12 Habits of Debt Free People

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Getting out of debt is not easy, but it is possible. Thousands of people do it every year. They do it because of some things they each do. These are the habits of people who are debt free.

habits of people who are debt free

There is no greater feeling in the world than not having debt hanging over your head.  Whether you’ve worked hard to pay off your debts, or never got yourself into a financial bind before, there are things you do to remain financially fit.

If you are struggling with paying off your debt, these folks may be able to help:  Call 866-948-5666.

While we share the secrets to help you get out of debt, staying there can be tough.  It is a change in lifestyle which requires you to give up some bad habits and pick up some new (and better) good ones!  Here are ten habits of debt-free people!


The 12 habits of debt free people -- strive to follow their lead

1. They are patient

People are debt free all of this in common. When you don’t have debt, you learn to be patient.  You know that all good things come in time.

For instance, if you know you need a new car that you need to start saving now and build up the cash.  It might take three years to get there, but you can do it.

Patience pays off as you can pay for your vehicle in cash rather than having to take out a loan and getting into debt once again.


2. Responsible for their actions

The debt free person is responsible with money.  Whether they are 20 or 60, they know the value of a dollar.  They understand and follow their budget and do not allow themselves to get into financial troubles.

When someone who is debt free makes a money mistake, they own it.


3. Material items do not matter

When it comes to “stuff” people who are out of debt know that this is not what matters.  Sure, you could have the newest TV, the fastest car and the biggest house — but at what cost?  They know the things that matter most in life and know that money can’t buy them.

In fact, for most debt free people, what matters more in life are experiences rather than things.  They know items will not be around forever, but that creating memories can last a lifetime.


4. They live below their means

People who do not have debt do not spend more than they make.  In fact, they often spend much less.  They are saving for the future and increase their emergency fund for that “just in case moment.”

When you are content, you do not need to spend more than you make.  You find contentment with what you have and don’t try to keep up with the Jones’s.


5. Think long-term

If you have debt, all you can see what is right in front of you.  That is your debt

People have no debt can see further ahead and plan accordingly. They plan for the big purchase. The emergency fund is ready for the unexpected.   They are prepared for anything that may come up in the future.


Set goals to be debt free

6. They set goals

Just like people in debt, they work hard for their money.  However, what they often do is set financial goals.  They might want to go on vacation or get that fancy new handbag.  They set a goal on how to pay for it and then work to achieve it.

It might mean fewer dinners out to save the money to pay for it – but they do it.  Once they’ve saved enough money, then – and only then – will they take the plunge and make the purchase


7. They use cash

This may not be the case for everyone, but most people who are debt free use cash.

Even if they use a credit card, they never charge MORE than they have available in the bank to pay off the statement every. single. month.  They have learned that if they do not have the money, they can not spend.  They don’t buy now and worry about how to pay it off later.


8. They can say no

When you have a limited budget, you know what you can spend money on and what you can not.  Sure, it might be fun to go out to dinner with your friends on Friday night, but if it is not in the budget, they know and will pass.


9. They always save

The one habit that most debt free people have in common is savings.  When they get paid, they first pay themselves. It might be a company funded 401(k) account or even regular savings.  Whatever way they do it, they always save.

The same holds true for any windfalls.  If they get a bonus or money from a family member, they will often set it aside and save it rather than run out and spend it right away.

They also watch to make sure that they are not ever paying more than they should for the items they need. It might mean using a coupon or merely waiting for the right deal to come along.


10. They ask questions

One thing we did when we needed a new television, was negotiated a discount by paying with cash.  We knew it did not hurt to ask and for us it worked!  We were able to save 5% off of our purchase – just by using cash.

Those who are not in debt are not afraid to ask for discounts.  They are not afraid to ask for a lower interest rate (if they truly need a loan for any reason).  They realize all that can happen is that they could be told no.  However, they also know that they might get what they’ve asked for!

The 12 habits of debt free people

11. They pay attention to their bills

When the bill arrives, they not only look it over to ensure it is accurate, they also make sure it is paid timely.  By doing this, they are never late paying bills, which results in late fees.

