11 Most Effective Ways To Stay Debt Free

Staying debt free is one of the best ways to ensure you achieve financial freedom. If you’ve ever been in debt, then you know exactly how stressful it can be. Knowing what it is like not having any debt will make you want to always live a life without it.

Becoming debt free can seem almost impossible when you don’t know what habits to follow.

It can take picking up extra shifts or getting a second job to help pay off all debt.

You then end up feeling like all you ever do is work with no time to sit down and relax.

This then becomes a repeating cycle that will have you wondering if you will ever be debt free.

As someone who has stayed debt free for the last couple of years, I know of healthy money habits that can help.

Habits that can get you out of your current situation and into one that is less stressful financially.

If you’re wondering how to stay debt free, you will find different habits below to follow to achieve this.

As you start to practice these habits, you will see just how easy it is to avoid debt.

This post is all about debt free habits that can reduce financial stress and lead to financial freedom.

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Most Effective Ways To Stay Debt Free

Before getting to the good stuff, don’t forget to pin this post so you have an easier time coming back to it at a later time.

What Does Being Debt Free Mean?

Simply put, being debt free means not owing any money at all.

Unfortunately for many, it can seem rather difficult to get to a point where you don’t owe any money.

Drowning in debt is what leads many to deal with financial stress. It is for this reason that many decide to get out and stay out of debt.

Is Having Debt Bad?

Having a lot of debt can be a bad thing as it makes things difficult for you.

Here are some ways that you can be affected negatively:

Causes stress that can lead to medical problems.
More money will be owed due to high interest rates.
Can keep you from owning a home.
Keeps you from saving money like a pro so that you have a financial cushion.
Can hurt your marriage.

These are all reasons to stay as far away from debt as you possibly can.

Should You Live Life Free From Debt?

There are plenty of benefits of being debt free.

Here are just a couple:

Improved credit score
Increased financial security
Less financial stress
More control over your money
Earlier retirement
More financial freedom
Freedom to pursue personal goals

As you can see, these reasons can greatly impact your life in a positive way. So much that most people would answer this question with a simple, “Yes.”

Easily making living debt free one of the top good money habits to follow.

How Do You Stay Out Of Debt?

Listed down below are habits to follow in order to stay free from debt.

Some of these habits are especially helpful for those wondering how to get out of debt quickly.

1. Learn To Say No

Why is learning to say no important?

The answer is very simple, it allows you to focus on yourself and prioritize your reasons for saving money over everything.

This allows you to spend your valuable time and money in a way that helps stay away from debt.

Plenty of people have gotten into debt by saying “yes” every time they get an invite to go out.

Constantly saying yes leads you to lose out on money you could’ve instead put towards other important things. Things like your savings account, your monthly bills, or investing it in a way that makes you more money.

You might find it hard to say no because of what your friends will think of you.

However, true friends will understand your reasoning for saying no if you’re honest with them.

Simply let them know that at the current moment, you have financial goals you are currently working towards.

The more you practice, the easier it will be to say no without feeling guilty all while avoiding debt.

2. Use Credit Cards Wisely

Probably the easiest way to get into serious debt is by improperly using a credit card.

This is because it’s easy to swipe a credit card left and right to make purchases.

When doing this, you might forget that eventually you’ll need to pay that money back.

When paying off a credit card, most go the route of making minimum payments.

This is what gets you to take years before all debt is cleared out.

Taking too long causes you to accrue an excessive amount of interest. As interest adds up, you will be left having to pay even more money making things more difficult.

It is for this reason that it is very important to learn how to properly use a credit card wisely.

When used correctly, you’ll be able to make purchases to help build your credit while staying away from bad debt.

Building your credit at a young age is hands down one of the top financial tips for young adults worth following.

3. Don’t Wait To Pay Things Off

Nowadays, most companies offer the service buy now, pay later.

If you don’t know, it’s a service that allows you to make purchases while splitting your payments up into different installments.

You’ll essentially be able to make small payments over the next couple of months until you pay things off completely. The problem with this is people forget about these payments because they’re so low.

It is then easy to continue to make purchases causing the overall total to significantly increase.

When missing payments becomes a cycle, late fees can add up causing you to get into debt.

For this reason, be aware of when your payments are due and don’t wait to pay things off. You can also completely avoid multiple payments and pay for things up front instead.

4. Find Ways To Lower Your Bills

Lowering your bills is yet another way to live a debt free life.

Most people have reached a point where they have high monthly bills and just pay them off without much thought.

When paying high amounts, it can be stressful trying to figure out how to pay all your bills at once. This stress can result in having to make late payments or struggling to afford the bare necessities.

Analyzing how much you pay for each bill can help you see where your money is going.

Once you’re aware of this, you can find ways to lower your bills.

