 habits of debt-free people” by A.J. Smith at In this article, Smith lists 10 great habits people should model if they want to live without debt.

  1. Debt-free people pay attention to details – We discussed this topic a few posts earlier when we mentioned watching your bills to make sure there aren’t any unnecessary charges. You should also look at your statements to look for areas where you may be overspending. My bank’s website has a tool that tracks our spending and shows a pie chart of the month’s expenses. It can be an eye opening experience to see how much we actually spend in each category.
  2. Debt-free people know their finances – Understand how your finances and taxes work. In order to handle your finances responsibly, you need to understand how it all works. I am often surprised at the number of people who really do not understand personal finance issues. Be educated when it comes to your finances.
  3. Debt-free people pretend they make less – I’m sure you have heard this before, but learn to live on less than you make. My husband and I do not let our annual raises increase our budgeted spending. When we get a raise, we find places to put the additional money whether it’s retirement savings, charitable giving, college savings, etc.
  4. Debt-free people think long term rather than short term – I recently taught on the subjects of instant and delayed gratification. Today’s society wants things now without having to wait. This type of action is called instant gratification. Saving up and waiting to purchase something and paying cash for it would be considered delayed gratification. Debt-free people have learned the benefits of delaying gratification and avoiding debt.
  5. Debt-free people aren’t afraid to ask – What does it hurt to ask? Frequently, I have asked for discounts either when I am checking out with my items or before I make my purchasing decision on items. More often than not, there is a coupon in a drawer or a code at the register that the clerk will enter for me. I look at it this way; the worse that can happen is they just say, ”No.” I often embarrassed my children when I asked for a discount, but I have noticed they are beginning to ask for discounts and coupons, as well.
  6. Debt-free people save money – They have learned the discipline it takes to save and become debt-free. People that spend without saving will have an extremely difficult time of getting out of debt and reaching their financial goals. Always pay yourself first if at all possible. Save, save, save!
  7. Debt-free people set financial goals – SMART financial goals are key to living debt-free. Set a goal and work consistently to reach the goal. Stay the course!
  8. Debt-free people say no – Learn when to say no to expenses you have not budgeted for in your monthly budget. If you have spent all your money in the food budget for the month and you don’t have money set aside in another category for dining out, you would need to train yourself to say no if someone invited you out to an expensive dinner somewhere. These little splurges can add up quickly and could wreck your budget for the month.

**But, I will caution you to make sure you have a category in your budget for fun. What I mean is you that you shouldn’t be so strict in your budget that you fail to enjoy life even though you are trying to live debt-free. I have met people from time to time who tried to live so frugally that they were living a miserable life entirely. Budget a category of money that can be used for those things you enjoy. My family has a dining out category and a vacation category. We won’t do either of these unless we have the money set aside.

  1. Debt-free people know the value of their money – Much of my family’s budget is paid for in cash. We know how much we will have to live on for the week so we have to budget it accordingly. It is more difficult for me to spend cash than it is to swipe my debit card. I am a visual person so actually having to give someone my cash can be difficult for me at times. I like to look in my wallet and see that I have money left at the end of the week. If you are someone who always uses a debit card for transactions, try using cash for a while. Sometimes I think part of the reason we have so much debt today is because we don’t feel the pain of spending cash.
  2. Debt-free people value having experiences over having “stuff “- They see more value in spending time with friends and family than spending more time at work to make more money to buy more things. My husband and I often take fun day trips that really don’t cost much money at all. Just the other weekend we visited our local Botanical Gardens and enjoyed our time together. Admission was free but the time spent together was priceless.

Many people may say they can’t live the debt-free life for one reason or another, but I have learned it just means they won’t. I say its too costly not to live debt-free.


5 thoughts on “Debt-Free Habits

  1. This economy is built on debt without credit the economy would fall apart. Don’t get me wrong debt excess credit is a bad thing inflation was once nonexistent today its considered normal. My Grandmother lived comfortable in a apartment in chicago’s Lincoln park neighborhood on 78 dollars a week in 1965 you could support a family on just 120 dollars a week in 1965. Inflation is the great unequalizer the biggest cause of income inequality.


  2. Great tips. I struggle with #8 the most as far as personal spending. Relating to #3, for me, automatically keeping my money out of reach a.k.a. transferring every two weeks to an online savings account on top of my retirement contributions, is the best way I’v found to “pretend I make less.”

    Liked by 1 person

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