Living debt-free is a lifestyle choice. We’re not talking about getting into debt and paying off all your credit card balances. Living debt-free is all about not getting into debt in the first place. There are folks out there who subscribe to this philosophy. They’re a different breed, one that you might think of as “weird,” but they generally have a lot of money in the bank.
What does a debt-free lifestyle look like? To answer that question, we’ll need to examine some of the characteristics of people who’ve chosen to live this way. They share a unique perspective on what’s important in life. You might not agree with some of this, but debt-free lifestyle choices are a proven recipe for achieving financial stability.
1. Society doesn’t dictate spending decisions
Coveting what your neighbors have is not a characteristic of someone who’s chosen to live a debt-free lifestyle. Financial decision-making is based on needs, not wants, and purchases are made using cash, not credit cards. This is contrary to how most of America thinks. We all want to “keep up with the Joneses.” That’s how we accumulate debt.
2. Self-control takes precedence over emotion
The concept of an “impulse buy” doesn’t exist in a world where people are trying to live debt-free. That money would be better off in a savings or investment account. This may seem a bit Spartan, but it pays off in the long run. How many of your “impulse buys” have sat on a shelf or been lost along the way? They’re simply not that important.
3. Brand names are irrelevant
Quality merchandise doesn’t need to be labeled by a brand-name manufacturer. There are plenty of generic brands that offer the same quality at a more affordable price. Debt-free life adopters don’t care what the label says. They spend the lowest amount possible, without sacrificing form and function. Try it some time. You might enjoy it.
4. “No” is a complete sentence
How many times have you decided not to buy something and then changed your mind? Saying “no” without any reservation is a discipline that takes years to develop. Learn to respect the word. Once it comes out of your mouth, the decision is final. Move on to the next topic. It sounds harsh, but it’s actually quite liberating.
5. Goals are part of everyday life
One of the reasons consumers spend randomly is that they don’t have specific spending and savings goals. These should be more than just numbers. Setting a goal to save a certain amount requires behavioral changes. Spending within certain parameters takes discipline. In this new way of life you’ve chosen, setting goals and following through on them is an everyday task.
6. Materialism is not on the menu
A used Chevy serves the same purpose as a brand-new Lexus. All it needs to do is start up in the morning and get you from Point A to Point B. Opting for the more expensive vehicle, and the car payment that goes with it provides you no practical benefit. The neighbors might judge your choice, but that doesn’t affect you unless you let it.
7. Generosity is a spiritual principle
Being more conservative with spending and focusing on savings and investments frees up funds that you can afford to be charitable with. Folks who live a debt-free lifestyle tend to be more generous. They understand the sacrifices it takes to stay on track, so they’re more willing to help others with their struggles. This is where the true reward lies.
Kevin is a former fintech coach and financial services professional. When not on the golf course, he can be found traveling with his wife or spending time with their nine wonderful grandchildren and two cats.