Paying back money with interest is a challenging task, but it is possible to be free of debt. Debt can be avoided or paid back with the right attitude, knowledge, discipline, and habits. Here are some lessons to learn from people who have achieved a debt-free life.
1. Understand How Credit Works
Debt only gets out of control when interest charges build up over time. Forbes interviewed a man who learned this lesson as he paid off $30,000 in debt. He now only uses a credit card to maintain a good credit rating. To avoid wasting his money on interest, he pays the full balance off each month.
2. Use Cash
Debt-free people don’t want to end up owing any creditors money with interest. They avoid this by using cash whenever they can.
3. Make Sacrifices
Nobody ever got out of debt by buying everything they wanted. Delaying gratification frees up money for paying debts. Going without sometimes is also a good way to stay out of debt in the first place.
4. Feel Empowered
People who are working to get out and stay out of debt have a can do attitude. They remember that a feeling of personal empowerment will come with the achievement of their goals.
5. Be Organized and Keep Records
People get out of debt by tracking their money and bills so they can see where they can cut costs. Spreadsheets, apps, and hiring professional experts are good ways to organize financial data.
6. Shop Around for Deals
Debt-free people know that there will always be a big sales promotion if they wait long enough. That is why they are always keeping their eye out for coupons and advertised discounts.
7. Understand Long Term Value
People also get and stay out of debt by spending more on some purchases. Products that are more expensive are often made to last. The cost of replacing cheap things adds up over time, so a well-built brand is worth the initial investment.
8. Think Twice Before Going Back into Debt
Debt-free people don’t let new credit offers lure them back into owing money to others. Instead, they think long and hard about whether they really need something. When they decide to take on new debt, they look for the lowest interest rate and pay the debt off as soon as possible.
9. A Debt-Free Life Is Boring
A Huffington Post blogger describes her debt-free lifestyle as unexciting. She doesn’t have to make any thrilling decisions about repayment strategies or ways to save money. She thinks that her boring method of simply spending less than she earns is a good way to live.