Habits of Debt-Free People

Learn the habits of debt-free people so you can get out of debt and learn to stay out of debt.

Habits of debt-free people

“To succeed, you need to find something to hold on to, something to motivate you, something to inspire you.” Tony Dorsett

What is the most reliable way to pay off debt?

If you want to pay off the debt, the most reliable way to begin paying down debt is to live WAY below your means. You can use your extra money to put toward your debt.

Are you in debt? I know the feeling. Being in debt is not fun, but it is nearly impossible to be completely debt-free unless you are in the 20% of financially savvy Americans. (DaveRamsy.com).

In fact, my husband and I are in our forties and we are almost debt-free with just a few thousand left on our mortgage as I write this.

Paying off our mortgage has been a goal since we paid off both of our cars and student loans. Hence, this is the last of our debt as we have never carried credit card debt (except a few thousand -from college bills).

So why were we able to pay our debt off and our mortgage off quickly? We followed these habits and will continue to live by them for as long as we live. We plan to never be in debt again.


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If you want to join the debt-free club, here are six habits of debt-free people (you can -and should- copy):

Debt Free Habit #1: Pay off Credit Cards Monthly

Debt-free people do not keep credit card debt. Some don’t even use credit cards at all.

I prefer to use credit cards to my advantage because I like getting points and money off purchases.

Yet, I use only two credit cards. One offers 5% off of every purchase I make and I shop at this store often and buy my grocery here so it is a great way to save.

It also gives me free shipping when I pay with my card which really saved me during the pandemic.

I also have another card I use for other things and get points for my purchases. I often save these points and get money off my Amazon bill or I use the points for gift cards at Christmas time

Either way, it is a win-win for me.

The key to using a credit card is to use it with discipline. I set a monthly budget for myself and if I am at that budget, I will not buy anything else until my credit card bill rolls over.

To do this, you can check your bill dates online and keep track of how much you spend. I use the notes on my iPhone for this, but many would prefer to just look it up. I prefer to do what is easiest for me and you should too. You can use your phone, connect your credit cards to a budget app, or use a handy notebook to track your spending.

You can also sign up for a budget tracker app and have everything at your fingertips. One of the most highly recommend app is Personal Captial. It can help you keep track of your savings goals and show you how much you are spending.


Debt-free Habit #2: Create a Budget That Works for You

One habit of debt-free is to use a budget. A budget makes sense if you are looking to keep better track of your spending and get out of debt.

Start by tracking your spending habits. Keep track and see how much money is going out each month. Then subtract that from your take-home pay.

If you are spending more than you make, this obviously poses a problem Yet, it is not hard to fix.

Debt-free people love trimming their budget and often use frugal living to help cut costs, which is the next habit you will learn about.

 6 Habits of Debt-Free People You Can and Should Copy. Do you want to live a life without debt? Learn to get out of debt and stay out of debt with these debt-free habits.

Debt-free Habit #3: Trim Your Budget

Once you have set a budget, it is time to start trimming unneeded expenses from your spending.

Are there subscriptions you can get rid of? Do you have a gym membership you never use?

Find things you don’t use and get rid of them today. These things are eating up your budget and if you are not using them you will not miss them. You can always add them back once you figure out your budget, save more, and get out of debt.

Debt is not a life sentence and you don’t have to go without forever. Just for a little bit until your debt is wiped out.

Debt-free people also know time is money.

So if you don’t have time to negotiate bills and find cheaper deals, let the professionals do the work for you.

Have you heard of Trim? Trim is a company that helps you lower your bills.

They help you lower bills and find you better rates.

Try Trims Savings for free here and see how much they can save you.


Suggest Debt-Free Reading


Debt-free Habit #4: Have an Emergency Fund (and a Rainy Day fund)

Debt-free people have an emergency fund that covers six to nine months of expenses. In order to stay out of debt, an emergency fund is essential.

If you lost your job tomorrow, would you be able to pay the bills? It is not always easy to find another job and if you do not have an emergency fund,  you could wind up in a mound of debt, especially if you rely on credit cards.

Life has too many emergencies and surprises not to be covered.

Another account that is essential to remain debt-free is a rainy day fund. The difference between an emergency fund and a rainy day fund is “rainy day” expenses WILL come up, but emergencies may not. You will, at some point, need to repair your car, get a new roof, replace your broken refrigerator, or take your pet to the vet.

These can be covered by your rainy day fund. You can include annual bills such as car insurance if you pay it yearly to save. Your rainy day fund will also keep you from going into debt and although it may seem like a surprise that you need a new muffler, essentially you will always need to repair something so if you plan ahead you can live your life debt-free and stress-free.

If you need extra money to save for these funds check out these mone-making posts:

75 Side Hustles to Make More Money

25 Ways to Earn Money Fast

7 Best Money-Making Phone Apps

Ibotta Review

Rakuten (formerly Ebates) Review


✅ Need a safe place to start an emergency fund or savings account? Learn why we recommend CIT Bank with their above-average interest rates.

Debt-free Habit #5: Learn From the Best

One way to become an expert at something is to learn from people that have been there and know what they are doing. Like anything in life, you can learn the hard way and take up your valuable time and money, or you can learn from people that have paid off debt and manage their money well.

It is best to find books and blogs that will help you reach your money goals. We offer personal finance advice on I Heart Frugal and also recommend these 7 personal finance books from experts that have excellent recommendations.

If you want to be a pro, you must learn from the pros. Do your research and find methods that work for you. Money and budgeting are not a “one size fits all” approach and what works for me may not work for you, so find something you can stick with and make sure to pay bills on time, pay off debt, and start building savings.

Debt-free habit #6: Invest Early

As discussed in the previous section, once you start tracking your moeny, you can put some of your extra money into investments and a retirement account.

If you are mindful about your moeny now, you will reap the benefits later.

Start small.

Don’t worry if you are afraid to invest. You can do it the easy way.

One investing app I recommend for beginners is the Acorns app. Acorn is an app that invests your spare change, by rounding up your purchases.

If you are new to investing this is an easy way to get your feet wet and start watching your money grow. You will start to see how compound interest will earn you a lot of money over time.

Of course, if you are just investing your change, your money may not grow as quickly as you would like, so Acorns allows you to invest more into your account or multiply the change from purchases to further reach your investing goals.

Don’t overcomplicate it and don’t let fear stop you. You are an adult, and you can figure this investing thing out with Acorns.

Six Habits of Debt-Free People You Can and Should Copy Final Thoughts

If you are in debt, it is best to learn how to live debt-free and you can use these habits of debt-free people to help you get out of debt and live better. If you can start small, your brain will start developing better money habits, and eventually saving money will become automatic. You can get out of debt with the above tips and live a better life.

Are you debt-free? What are some habits you recommend? We would love to hear from you. Leave a comment below.

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