7 Habits to Get You Out of Debt

I’ve mentioned before that we are debt free.

And we’ve decided that we will STAY debt free (not including a mortgage. Someday we will have a mortgage, and hopefully soon.)

But, our decision to stay debt-free means we have never been able to buy a new car (so I’ve always driven a total beater), take a vacation or make any other major OR minor purchase unless we happened to have the cash on hand.

The decisions we make that help us to stay debt-free sometimes feel like hard decisions.

Juuuuust in case you think I’m exaggerating about my car:

whitecar

– no, I didn’t give it that dent, it came pre-dented. (BTW, car currently for sale. $400 $250 takes it and it runs great!)

But all these hard decisions would have been wasted if we hadn’t developed the habits you need to GET and STAY debt-free.

(THIS POST PROBABLY CONTAINS AFFILIATE LINKS. OUR FULL DISCLOSURE POLICY IS REALLY BORING, BUT YOU CAN FIND IT HERE.)

In your pursuit of the debt-free life, there are some things that you will need to do often, and some things that you will just never do again.

Whether you are currently trying to get OUT of debt or trying to STAY out debt, these habits should be your way of life.

They have served us VERY well.

Here’s what I think are the 7 most important habits you can cultivate to get – or stay – debt-free.

Actively practice contentment. 

Some people will tell you that paying for everything in cash is the number one most important thing you can do to stay debt-free. I disagree. Paying in cash is certainly up there, but I don’t think that there is anything more powerful than practicing contentment when it comes to spending less money.

We live in this culture of “never enough” and we are constantly being bombarded by the message that we won’t ever be happy until we have more.

This is one of the most life-destroying lies I’ve ever heard. The truth is that we will never be happy until we can be happy with what we have. If you can’t be happy driving an 18-year-old rusty dented car, you will not be happy in your brand new $40,000 car.

I’m not saying that a new car can’t bring you any joy – I love the car I drive now, and it certainly does bring me joy. But we only bought it because it was necessary and we got an amazing deal on it.

Not because we believed that it would make us happier. I was content to drive the old car.

Be content in the home you’re in, with the holidays you can actually afford, with the clothes you have, and you will not feel the need to spend above your means. Redefine what enough money looks like to you.

When you are practicing contentment, the hard decisions don’t seem as hard.

Know how much money you have coming in and going out. 

It doesn’t matter what system you use to do this, but do it. (I have heard AMAZING things about the You Need A Budget (YNAB) app. I personally use Quickbooks but it’s MUCH more involved.)

If you don’t know where to start with budgeting, then learn. We seem to be living in a generation of people that were never educated about money. We (or many of us) don’t know how to budget, we don’t know how to save, we don’t know how to invest. And it’s biting us in the butt, big time.

Here’s an awesome course (that I have been working through myself), from Financial Coach Jessi Fearon (jessifearon.com – real life on a budget). If you are one of those people that has no idea how to budget, then just spend the 49$ on this course and LEARN. A $49 investment today could change your financial world. 

If you are not in control of your money, then your money will control you. 

It will be this way for your whole life. Nothing will change unless you change it. Do you know what people who make more money have, if they don’t learn to control their money?

They have more debt.

Seriously!

And there is no way around that but learning to budget, learning to understand your money, and taking control of your money. Check out Jessi’s course – The Real Life Money Plan – here, and consider how different your life will be once YOU are the boss of your money.

Always, under all circumstances, pause before a purchase.

Now, I don’t mean your groceries, but any time you’re buying something that’s not regularly on your list – a couch, a pair of jeans, a cute set of wine glasses… anything, pause as long as possible.

A pause can last hours… or days, or MONTHS!

So often, I’ve found that by walking away from the thing I want to “think about it”, I discover I don’t need it that badly anymore, and more often than not I never make the purchase. On the rare occasion I DO go back and buy, I KNOW it’s something I’ll love.

I don’t have a lot of buyers remorse.

Make savings a non-optional priority. 

Every single month, painfully large (well, not really, but to me they seem large) sums of money leave our bank account on their own and go directly into savings accounts and investment accounts.

I can’t tell you the number of times I’ve wished that we could just keep (and spend) that money this month, one time, so I could buy the *thing I don’t really need*. But savings is a non-optional priority. It comes before ANY OTHER “non-necessary” PURCHASE – once you have no debt that is.

(Although when you are still in debt, the bulk of your “extra” money should be going to pay down debt.)

We have two avenues of “savings”. Investments – where 60% of our savings goes (for retirement), and a savings account – where 40% goes (for emergencies). Just remember – without savings it only takes ONE emergency to make you NOT able to stay debt free.

Find opportunities to make extra money. 

If you are feeling like you need to buy extra stuff, then make extra money. Even if you’ve finally got that “content-with-what-you-have” thing down, then make extra money anyway, because situations where you need to spend extra money will arise.

But don’t just jump into anything that looks like an easy way to make money!

9 times out of 10 (actually, 9.9 times out of 10), if it looks like an easy way to make money it’s not worth your time.

Check out this list of side hustles to make you money now, or consider starting a blog – here’s an easy to follow how-to (- yes, I make very real money doing this, read September’s income report!). If blogging isn’t for you, here’s some REAL Work From Home Options for people serious about escaping 9-5 (all of these suggestions work as “extra” income earners!)

Related: 15 Work at Home Ideas for Moms (or anyone!)
Related: How to Be a Stay at Home Mom

Never stop looking for ways to spend less. 