What they do when the bill comes is always look it over and then place it somewhere they know they will remember to pay it on time.  They may make a notation on a calendar or spreadsheet to remind them of the due date — so it is always paid on time.


12. They know that money does not buy happiness

Many times, people in debt are in that situation because they’ve spent money trying to fill an emotion or other need.  Instead of shopping out of necessity, they buy out of emotion.

Shopping to fulfill a need results in nothing more than debt.  Take the time to figure out why you shop.  What is it you are trying to replace?  Work to make a change in that part of your life, and you will find that your desire to shop for fulfillment can fade.


Whether you are in debt $5,000 or $50,000, I know you are doing what you can to get out from under your financial burden.  If you start to practice the habits of debt free people now, you can put those ideas to work for you — and get your debts paid down even more quickly!


Be debt free with these habits

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6 Reasons You Will Fail at Getting Out of Debt

The post 6 Reasons You Will Fail at Getting Out of Debt appeared first on Penny Pinchin' Mom.

Whenever you make decisions to improve your life, it can be scary. For instance, when you first start out with your debt plan, you are excited and ready to go.  Sadly, many will fail at getting out of debt.  And, it may happen to you too.

making a debt plan

You might look at your debt plan and think that this time will be different.  You will start out thinking that this time you WILL do it.  Then, something happens, and you find that you are once again right back at where you started.  Before you know it, you’ve failed so many times that you just don’t think it is worth it.

I’m here to say – it is.  Please.  Don’t give up.

If you are struggling  with paying off your debt, these folks may be able to help:
Call 866-948-5666.

Believe it or not, there may be actual reasons as to why you fail.  Of course, there are the issues such as unexpected financial setbacks. However, it is more often out of a failure to have the right debt free plan in place.

Here are six reasons why you will fail at getting out of debt — and what you can do to make sure that this time really IS different.


1. You are not mentally ready.

Before you can ever make any change to your life be it healthy eating, exercise or even getting out of debt, you need to make sure your mentally ready. You need to look at your debt plan with a positive mind.

Instead of looking at the amount you owe and feeling like you will never do it, look at it as I can do this.  It is important to me, so I am willing to put in the work to get the reward.  Consider yourself strong and tell yourself that it is worth it and you know you can and WILL be successful this time.


2. You have no plan at all.

It seems that this should go without say.  However, it is the #1 reason why you will fail when it comes to getting out of debt.

If you tried to go to a town you had never visited but did not have a plan including a map or directions, how would you get there?  You probably wouldn’t.  At least, not without getting lost and off track several times.  You may even end up back at home having to try it again.

The same is true with debt.  You need to create an action plan including your debts to pay, budget and then a plan of action to attack them.  Once you have a plan, post it where you can see it (every day), so you don’t forget what you need to do to reach your goal.

Read more: How to Get Out of Debt (Even on a Lower Income)


3. You don’t have a budget.

I know, I know.  You hear this one every time you turn around.  There is a reason for that.  Any successful debt plan absolutely must have a budget.  You just can’t do it without a budget.

The reason is you need to see where your money goes.  Then, and only then, can you see how much money is available for your debts so help you do what you can to pay them off as quickly as possible.

Read more: How to Create a Budget (Even if you don’t know where to start)


4. You are easily distracted.

If you turn on the TV, go online or even pick up a magazine you are constantly being shown ads.  Retailers are trying to sell you on their item and telling you why you can’t live without it.  Sadly, many allow these influencers to affect their spending, forcing them further in debt.

You must find contentment with what you have.  You might also want to be like your neighbors, but how do you know that they are not as deeply (if not further) into debt than you are.  Find a way to be happy with your life and don’t fall into the trap that “things” will make you happy and leave you feeling fulfilled.


5. Your plan is not realistic.

As much as we’d all love to pay off hundreds (if not thousands) towards our debts each month, that is just not possible.

You need to be completely honest with yourself when it comes to your plan.  You might think that you can eliminate clothes from your budget and just not buy anything new, but is that really going to work?  Can you truly not spend anything on clothing  — ever?


6. You don’t have an emergency fund.

Your emergency fund is mandatory when it comes to getting out of debt.  Why do you ask? Well, if you do not have an emergency fund, what happens when the air conditioner needs to be repaired?  Chance are you will go further into debt to get it fixed.

