What do you think about these debt-free lifestyle habits?

Even though two people could come from the same financial background and make the same amount of money, the difference in their economic visions could be like night and day, depending on how they view finances.

People with debt-free lifestyle habits might have had debt in the past or witnessed the havoc that taking a large amount of debt has had on other people’s lives, vowing to NEVER be in the same position.

But the good part is, when it comes to your funds, no matter where you begin, YOU get to decide where you go from there! Are you ready to become debt-free? Adopting some of these 12 habits might help you kick your finances into better shape!

Debt-Free Lifestyle Habit: Not Wasting Money

Debt-free people don’t waste money on unnecessary “stuff.” They’re constantly checking to ensure no hidden fees on their bills and no fraudulent charges on their bank accounts. And it’s improbable you’ll catch them spending $1,000 on sneakers.

Sure, they may splurge a bit once in a while. But it won’t be a big splurge and won’t derail their overall financial goals.

They avoid making rash purchases, like homes or cars they can’t afford, paying more than they have to on something, or spending too much on items that lose their value.

They have also learned to squeeze every penny out of every buck and found ways to save where most people don’t think there is room to do so.

Debt-Free Lifestyle Habit: Turning off auto pay

Experts recommend removing all auto-pay or auto-fill options on websites where you frequently shop. This forces you to consider how much money you’re spending before you hit that “buy now” button.

Debt-Free Lifestyle Habit: Don’t Neglect to Save

People in debt often operate with a mindset of scarcity: the sense of never having enough. And usually, this causes them to avoid saving and continuing to spend freely because they associate cash flow with a sense of fleetingness.

But if you distribute your money before it even comes in, you can avoid this mentality by knowing that everything is paid for.

You may have heard this saying from people who have successfully managed their finances: “Pay yourself first.” Debt-free people make it a priority above all else!

Debt-Free Lifestyle Habit: Don’t carry a balance

There’s a two-word reason for this: interest payments. When using credit cards, always make sure to pay your bill in full every month. You get all the convenience without paying interest to the bank.

If you’re NOT able to pay it all, a good rule of thumb is to never carry over 30% of your credit limit to the next month.

Debt-Free Lifestyle Habit: Don’t Ignore Accounts

Ignorance surely isn’t bliss when it comes to finances. Those who are debt-free understand this. Even though some might border on slightly obsessive, debt-free people know their funds and where it’s all going.

They connect a high value to a dollar because they know how hard they had to work to make it. Debt-free people are mindful of spending and monitor their accounts to understand how they stand.

Tracking your spending and every dollar that goes out is one of the best ways to keep control of your funds and reduce how much you waste every month.

Debt-Free Lifestyle Habit: Using cash

Another thing to think about if you find yourself holding a big credit card bill when the end of the month rolls around is to start paying with cash.

Not only does this make sure you’re living within your means, but the physical act of handing over money to someone else is a lot more complicated than swiping a card.

Debt-Free Lifestyle Habit: Don’t Become Addicted to Shopping

People who aren’t in debt know that focusing on constantly obtaining things can quickly put them in a financial rut. So they don’t become addicted to shopping, and they definitely don’t let possessions define who they are.

Rather, they value experiences and relationships over objects, and they learn to control unnecessary spending. Debt-free people don’t let their money rule them. They lead IT and tell it where they want it to go. They’re addicted to saving money versus spending it.

Debt-Free Lifestyle Habit: Find inexpensive alternatives

Having more free time usually involves spending more money, from brunch to happy hour. We’re not saying there’s something wrong with these activities.

But when you start doing them out of habit, you’ll realize that so much of your spending will be on things that you don’t really care that much about.

Try keeping a list of budget-friendly activities to swap out for your pricier pastimes, like inviting some friends over or going hiking.

Debt-Free Lifestyle Habit: Don’t Get Duped by “Smart” Marketers

Let’s be honest: When you want to become debt-free, you’ve got to defend your wallet fiercely. People who are free of debt can detect a shady sales gimmick from a mile away. You won’t see a debt-free person falling for a “90-day same-as-cash” guarantee.

They’re way too bright for that. And if they want whatever it is, they’ll save up the cash to buy it.

Though a “90-day same-as-cash” offer might seem like something intelligent people do to make their money work for them, many people don’t pay these loans off before the due date. Then they’re stuck paying back interest at 25% to 37%. No, thanks!

You MUST know the risks associated with this financial move, and if you want or need something, save up and pay cash instead.

Debt-Free Lifestyle Habit: Create an emergency fund

According to a study, 45% of Americans don’t have savings. To prevent going into debt, though, you should have enough to cover 3 to 6 months’ worth of living expenses in case something extreme happens.

Debt-Free Lifestyle Habit: Don’t Cave into Lack of Knowledge

Debt-free people make an effort to better their financial education. Being debt-free doesn’t happen by magic or luck. It’s the result of educating yourself constantly and applying what you’ve learned.

You’ve taken responsibility for your finances, and part of that concerns understanding how money works. If you’re genuinely committed to reaching financial freedom, you must invest your time in making that happen.

A perfect example would be the cost of an average home mortgage. Most folks aren’t aware that by the time they finish paying on a 30-year loan, they’ll be paying more than double the home’s initial value in interest.

Once you comprehend that, finding a way to pay off your mortgage faster is a big motivation. If you adapt to a debt-free lifestyle habit, you’ll understand the consequences of debt, and you’ll know why debt should be avoided whenever possible.

Debt-Free Lifestyle Habit: Track your progress

If you have a financial goal, like saving up an emergency fund by the end of this year, keep track of your progress to see how you’re doing. Seeing that number rise every time you look in your budget planner can motivate you to keep your spending habits on track.

Or, if you don’t see it grow as much as you would’ve liked, you can modify your spending habits to get yourself back on track. Also, tracking how much you’re saving and spending will help you decide if your saving habits are efficient.

We hope this post has been helpful. But The Money Place has lots more to offer you. For instance, check out: 12 Important Secrets Your Bank Would NEVER Tell You