The 7 Habits of People Who Live Debt-Free Lives

What does it take to live debt-free lives? It’s not cutting up your credit cards or refusing to use credit at all. Credit can be a useful tool at times for building the life you want to live. But there are certain habits that people who never carry a credit card balance tend to practice.

To get debt-free lives here’re few essentials to flesh a glance over:

#1 They Pay Their Bills in Full

One of the best things you can do for your finances is to pay your credit card bill in full every month. The same goes for utilities and other expenses, but your credit card is usually the only one with the option to pay less and carry a balance.

You’ll save yourself hundreds (if not thousands over a lifetime) by treating your credit card like any other bill and always paying the full balance.

#2 They Make Long-Term Plans

People who live free from debt have long-term goals, and that gives them the motivation to save more. It’s much easier to delay immediate gratification because they have a greater goal in mind.

It’s not about refusing to ever treat yourself; it’s about balancing your present wants with your future wants. You’ll be more likely to save when you can clearly see what you want to do with that money.

#3 They Get Help When They Need It

The first habit of people who want debt-free lives is getting out of debt in the first place. The smartest way out of debt isn’t always to pay it all back yourself. High-interest rates are expensive and cut into your payments.

Don’t be afraid to get help with your debt so that you can save more money and pay it all back sooner. You don’t have to be stuck with debt for years to come.

#4 They Automate Their Savings

If you want to make sure you’re saving, put it on automatic. It’s easy to set up automated withdrawals from your bank account into a savings or investment account. Set it up with every paycheck, monthly, or on whatever basis works for you. When you automate everything, you won’t even be tempted to spend the money.

#5 They Have an Emergency Fund

Too often, people wind up in debt because they faced an unexpected expense and didn’t have the money for it. An emergency fund is what bridges the gap. These are some of the best reasons to use an emergency fund:

• Bridging a period of unemployment;
• Paying for car repairs or medical expenses that you didn’t expect;
• Emergency home repairs;
• Essential travel that you weren’t expecting;
• Other unanticipated situations.

It’s important to note that it shouldn’t be for recurring expenses. Those should be built into your budget.

#6 They Live on Less Than They Make

One of the toughest things you can do for your finances is to cut your expenses. It’s easy to get used to a certain lifestyle, whether it’s a bigger or more central apartment or dining out a certain amount.

It’s much easier to never get started in the first place. The next time you get a raise or a new job that earns more money, put all or most of the new money into your savings without changing your lifestyle. Otherwise, you get what’s known as lifestyle creep.

#7 They Say No

Sometimes, debt-free lives mean passing down opportunities, especially the most expensive ones. Whether it’s a dinner date at a restaurant outside of your price range or a destination wedding you don’t have the money for, sometimes you have to say no for your own benefit.

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