It is definitely possible to live debt-free. But it will require making some sacrifices. That said, you may come to find that the things which you sacrifice are your own shackles. Much of what drags people into debt today is entirely unnecessary. 

We have three practices that people who are debt free usually engage in. These practices help them live amazing lives without the bonds of debt on their shoulders. By employing these strategies, you may also be able to experience the liberty of debt-free life. 

1: Debt Free People Live Beneath Their Means

It’s not always in your best interests to structure your life around keeping up with the latest trends. In fact, this can often lead you into bad financial situations. Be done with “keeping up with the Joneses”. Who are these Joneses, anyway? Have you seen them when they’re not at their social best? They’re crazy people. 

Look: you can’t remain perpetually trendy anyway. If that were possible, no celebrity would ever make a stylistic gaff. But they do all the time. It doesn’t matter how much money you make, the world is going to continue changing. Trends will keep coming and going like diverse seasons. Quit following them. 

Find that which you like and enjoy, don’t seek that which is popular. If your interests happen to coincide, there’s no issue—you’ll still like the trend when it is no longer trendy, and has become cheap. This is a good way to see where your heart really is. 

See, if you’re always following the trends, eventually you’ll be living beyond your means. You’ll be spending more than you actually have so you can appear as though you’re something you’re not. It’s like jumping in the air and flapping your arms—you’ll never take flight. Meanwhile, if you stay on the ground and build a plane, you can soar—but the plane takes time and work. 

Living beneath your means is only spending money when you must, and curtailing all unnecessary expenditure. It may not sound fun, but you’ll likely find that you are more creative when you’re living and thinking this way.

2: Debt Free People Make Sound Investments

If you want to see your money work for you, you’ve got to learn how investments function. Getting your head around this means learning the difference between good debt and bad debt – there are lots of good debts that could enhance your life as well as bad debts that could cause a lot of problems.

Bad debt is that which depreciates, good debt is that which appreciates. A payday loan depreciates substantially. If you spend $200 in interest for a $500 advance, it’s like you lost 40% of your income. Were you getting paid $10 an hour, after the payday loan, it’s like you’re getting paid $6 an hour. This is a hypothetical used for illustration. 

Meanwhile, if you save up your money and invest in a home, then regularly maintain that home as you pay off the mortgage more quickly than its terms require, eventually you’ll own the property. A mortgage is “good” debt. 

Rent, while technically not “debt”, is a bad investment because you’re just throwing money away every month. Even if you can’t finish a mortgage, you can sell the home halfway through and recoup a great deal of your investment. With an apartment, the most you’ll ever get back is your deposit. 

So make sound investments. Put your money in that which will bring you more money later on, rather than that which will simply implode over time. 

3: Debt Free People Push Themselves

It can be difficult to control your spending habits, but if you do take control of them, it will immediately put you in the top twenty percent of the population. If you meet ten randomly selected adult Americans in a room, odds are that only two of them will be debt free. The saddest part is that some of that debt is entirely discretionary—it didn’t have to happen.

Did you know that the average American’s credit card debt is $5,700? Did you know the average American household, all family members (those with and without debt) combined, is $139.5 thousand dollars in debt? Some of that debt is inherited—some are even good! But there will be thousands—likely tens of thousands—that is utterly unnecessary.

You’ve got to push yourself to deny creature comforts which put you into debt deeper. You’ve got to live a Spartan life for a while. Sometimes you’ve got to stay home and eat tuna fish out of a can. Look at it this way: have you ever had that marshmallow cereal Lucky Charms? Some kids pick out all the marshmallows first, then they frown as they eat the sugary grain bits floating in the milk.

Some kids eat all the grain bits first, and when they’re done they’ve got several thick spoonfuls brimming over with milk-melted marshmallow goodness. Pushing yourself to invest wisely and live beneath your means is saving the marshmallows till the end, and eating the tasteless kibble first. Getting into debt unnecessarily is eating all your marshmallows first. 

Be Debt Free

To be debt free requires for at least a time a life of simplicity. It also requires discipline. You’ve got to sacrifice things like fast food, designer coffees, expensive clothes, expensive cars, expensive apartments, expensive meals, expensive movie theaters—the list goes on. 

Instead, you’ll want to read books from the library or get them from a used bookstore. You’ll want to prepare your own meals, cut down on your driving, and buy clothes from a thrift store. Each time you do something like that, you’re making a tiny positive investment in your future. Over time, those add up. 

If you spend $5 for a jacket at Goodwill which lasts you ten years, and $300 on a jacket from a designer outlet that falls out of style in two, which was the better investment? Why, the used jacket at Goodwill. Think in terms like this, and you too will be debt free soon.

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