It’s not often we come across someone who is truly debt-free. When it comes to things like mortgages, medical bills, student loans, credit cards, and car loans, Americans usually have at least one if not all four of these credit lines open.
Living debt-free is something that we all dream about. And, if you are in debt, know that it is possible to overcome and pull yourself out of it. How? Here are some characteristics and traits of people who live debt-free.
Set Goals
Another fantastic habit of people who live debt-free is they set goals. It is imperative to plan what you want your financial future to look like. If you don’t know what your goals are, you’ll never get to them.
Of course, an important goal for a debt-free person is to bring all your debt to zero.
It is also important to set clear goals after your debt is paid off. This could be setting up an emergency fund, saving for retirement or a vacation, or saving for a new home.
Goals will help you stay motivated and focused as new issues and problems arise in your life. This habit of setting goals goes hand-in-hand with a budget because creating clear goals and plans will help you work your budget correctly.
Make a Solid Budget
This is one of the most defining characteristics of people who live debt-free. Budgets are an incredibly important habit for knowing what bills you have to pay and knowing where your money goes each month. People with no debt set strict budgets and they follow them exactly.
Making a budget doesn’t mean that they are forcing themselves not to spend any money, it just means that they like to be in complete control of their finances. A budget doesn’t just account for bills, it also considers other expenses like entertainment and new clothes.
Budgets also help you afford to buy what you want when you want. By allowing yourself this, you won’t feel like you need to get a credit card and splurge on wants because you only budgeted for your needs.
In most cases, a budget that works will account for every last cent of your income. Every dollar will have a purpose, making you feel more confident with your spending.
Non-Materialistic
In today’s society, it is so easy to get wrapped up in stuff and things because they are popular, and everyone has them. Another defining trait of debt-free people is the fact that they don’t care about new stuff, and they don’t care what people think about this mindset.
Paying for things like a large house or a fancy car can take up a massive portion of your budget each month, and people who live debt-free choose to pass up on those large monthly payments. They also understand the fact that with interest charges, you will end up paying more for the items than what they are worth.
Being materialistic means you are more interested in satisfying your wants at the moment than your monthly needs.
Non-materialistic people are the opposite, as they focus more on their needs than their wants. They know it is important to budget for things they want, but it is not their priority.
Not Afraid to Say “No”
It will be impossible to become debt-free if you are always saying “yes” to everybody and everything you come across. This could be a vacation, eating out at a restaurant, shopping, or spending irrational money without thinking it over first.
One of the most crucial things that people with this characteristic do before making any decisions is they ask themselves a serious question.
They sit back and think: if what they want NOW is more important than what they want MOST. This allows them to put the situation into perspective to make the best decision.
Thinking about this question gives you the ability to see that spontaneous spending is one of the biggest things holding you back from financial freedom. If you always say “yes” and buy anything you want whenever you want, you won’t be able to propel yourself forward financially.
Patient
People who are currently living debt-free knew when they started that it wasn’t going to happen overnight. Paying off all of your debt takes a lot of hard work and a lot of determination. You need to be extremely patient during the process of becoming debt-free.
Patient people also know how great they will feel when they reach the goals they have been working so hard for.
They understand that what they are working towards for their future is more important than what they want right now, and patience is a big part of what works for them.
Save Instead
It is ridiculously easy to get into the mindset of just buying something on your credit card. It is quite simple to pay on a purchase over several months, but this can create a dangerous pattern.
You have to pay interest on purchases you make on your credit card, so you will end up paying more money for your purchase than it is worth.
You are spending more money than you have AND you will pay more for it in the long run? There is an easier way to do things.
It can be hard to get yourself out of the cycle of constantly buying things on your credit cards, but with determination, you can do it. If you can’t afford to buy it with cash, then just don’t buy it. I know it’s easier said than done, but you can do it.
Focus on saving your money for things you want to buy instead of charging it to your credit card.
Before you know it, you will be able to buy that thing you want with cash and you won’t owe a single penny on it after you purchase it!
Make Sacrifices
Living sacrificially is an extremely common trait in completely debt-free people. They understand that reaching their financial goals will require sacrifices, and they are willing to make them.
They pass up on eating out, watch movies at home instead of going to the movie theater, and they stay in and skip the bar.
They also cut out unnecessary expenses that they are paying for but they don’t exactly need, such as cable. It saves you money to cut your cable and use streaming services instead.
Debt-free people also understand that these cuts are only temporary, and they will be able to afford them again one day.
Once you are out of debt, you will have room in your budget for all of the luxuries you had to cut out for the time being. You can continue to go out to eat with your friends and go see movies at the movie theater.
It will feel even better knowing that you can do so without putting yourself in financial distress.
Conclusion
If you want to become debt-free, consider following some of these habits and learning these traits. In the long run, you will be much happier, have more financial freedom, and be able to save properly for the things that you want.
Living debt-free might seem incredibly hard, maybe even impossible, but it doesn’t have to be. You will be surprised at how easy it is!