Make sure you have a minimum of $1,000 in the bank before you even think about trying to tackle your debt.  That way, when the unexpected happens (and trust me, it will), you can pay for it without having to rack up more debt and end up throwing your debt plan out of the window.

Read more:  How to Create an Emergency Fund


Once you change your attitude, outlook and spending habits, you will be on the path to financial freedom and quickly be on the road to getting out of debt.


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How to Escape Debt in 2016

How to Escape Debt in 2016

The new year is right around the corner and if you’re like most people, you’ve probably got a running list of resolutions to achieve and milestones to reach. If getting out of debt ranks near the top, now’s the time to starting thinking about how you’re going to hit your goal. Developing a clear-cut action plan can get you that much closer to debt-free status in 2016.

1. Add up Your Debt

You can’t start attacking your debt until you know exactly how much you owe. The first step to paying down your debt is sitting down with all of your statements and adding up every penny that’s still outstanding. Once you know how deep in debt you are, you can move on to the next step.

2. Review Your Budget

A budget is a plan that sets limits on how you spend your money. If you don’t have one, it’s a good idea to put a budget together as soon as possible. If you do have a budget, you can go over it line by line to find costs you can cut out. By eliminating fees and unnecessary expenses like cable subscriptions, you’ll be able to use the money you save to pay off your debt.

3. Set Your Goals

How to Escape Debt in 2016

At this point in the process, you should have two numbers: the total amount of money you owe and the amount you can put toward your debt payments each month. Using those two figures, you should be able determine how long it’s going to take you to pay off your mortgage, student loans, personal loans and credit card debt.

Let’s say you owe your credit card issuer $25,000. If you have $500 in your budget that you can use to pay off that debt each month, you’ll be able to knock $6,000 off your card balance in a year. Keep in mind, however, that you’ll still need to factor in interest to get an accurate idea of how the balance will shrink from one year to the next.

4. Lower Your Interest Rates

Interest is a major obstacle when you’re trying to get out of debt. If you want to speed up the payment process, you can look for ways to shave down your rates. If you have high-interest credit card debt, for instance, transferring the balances to a card with a 0% promotional period can save you some money and reduce the amount of time it’ll take to get rid of your debt.

Refinancing might be worth considering if you have student loans, car loans or a mortgage. Just remember that completing a balance transfer or refinancing your debt isn’t necessarily free. Credit card companies typically charge a 3% fee for balance transfers and if you’re taking out a refinance loan, you might be on the hook for origination fees and other closing costs.

5. Increase Your Income

How to Escape Debt in 2016

Keeping a tight rein on your budget can go a long way. But that’s not the only way to escape debt. Pumping up your paycheck in the new year can also help you pay off your loans and increase your disposable income.

Asking your boss for a raise will directly increase your earnings, but there’s no guarantee that your supervisor will agree to your request. If you’re paid by the hour, you can always take on more hours at your current job. And if all else fails, you can start a side gig to bring in more money.

Hold Yourself Accountable

Having a plan to get out of debt in the new year won’t get you very far if you’re not 100% committed. Checking your progress regularly is a must, as is reviewing your budget and goals to make sure you’re staying on track.

Photo credit: Â©iStock.com/BsWei, ©iStock.com/marekuliasz, ©iStock.com/DragonImages

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How To Pay Off Credit Card Debt Faster

The post How To Pay Off Credit Card Debt Faster appeared first on Penny Pinchin' Mom.

According to NerdWallet, the average credit card debt for the American Family is nearly $16,000.  That is a considerable amount, and the monthly financial burdens can quickly become overwhelming

You may feel as if there is no light at the end of the tunnel as you see no end in site.  How in the world did I let this happen and what can I do about it now?

You certainly do not want to be like me and go down the path of bankruptcy.  Don’t do that.

Instead, you simply need to know where to turn for in order to get the help you need to pay off your credit card debt as quickly as possible.


The truth is that you may not even realize how much debt you have or where to begin.  Let’s tackle your debt by helping you figure out the simplest way to get rid of your credit card debt as fast as possible.

