People who don’t owe a penny to anyone tend to stick to similar practices to remain debt free. These habits can be instrumental in managing finances responsibly. If you are looking to eliminate debt, consider adopting some of these same habits.
They control their spending.
People who stay debt free know where their money is going each month. Because they track income and expenses regularly and have a budget, they know when they can spend and when they can’t. They are able to resist impulse purchases because they focus on their long-term financial goals.
They save what they can consistently.
Whether they can save a lot or a little, individuals with no debt save what they can. Saving a little bit consistently can add up to a lot. Automating savings is helpful. Most bank websites and apps give you the ability to schedule regular transfers to a savings account.
They leave a little wiggle room.
People who remain free of debt develop a budget that can be flexible. Maybe they want to have a celebratory dinner out but don’t have money in their food budget for that. They can decide to take that money from somewhere else in their budget. Perhaps they don’t buy any clothing that month or maybe they move money from their entertainment budget. A ‘Miscellaneous’ category in your budget is a great way to have some flexibility.
When an emergency arises, they are prepared.
If their car breaks down or a medical expense shows up, debt free folks are ready for it. They have an emergency fund that is never touched except in an emergency when there is no room in their budget to cover an unexpected expense. A good way not to be tempted by money in the bank is to open a separate savings account exclusively for an emergency fund.
They budget and track finances regularly.
By keeping track of their expenses regularly (sometimes even daily), those who are debt free stay on top of where their money is, what they have available to spend, and what expenses are coming up. Being in the habit of tracking expenses and budgeting is a key feature in becoming debt free, and it will help people remain debt free in the long run.
Those who are free of debt consistently look for ways to manage their money, and they stay disciplined. Sticking to budgets, saving some money each month, and planning for emergencies are just a few of the habits that can help you join the ranks of the debt free!