Even though we aren’t in debt and we don’t NEED to pinch every penny, money-saving articles are still among my favorite reading. (And they’re some of my favorite to write, too. 10 things I quit buying to save money is the single most popular post I have ever written.)

There is never a good excuse for turning a blind eye to your spending, even if you aren’t in debt. Make a game out of it; learn to enjoy saving money more than you enjoy spending it!

Do not buy anything you do not have the money to buy. 

Ever.

I see articles like “how to pay for a vacation in cash” and I think – how else would you pay for a vacation? It doesn’t even cross my mind to pay for it with credit. I have never, ever, bought a cute purse or pair of shoes that I didn’t have the money for in my bank account.

I have never gone out for dinner without knowing that there is enough money to pay the bill in my bank account. (And to tip. If you can’t afford to tip, you can’t afford to eat out. Just sayin’.)

(EDIT:  Ok, I have to concede an exception here. Recently I saw a go fund me account set up for someone who needed a multi-thousands of dollars medical procedure or they were going to die. And honestly, if that was me I would get a loan. I would pay the loan off, the same way I pay into my savings account. When it’s literally life and death, I might buy something I don’t actually have the money for.)

Are you in debt or out of it? If you’ve managed to stay debt-free – what are the tops tips you would share with those who are just getting there?

6 habits to stay debt free




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22 thoughts on “7 Habits to Get You Out of Debt”

  1. Yes! To every one of these! It really is so important to know what is coming in and what is going out. Also, contentment needs to be our way of life! Thanks for sharing this!

    Reply
    • Hey Patty! I couldn’t agree more – with contentment as our way of life, we shouldn’t ever have debt!!

      Reply
  2. Great Post! Contentment is definitely something that I have been working on. Learning to live with the “less is more” approach is so powerful and I am hoping that one day I can become truly content with having less. It is a work in progress. Thanks for the great tips!

    Brooke | http://www.beautydecorandmore.com

    Reply
    • HI Brooke! And thank you for reading. Contentment is really the key to debt free living. (and I totally believe you can do it 🙂 – even grow to LOVE having less!)

      Reply
  3. I make saving money a game! That makes it fun and a challenge. It is also how I was able to buy my house.

    Reply
  4. Very important for a marriage to decide early for a debt free. Very helpful for hard decisions. Thank you for sharing Carly.

    Reply
  5. Love the car!! Our car is our last piece of debt after paying off $45k in student debt and credit cards in 2 years.

    Practicing contentment and tracking your money are my fave pieces of advice!

    Thanks!

    Kim
    https://www.kimgaleta.com

    Reply
    • OOO congrats Kim on being SO CLOSE! I bet you can just about not wait to be debt free… you’re gonna love it!

      Reply
  6. I am debt free except mortgage and have a fixed income. I’m retired and a widow at 65 . I’m content and enjoy my life . Being debt free is good for your health as well . ?

    Reply
    • You bet it is Vicki!! If more people could be debt free by 65 we’d have a LOT more happy people out here 🙂

      Reply
  7. Thank you so much for pointing out the contentment piece! I feel like so many times these kinds of articles cave to the pressure of oversimplifying the issues of money and lifestyle (“just don’t eat out!” “Just make your coffee at home!” “Just cut the cable”) As someone who has already tried or is already doing many of the “easy” things people say are so revolutionary when it comes to saving money and getting out of debt, it can be discouraging… this article, however, was refreshing and cut right to the heart of the issue. Contentment is so hard sometimes! But you’re right, if we don’t get that piece of the solution established early on, none of the strategies we employ will last! Thanks for an encouraging reminder!

    Reply
    • HI Natalie!! SO glad you enjoyed the post… you’re absolutely 100% on the mark there – without contentment with what we have, we will probably always struggle – EVEN IF WE MAKE MORE MONEY! Good luck on your journey out of debt 🙂

      Reply
  8. We are debt free also, and we drive an older car. That’s the way we like it, because when it comes down to it, you make choices. In our case if we chose a new car we would not be able to afford something else. We prefer to travel and visit friends and family and not make payments.

    I really enjoyed your article. thank you

    Reply
    • So glad you enjoyed it! (AND YES TO TRAVELLING INSTEAD OF MAKING PAYMENTS!)

      Reply
  9. Yay for contentment! Another thought is, when times are tough, to give yourself a treat. For me, it’s going to the library–come home with an armful of books, and pay nothing! Or borrow a video–free!

    Maybe you always eat dinner at the table with the family. I’m all for that. But it may be a treat for you and the kids to have a dinner-with-TV night once a week–maybe sloppy joes and an old movie.

    Long walks and long talks to go with them. Stargazing with a library book to tell you which stars are what. Free!

    We have used cash for daily expenditures for many years now. When I found myself feeling that a fifty-cent kitchen gadget was too much–that it was Taking Food From My Children–we started putting aside a little for an allowance for each of us–money that could be spent without pangs of conscience for any little thing, from candy to a charitable donation.

    And even when you have more money, DON’T buy everything you want. Treats aren’t treats anymore if they become routine. Enjoy that new package of underpants! When the fun wears off, plus a bit of time, you can buy socks.

    Reply
  10. Thanks so much for the inspo. I particularly love #1, it’s something I need to remember more. I’m 20 years old and I have a bit of debt from culinary school and also my car but I’m working really hard to have those both paid off and be debt-free by the time I’m 25. I saw both my car and my education as an investment more than luxury items 😅 my car gives me freedom to travel & visit family and my education pays off every single day. I see my credit cards as necessary to build credit for someone my age but I always pay them off every month!
    Thank you for the perspective and the inspiration to help me reach my goals 😊

    Reply

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