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The first thing you have to do is take responsibility for it.  Whether your debt is a result of severe financial times or frivolous spending, it doesn’t matter.  But, before you even think about getting out from beneath your credit card debt, you need to be ready to make it happen.  That means you have to be willing to put in the hard work and make the lifestyle changes necessary to achieve your goals.

Once you do that, you are ready to take steps to pay it off.


1. Transfer your balances to zero or lower balance cards

When you have a lot of credit card debt, you will want to try to lower the amount of interest you pay. Since that compounds every month, it can mean your $50 payment will only reduce the debt by $10.

Take some time to do some research to find zero interest rate transfer cards or those with a low introductory rate.  If you can drop your interest payments, that will allow you to focus on paying off your credit card debts.

By consolidating your credit card debt onto one or two cards, you may find you save a significant amount of money in interest while working to pay off the balances.


2.  Use your house

When mortgage rates are low, it might make sense to refinance your home.  Doing so may allow you take out a loan large enough to cover the balance you owe on your home plus your total credit card debt, without increasing your monthly payment.

If you can borrow more money, you can use that additional amount to pay off your credit card debt.  Then, all of your debt will be in one monthly payment – your mortgage.

Or, if you would rather not refinance, consider taking out a home equity loan.  Use what you’ve paid towards your home to pay off your credit cards.  The interest rate is often lower what your credit card company charges.


3.  Use a personal loan to pay off credit card debt

If you do not own a home, talk to your bank about a personal loan (secured or unsecured). Just like a home equity loan, you can pay off your balances and have a single monthly payment, often at a lower rate than credit card companies charge.


4. Get rid of your cards

If you are committed to paying off your credit card balances cut them up.  That way, you will not be tempted to add more debt to your balance.  However, what you should not do is close the account.  Keep it open and continue to pay on it to help increase your credit score.

For some people, cutting them is just not an option.  If you find this is you, then you need to put your cards on ice.  Literally. Put the card in a baggie filled with water and drop it into your freezer.  Now,  you won’t be tempted to dig it out and use it as you would have to put in a LOT of effort to do so.

Do what you have to do to stop spending.  There is no way around this.  Until you are ready to change your attitude towards spending money, you will not be able to get out of debt.  This starts by cutting off the spending.  Period.

Read more:  How to Break the Cycle of Credit Card Debt

5. Know how much you owe

Sadly, most people have no idea how much credit card debt they have accrued.  You have to know how much you owe before you can implement a plan to pay it off.

Make a list of the current balances owed, minimum monthly payment and the interest rate. Then add up total the amount of debt you have AND the total minimum monthly payments.  This gives you a better picture of the amount of debt you currently have outstanding (and, it may not be pretty to look at).

The debt payoff bundle gives you every form you need to track, monitor and pay off your debt once and for all!!

6. Find money

Once you know how much debt you have to pay off, take a second look at your budget.  Find places where you can cut back to have more money to pay your debt.  That may mean scaling back or eliminating dinner out for a while, so you have another $100 to use towards your credit card balances.

Think about making some short-term sacrifices for long-term gain. You will not need to scale back forever.  Once you are out of debt you may even find you don’t miss those items you cut out of the budget!


7. Start paying them down — One at a time

There are two different rules of thinking when it comes to paying off credit card debts.  One says pay the higher interest rate, and the other says the highest balance.  You can read more about those below.

No matter which method you decide to use, start with ONE debt and work on it first.  Get it paid in full before you try to pay others.

You can use a debt payoff calculator to find out long it will take to pay off your credit cards and know how much you’ll save in interest along the way.


8. Consider debt consolidation

Sometimes, the best way out of debt is to consolidate them all into a single payment.  You may find that you ultimately pay less over the life of the loan vs. what you would pay in interest on each card alone.

While credit card transfers are an option (as mentioned above) you may also want to try debt management or a consolidation program.  These include counselors who may be able to negotiate (on your behalf) to reduce the rates or payment terms.

Rather than make the individual payments on each debt, you make a single payment each month to the agency. They then transfer the payment to the creditor on your behalf.

