Being debt free is the best thing ever. No more minimum payments. No more wondering when we will have more month than money. No more working to pay other people. Our money is OURS! We get to decide where our funds go, and we don’t owe anyone anything!
While we were paying off over $80,000 of debt (you can read our debt free story here), we learned a lot by reading how other families did it. It completely changed our mindset about many things. If you are interested in taking a peek behind the scenes of other debt free families as well, here are six habits of debt-free people.
1 – Set goals.
Having dreams for your life is great. But debt-free people go one step further and write them down. When you put your dreams in writing, they become goals. And once you have goals, you can create an action plan for exactly how you will reach that goal.
Debt-free people set goals for their finances. Savings. Retirement. College. Whatever it looks like, they are intentional with their money and their future.
2 – Budget every month.
Debt-free people also budget. They stuck to a strict budget while they were paying off their debt. And they continue to stick to a budget to meet their current financial goals.
If you can’t control your spending, you will never get ahead in your finances. Having a plan for your cash flow is absolutely essential, and most debt-free people get that memo early on. You can read my post 8 Steps to a Budget You Can Actually Keep if you’re interested in tightening up your budget. And there are FREE budgeting sheets for all of my readers. Drop your email in the little box at the bottom of this post, and I’ll send you a link to them right away!
3 – Learn to say “no.” A lot.
Fancy dinners and exotic vacations are all fine and good. But paying for them for the next year? Not so much.
Debt-free people have learned to say “no” to decisions that will hinder them from their goals. They recognize that today’s “no” will provide for their future “yes”es. In our own debt-free journey, here are 12 things we stopped buying to save more money.
They live on less than they make. And they save up so they can pay cash for big purchases and trips. Impulsive purchases can completely derail plans, and “no” isn’t a word you will ever have buyer’s remorse over.
4 – Be content with what they have.
Curbing impulsivity goes hand in hand with this habit as well! Finding contentment with what they already have, debt-free people aren’t tempted to keep spending their money on the newest fashions or the latest technology.
They appreciate what they have and aren’t constantly thinking about all the new things that just hit the market. Looking farther ahead, to their future goals and dreams, keeps them grounded and content with the life (and things!) they already have.
I can honestly say, this is my favorite financial lesson we have been able to model for my kids. They rarely ask for the newest toys and gadgets because they don’t need them. They love what they already have and are truly content with their lives!
5 – Work as a team.
People who are debt-free work hand in hand with their spouse. If you are married, I would venture to say you won’t make much progress financially until you and your spouse decide to come together and work as a team. Yes, that means it might look different even if you think your plan is better. Yes, that means you will both have to compromise.
But the only way you will make significant progress if you are both on board.
Finances are more than money. They are an exercise in working as a team, honoring your spouse’s wishes, and communicating respectfully for the betterment of your family. Most debt-free people value their conversations about money because it draws them closer together.
6 – They don’t find fulfillment in money.
This is the best lesson of all! Money is not a life purpose. It is a means to an end. Money does not buy happiness. It is a tool to be used to better your life and your family.
Debt-free people have learned that their life is bigger than their checking account. Their happiness is more than what they have accrued in savings. Money does not fulfill them.
They donate. They work for charities. They give back to the world in some way, shape or form. What is something that fuels you? Is there a cause that you really believe in? Let THAT bring you fulfillment.
Spend time with close friends and family. Invest in people, more than just bank accounts. And you will be well on your way to true financial freedom.
Most of these lessons are related to each other. Setting goals and budgeting helps you be intentional with your finances. When you are more intentional with your finances you have much more conviction to say “no” to frivolous wants. And then it’s easier to be content with what you have and to recognize how blessed you are. Which makes it easy to give back and be active in your community! It’s all interconnected.
True financial freedom is more than paying off debt. It is being intentional with your finances for the sake of your family and the world around you. Money is a tool that can provide safety and comfort for your family, while also helping meet the needs in your community.
What about you? What is one lesson you have learned in managing your money wisely? How do you use your finances to better your community?
P.S. Interested in free printables to help you with budgeting and paying off debt? I have tons of freebies that will help you track your progress! Enter your email address below for immediate access! Happy budgeting, friends!