The Characteristics of a Debt-Free Lifestyle


Do you dream of a debt-free life but do not know how to achieve it? Good news: Living a debt-free lifestyle is not as complicated as you might think. People who live debt-free share certain key characteristics. Here, we outline the most important characteristics of a debt-free lifestyle so you can adopt them in your life and be well on your way to living debt-free.

1. They Live within (or below) their means

Probably the most important thing that those who enjoy a debt-free lifestyle do is that they live within their means. Even better, they live well below their means and save whatever they do not spend. Living within their means allows debt-free people to fully support themselves, without having to rely on credit cards or loans to fund their lives.

How can you start to live within your means? First, you need to know how much you spend and how much you have. Figure this out by tracking your income and expenses over a monthly period and determining whether you are spending more than you are bringing in. If so, determine where you can make cuts to your expenses to bring your expenses below your income.

2. They use credit cards responsibly

Living a debt-free lifestyle does not mean you cannot use credit cards. In fact, people who live debt-free often use credit cards, but they always use them responsibly. Debt-free people understand that credit cards can be great tools for things like building up their credit scores or taking advantage of the travel rewards and benefits they offer. However, they never use their credit cards to pay for things they cannot afford and cannot immediately pay off. Debt-free living means paying off your credit card, in full, every month. If you can do this, a credit card is a great tool to have in your financial arsenal.

3. They make sacrifices

Debt-free people are comfortable saying no to their friends, to their families, and to themselves, when it comes to spending. This involves making sacrifices and not doing everything they always want to do, such as going out to eat at fancy restaurants or taking extravagant vacations. Debt-free people set boundaries with their friends and family and understand that there are a time and a place for splurges, but that they need to be mindful of how many times they can splurge.

At first, it can be difficult to adjust to saying no and cutting back on these expenses, but the savings do add up. Living a debt-free life does involve making some sacrifices, but it will be worth it in the long-run when you have the freedom to live your life and are not controlled by or held back by your debt.

4. They do not try to keep up with the joneses

It can be tempting to keep up with your neighbors, friends, and family. Whether it is a new gadget, expensive car, or upgrades to your home, it is not always easy to be satisfied with what you already have when others around you are constantly buying new things.

Most of those who live a debt-free lifestyle do not bother with keeping up with the Joneses. They learn to be happy with what they have and only replace their things when they really need to, not because something shiny and new has come along or someone they know has gotten the newer, better version. Living a debt-free lifestyle means spending wisely and being content with what you have.

5. They do not do what everyone else is doing

We are constantly bombarded with messages about what we should spend our money on. So much so that it becomes “normal” to spend large amounts of money on certain things just because everyone else does. Debt-free people, however, make their own choices and do not spend money on things just because we are told we “should.”

They consider whether they really “have” to take on debt to finance their educations, or if that is something they would be better off without. They consider whether they “need” a car, or if they can get by with taking public transportation. Living a debt-free lifestyle means thinking things through and deciding what is best for you, and, sometimes, that means doing things differently from what everyone else is doing or what society says you are “supposed” to do with your money.

6. They set financial goals

People who live debt-free, or who are on the journey to becoming debt-free, set financial goals, and stick to those goals. Whether it is setting the goal to save a certain amount in an emergency fund, to cut back on monthly expenses, or to pay off a credit card, people living a debt-free lifestyle are constantly setting and achieving financial goals.

7. They are disciplined

Lastly, getting out of debt and living a debt-free life requires discipline and consistency. Those who live a debt-free life do so because they consistently make the right choices. They practice living within their means, cutting back on expenses, and focusing on their finances above what everyone else is doing, and they practice this every single day.

Living a debt-free life is possible

It requires sacrifice and focus, but living a debt-free life is possible, so long as you commit to it, surround yourself with the right tools, and have the right mindset to achieve it. Even if you currently have a large amount of debt, a debt-free life is possible and these tips can help you on your way. First, start by following these tips to begin to get your finances in order. From there, a debt relief company can help you get out of debt with a debt consolidation program. This is a great way to put yourself on the path to becoming debt-free because it is never too early to start living a debt-free lifestyle.