Whether it be a small or drastic change, every little bit that you do to reduce your bills counts.

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5. Use Cash

Credit cards were mentioned earlier and so now it’s time to talk about cash.

You may be wondering, is it better to use cash or credit card? That all really depends on how you are with self control.

If you find it difficult having self control when using a credit card, you might be better off using cash. It is often said that physically handing over cash makes you think twice before making a purchase.

This right here is why certain people are able to stay out of debt when using cash.

In addition, using cash allows you to know exactly how much money you are spending in the moment.

Once your money is gone, it is gone for good.

When using cash you may wonder, how much cash is too much to carry? Think about how much you normally spend on a weekly basis.

This will help give you an estimate on how much you should be carrying.

Once you know this estimate, divide it evenly to ensure you don’t use all your money at once.

6. Stick To A Budget

If you haven’t sat down to create a budget, make sure to do so as it will change your life.

It personally took me a couple of years before creating a budget. When I finally did, I was able to realize the true importance of budgeting.

What I found to be even more useful though is actually sticking to your budget.

By knowing how to make a monthly budget and sticking to it, you are able to ensure you have enough money each month for everything.

Money to pay off your bills, throw into a savings account or retirement plan, and still have some left over to spend on yourself.

The more you practice this habit, the less you will wonder how to become debt free.

Instead, you will wonder why you didn’t create a budget in the first place that you could stick to.

7. Track Spending

Part of having a budget is making sure to track spending to ensure you don’t go over your spending limit.

As you track your spending throughout the month, you’ll be able to know if you are staying within your budget.

Recommending tools to use to make tracking easier is part of giving debt free advice.

The best tool to use is a sheet where you can easily write down how much you spent, when, and on what.

You can then review this sheet at the end of the month and see where you could’ve spent less money.

By then changing your spending habits, you’ll be able to achieve debt freedom.

If you’re wanting to start tracking your spending, i’ve created a printable that helps you easily do so.

8. Make Saving Money A Priority

Those that are debt free living know how important it is to save money.

It is always best to save enough money to cover all living expenses for the next 6 months.

This is so that in case something drastic happens and you have no cashflow coming in, you can still survive.

Some people, like myself, take it a step further and continue saving way beyond the recommended 6 months.

The more money you save, the easier it will be to pay off any unexpected expenses before they put you in debt.

One great way to save money is by making more money. You can do so by starting a side hustle from home.

If you’re able to start a side hustle that makes you passive income, even better.

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9. Pay Your Bills On Time

This next habit is easy to follow and that is to pay all your bills on time every month.

The minute you slip up and don’t make a payment on time, you can expect to see late fees.

The cost of these differ, but can add up the more you miss your payment cut off times.

The best way to prevent late fees is to be conscious of when your bills are due. You can do so by physically writing the due dates down on a sheet.

As soon as you see a bill is due, pay it off in the full amount.

Even though companies give you a timeframe to make a payment, pay things off as soon as you can. The quicker you make your payments, the better off you will be having one less bill to worry about.

If you’re wanting to write down your monthly bill due dates, i’ve created a printable to get you started.

10. Find Budget Friendly Activities

Going out can get pretty expensive, especially if you’re doing so a couple of times per week.

This is where participating in budget friendly activities can make a huge difference.

These types of activities help by preventing you from overspending to the point that it puts you in debt.

There are tons of budget friendly activities you can even do at home.

You can put together a puzzle, paint, listen to a new podcast, or have a movie night.

You can even call a loved one you haven’t spoken to in a while to catch up on life.

All of these are great ways to pass the time while avoiding breaking the bank.

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11. Pay More Than The Minimum

When making a huge purchase that involves making payments over the next couple of months, you are technically in debt.

These include purchases like buying a new phone, a new car, and a new piece of furniture.

The only way to get rid of this debt, is to pay it all off. This is why it is recommended to always pay more than the minimum.

By doing so, you will be able to pay off what you owe quicker.

In turn, allowing you to avoid any interest fees from adding up.

Interest fees adding up makes it so you pay more money than you would’ve if you had just paid the full amount upfront.

Before making a huge purchase, see if you have the funds to completely cover the full amount.

If you do, you’ll greatly benefit from paying it off all at once. If you can’t, then make sure to pay more than the minimum when it comes to your monthly payments.

This post was all about the most effective ways to stay debt free.

In the end, you want to avoid any debt that doesn’t need to be there in the first place.

If you’ve been wondering how to get out of debt when you are broke, make sure to follow these habits.

Following these habits consistently cannot only help you get out of it, but can also help you stay out of it.

Trust me when I say that not having debt makes life a lot easier and less stressful.

If you found even the tiniest bit of information from this post helpful, just know that it was made simply for you.

11 Most Effective Ways To Stay Debt Free