The 15 Strategies of Debt Free People

By Miguel Dos Anjos

                You cannot save, or invest heavily while stuck in debt. The reason for this is that sitting on large amounts of cash make no sense if credit cards, and loans end up snow balling with interests making your debt bigger, and bigger. Even investing, in an investment account, or a retirement account most often is not worth, because the return collected is still smaller than the interest collected from you by bank loans, or credit cards.

Here we’ll go over 15 characteristics that debt free people follow:

1. They become aware:
They calculate, and know where their debt is coming from, how much it is, and set up a game plan to tackle it.

2. They come out of the “Debt Culture”: 
Now a days people believe that debt is unavoidable to have a normal life, since education, car payments, and the cost of living are so high. But, in reality there are multiple options out there:

- People who are smart in High School, or play sports take advantage of scholarships. Families that make very little may qualify for financial aid. And there are many colleges out there, extremely expensive ones, but also, more affordable ones, and even community colleges. Education is education, and most of the time hiring companies focus on the person abilities, and knowledge instead of which school, or university provided the degree.

- Same thing for car payments. There are all types of cars, and car prices out there. You can skip a luxury car, or even the brand new popular car. Buying a car that is 1 to 4 years used that is still relatively new, and well maintained can save on trips to the mechanic, and be much cheaper than brand new.

- Housing is usually everyone’s biggest expense. Once again options are there; debt free people skip the oversized house, they consider sharing rooms in their house when they are single, and have extra rooms. When buying a house, often times they live in one floor, rent the extra floor, and take advantage of having help paying the mortgage.

3. They are confident:

They don’t follow peer pressure from their broke friends to keep up with the latest phones, and gadgets. Also they look into surrounding themselves with people with similar believes on their daily lives, and on online communities. They have mentors, and successful people as models to follow.

4. They set goals, and stick to them.

5. They are not materialistic.

6. They consider sacrifices:
They consider sacrifices on the short run, looking into achieving something bigger later. They cut off the cable, or get a cheaper cable package, or even use free apps (such as; Hulu, Netflix, YouTube, etc.), or cheaper applications. It has never been easier to watch all the shows we like affordably, skipping the expensive cable. They may also momentarily fully quit, or cut down weekly, or monthly dining outs, and movies night outs.   

7. They bring a list:
When shopping they bring a list, and stick to it. It’s so easy to over spend walking aimlessly at the grocery store, and get home, and remember to have forgot that one item we went there for.

8. They quit addictions, and avoid expensive hobbies.

9. They enjoy free entertainment such as: 
library books, and movies instead of movies, or Barnes and Nobles, jogging instead of expensive gym memberships, parks, barbecues, hiking, forest trips, and free concerts, and events.

10. They pay the most they can:
They pay the most they can to credit cards, and loans as soon as possible to save on interest, and only after done with debt, focus on saving, and investing.

11. They negotiate: 
They negotiate a lower interest rate, or transfer higher interest debt into a cheaper one.

12. Tax refund:
If needed they use the tax refund to go into paying debt.

13. They sell un-using items:
It’s so easy to buy things that we end up accumulating things we eventually realize we don’t need. After it is stocked in the basement we forget we have, and by the time we need it we go out and buy a new one. All un-using items can be sold now for cash, even the summer car. Garage sales, online selling, and buying apps are great.

14. They increase their income:
They increase their income with their investments, side hustles, part times, or asking at their job for a raise.

15. They stay healthy: 
Being healthy saves time, and money on hospital bills. And does not need to cost much more. There are not enough proof, if any that organic foods are better than regular veggies and fruits we buy.

Which of these tips and trick do you use? Do you have a method not mentioned here? Let us know in the comments below.

Our YouTube video on this topic: The 15 Strategies of Debt Free People