If you do not own a home or are unable to qualify for a credit card or personal loan then debt consolidation may be the answer.



If you do not opt for one of the options above and instead want to tackle your balances on your own, there are two methods you can use.

Highest Interest Rate First (Avalanche Method)

The avalanche method of debt repayment starts by first tackling the debt with the highest interest rate.  You will want to pay as much as you can towards this debt first, continuing with minimum payments on all other debts.

For example, if the minimum monthly balance is $25, try to double, if not triple, the payment. Combine this amount with any additional income freed up in your budget to pay towards your debt.  Your focus should be only on this single debt until it is paid off.  Continue making the minimum required payments on your other credit card balances.

Once your first card is paid off,  roll the monthly payment you were making on that card onto the next card.  So, if you were paying $150 on card one and $30 on card two each month, you will now pay $180 towards the balance of your credit card. Continue to do this until all of you are debt free.

Using this method results in paying less interest, therefore, less overall debt.  As you tackle the one that accrues interest at a higher rate first, you will eventually pay out less to the company.  The downside is that you may end up tackling an overall higher balance first, which can result in it taking longer to make progress, and you becoming discouraged.


Lowest Balance First (Snowball Method)

The snowball method does not take interest rate into account, but rather balances.  Review your list of debts and find the one that has the lowest balance.  This is the one you will focus on first.

You will follow the same rule as you would if you were paying down the higher interest rate card first.  Find any additional money you can in your budget and add that to the minimum monthly payment of the lowest balance card.  Continue paying on that card until it is paid in full.  Once that happens, roll that payment into the next balance.  Repeat this process until all debts are paid off.

The reason that this works is that it tends to be more encouraging.  You will see that you are actually making progress as you can achieve a balance paid in full more quickly, which gives you the motivation to proceed.  The downside of this method is that you may have to pay a bit more in overall debt due to additional interest on the cards.

The thing is that one of these is not “right or wrong.” I hate when I see so-called experts trying to degrade someone for trying one over the other.  We are all different and we know what will motivate us to help us stay on track.  Decide which of these two works best for you.


8.  Use Windfalls

While you are working yourself out from beneath your mountain of debt, there may be times when extra money finds its way to you.  You may get a raise or a bonus at work.  This may be the year you qualify for a tax refund.  When you get extra money of any amount, do not use it as you want.  Instead, apply it towards your debt.

If you want to tackle this as quickly as possible, you may need to sell things you do not need or even get a second job.  There are many ways you can make money at home, many of which will not interfere with your regular full-time job.



Once your credit card debt is paid in full, you never want to allow yourself to get into that situation again.  Here are things you need to do:

1. Figure out why you got there in the first place

Was the reason you had debt due to poor saving? Are you a spender? Did you just not have a budget and had to use it to cover living expenses?

Whatever the reason, you need to make sure you know what lead you down that path, to begin with, and make changes in your life so that it doesn’t happen again.


2. Have an emergency fund

Many times, people turn to credit cards when they have an unexpected expense. This is where your emergency fund will come into play. Instead of turning to a credit card to bail you out, you will use your emergency fund balance instead.

Read more:  How to Rapidly Build an Emergency Fund


3. Never charge more than you have in the bank

Far to often, people will charge in advance of a paycheck or other income source they plan on coming their way.  But, what happens if that fails to come through?  Can they pay off the balance?

If you can not pay off your balance with the money in your checking or savings account, then do not charge it.  Just because you are owed money does not mean it will come through.


4. Always pay balances in full every month

It can be tempting not to pay off your card and keep more of the money for yourself.  However, this will just put you back into the same situation you just got out from.  Make sure your entire balance is paid off every single month.  No exceptions.


5. Review the perks

Many people use credit cards because of the perks. These include cash back, free offers or even airline miles.  However, what do you have to spend to earn the reward? Is it worth racking up a hefty balance just to get something free?

Companies can change their programs at any time.  You could lose those you’ve earned or no longer be eligible to earn new ones.  The perks may sound great, but are they really worth it?


Trying to pay off credit card debt is not easy. However, can you continue to live with the financial strain they are causing you? Only you can decide that it is the right time to pay off credit card debt.

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