Diving straight into the topic, let’s begin with an example.
Family No. 1 – Pays off $50,000 in debt in 2 years on a $45,000 annual income. Family No. 2 – Earns $90,000 a year, but unable to put the slightest dent in the same debt amount.
One will be soon in the debt-free zone, whereas, the other stays put as they are repeating the same mistakes for years.
Do you know why?
While a myriad of reasons could be in action here, one of the most likely factors is that the family no. 2 has developed a lifestyle that requires excessive spending. Even though they make a huge income, but they perhaps spend beyond their budget, leaving them with far less money that turns into a lot of stress.
Now that’s a hard and a stressful way to live.
The people who overcome that stressful part of their lives, understand that they must handle their money in a specific way and introduce some drastic changes in the lifestyle. When they execute these adjustments, they begin to create particular characteristics that play an important role when it comes to becoming debt-free and maintaining it.
According to the experts, 80% of personal finance is behavioral and 20% is knowledge.
So, what kind of behavioral level debt-less people carry?
Traits of Debt-Free People
They Oppose Mainstream Culture
They acknowledge the fact that debt isn’t a tool. Society pushes the belief “you need a credit card for the survival”, “you can’t attend college without taking student loans”, and “you’ll always have a car payment.” But those who are experiencing debt-free living don’t abide by these norms. Credit cards aren’t meant to rule their daily lives. Car payments don’t bite a huge chunk of money from their budgets. For them, debt is like a week-old meatloaf that they find in their fridge and they get rid of it.
They Master Self-Control
Children do whatever they feel like, but adults create a plan and don’t deviate from it. Someone who wishes to conquer debt has this willpower to ignore the flat-screen TV aisle or a shoe section without an impulsive purchase. They aren’t easily influenced to buy something only because it’s on sale. They have this clear vision that buying something isn’t going to make them feel better or erase all their problems. They know the importance of paying cash for their purchases. They practice self-control and know how to wait, work, and save.
They Emit Confidence
People who believe in their financial plans don’t show concerns about what others think of them. They feel perfect driving an older car because it doesn’t extract a payment out of their pocket. They don’t need unnecessary and expensive vacations simply to post photos on social media. They actually consider looking at the price tags and not just the brands. Why? Because they have left the plan of following the Joneses.
And believe or not, such unwavering discipline helps save more money to punch the debts in the face. With every dollar that goes for paying the debt, their confidence matures by leaps and bounds.
They Focus on Goals
Walk in the park, right? Yes, but only for those who take debt-free living seriously. They like to keep their objectives in front of them. They set specific, achievable, measurable, relevant goals and put an expiration date on them. They recognize what they need to follow and leave no stone unturned to make it happen.
They Know Only One Direction – Ahead
Unlike others who get so tired of their debts that they run as fast as possible in the opposite direction, they move in one direction only, ahead, right towards their objective. This means they grab every possible opportunity to shorten their budget by using coupons, searching for sales at every turn, and also taking up an extra shift at work. They are all in.
They Dodge Materialism
Someone who believes in materialism emphasizes way too much on “collecting stuff.” They make themselves sink up to their necks to pay for their new car, vacation, or a big house. On the other hand, the person who is determined to kick debt out of his/her life knows money doesn’t buy happiness, thus, able to avoid the trap of living the life as a materialist. They feel satisfied with what they have and don’t seek to buy happiness.
They Believe in Sacrifices
Shopping, dining out, watching movies on weekends, and applying for the premium cable package—these are some of the things a person might have to bypass on its way to become debt-free. But remember, budget cuts are short-termed. Once the debt vanishes, there will be automatically more space in the budget for those movie and dinner dates.
Yes, You Can!
When you take a deeper look at your debt, you start to see the thing that holds you back. Once they are out in the open, it becomes easier to be tolerant, make sacrifices, and place trust in your ability to beat your debt into the ground.
Reaching and sustaining a debt free life is an art!
