NewsTop Ten Things Debt Free People Do

Top Ten Things Debt Free People Do

With thanks to Renee Sylvestre Williams writing in

They are detail-oriented and very organized

Paying off debt means knowing what you owe, developing a budget and sticking to it. Debt-free people keep track of their bills, how much they earn, how much they save and how much they invest. They speak to experts and have a tracking system in place, whether it’s an Excel file or another program.

2. They’re stress-free

Debt creates stress. People worry about money, they dread next month’s bills, they can’t sleep at night which leads to poor work performance… the list goes on. Getting rid of debt gets rid of stress. 

3. They operate within a budget

Just because they have disposable income doesn’t mean they spend haphazardly. If they can afford it, they’ll spend. If not, they’ll wait or forgo spending.

4. They pay cash

If you don't have the money, don't use credit as that will increase your debt load.

5. They don’t have a lot of credit (and they understand credit)

Credit, when understood and used properly, is a good thing. Debt-free people aren’t afraid of credit. Instead they use it properly to build their personal credit and pay their cards off every month to avoid interest. 

6. They understand value

Do you really need ten tops from a fast-fashion store or one very good, high-quality top that will be worn for years? Debt-free people consider the value of items before purchasing versus mindlessly buying stuff.

7. They’re patient

Debt-free people make the hard decisions. If they can’t afford something, they either wait until they can or choose to do without.

8. They comparison shop

They wait for sales or buy second-hand. That’s not because they can’t afford it. They know that it’s silly to automatically pay full price for everything. Debt-free people have a habit of looking for realistic and pragmatic ways to save money.

9. They’re not materialistic

Debt-free people might like nice, shiny toys but they don’t define themselves by their possessions.

10. They think long and hard about taking on new debt 

I was debt-free for a long time and was hesitant to take on new debt via a mortgage. It took a lot of thought, some calculations, a lot of research and talking to real estate and financial experts before making the choice to take on new debt. Thanks to my previous experience being debt-free, I continue to practice my debt-free habits as well as focus on paying off my new debt as soon as possible.


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Anonymous from VIC commented:

my mum always said to live within your means /pay something off your loans every week remember also having lots of money is not true happiness ;its what you do for others that gives you a contented life and peace of mind be greatful Laurie Smith port melbourne. 

NORMAN from QLD commented:


Wendy from NSW commented:

I made sure in my thirties that I got a good salary. Did I want to use my hours being paid only ten dollars an hour or forty? I made sure I had plenty if solar panels placed on my home, so now my electricity bill is in credit, I paid off my home upon redundancy, had paid my new car fully while still working, reduced my credit card so I could still shop online easily, purchased a small business that keeps food on the table as there is little income now, Every dollar is spent wisely, but still a little frivolous on the granddaughter. Agree with purchasing quality products as that saves money. My saying is Buy Quality- Once. You can spend less on inferior products to have them break quicker. Never go for fad fashions. Turn off the tv and watch old itunes movies, no funeral insurance advertising to watch constantly reminding us of our demise. I had fun renovating and designing rooms, but haven't done much to the kitchen which many people spend so much money on. It's not the kitchen, it's what comes out of it that counts. I have killed off my health insurance and chosen ambulance only through HCF. I do not keep spreadsheets on all expenses but have a pretty good idea as I do a lot of online banking etc. We paid our rates three years ahead, now the only bill we contend with is the water bill, atrocious that they charge so much to read meters and we should be able to collect water free from the sky, but house yards are getting so small these days, no room for tanks above ground here. If I could afford to go off the grid I would. Trying to grow a small vegetable garden. I used whatever I could to make us comfortable in our old age. I do not want to sell my home as it is my little slice of heaven for me. One day I will get into the study to celebrate all the little things I have purchased over the years and haven't had time to sort or play with. I enjoy playing a few online games, but do not want to pay to play. Good luck and goid fun wished to you all. Wendy. 

Alf from VIC replied to Wendy:

Thanks for sharing your successful ideas Wendy. I work in much the same way =] The new idea that you just gave me was to pay some fixed bills way ahead of time – like the rates bill you mentioned. I will do that now. Thank you, Alf 

Sunny from QLD replied to Alf:

Alf - I simply cannot understand people waiting for a bill, and then complaining about it. ALL my bills are paid well in advance - phone, car rego, power, rates. I pay regularly, and therefore never get a shock when I do get a bill, panicking about how I will pay for it. I worked 3 jobs to pay off my house within 15 years, and woe betide the Govt if they try to target pensioner home owners. I'm single, approaching retirement, but still working, soon to go to part-time. I NEVER automatically pay insurances - always shop around and have no qualms about approaching current insurers for a better rate. I have a small solar system, and my power bill is around $10 a week which is comfortable. What concerns me more than cost of living is the constant changes the government makes to pensioners conditions, rules, etc. They seem to target those least able to fight back. 

Clare from NSW commented:

I always remind myself the difference between ( want) ,and ( need ). perhaps it's not the right time and be patient. 

Dagmar from NSW commented:

I was brought up in a frugal household. No that there was much money around those days and some days there was a little less to eat than others. But still life was good. When my first marriage broke up and I was left to bring up a small child, I used the same criteria, if you don't need it, don't buy it, if you can't afford it, don't buy it. I had no debt. I still have no debt and I am in my sixties. 

Gertraud from ACT commented:

I have debt - nearly 1/2 million, and I sleep well at night. Except of course, that my debt is not consumer debt but rather mortgages on several rental properties. I don't touch the rental income, it all goes straight to an offset account from which I pay the property expenses, any excess reduces the loan amount. I'm a self funded retiree with a super income of roughly the same amount as the age pension, which I am not entitled to because I flunk the assets test (the only test I don't mind failing). I have a budget for my regular expenses and each fortnight I put around $500 into another offset account. What is left covers my monthly credit card spending, food and personal expenditure. I have a third offset account for "savings" into which I place any windfalls as well as tax refunds from dividend franking credits. 

Yvette from NSW commented:

Enjoyed this topic, we have to keep on our toes shop around for the best deal and ask yourself the question do I WANT it or do I NEED it. Anonymous NSW 

Sue from NSW commented:

Very sensible ideas. I am money savvy, have a good workable budget, & don't have a credit card. I save, spend, & give. I was also brought up with a very sensible attitude to money, from parents who had very little. I don't stress about my finances, as I am in control. I am a widow on a pension. I also enjoy holiday ownership, so have that to look forward to as well. Making a budget & sticking to it can be daunting, but is the best way to go. 

Anonymous from VIC commented:

A mortgage is good debt! Forcing you you pay it off every fortnight is a great way to become disciplined. Just as good as savings in the bank! 

Alf from VIC commented:

I agree. Saving money in a bank pays little interest and even that gets taxed. I mean we already get taxed on income and pay tax on everything we buy. Wether it's tax or loan interest it's still getting extracted from our back pocket, so may as well us the banks money and reduce the loan interest with what would be put to savings.. 

Margaret from QLD commented:

Very sensible reasoning the top 10 ways towards debt free. Easy enough to do and by doing direct debits re bills etc enables a person to Budget on a monthly basis. Enjoyed the article. 

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