7 Habits of Debt-Free People You Should Copy (2024)

Have you ever wondered how debt-free people got that way? Or more importantly, how do they stay that way?

It’s not magic, and it’s not luck. Debt-free people develop and maintain a set of deliberate habits that put their financial health first. What’s more, they leverage tools and resources that make those habits easy.

These are the 7 habits of debt-free people and how to make them work for you.

1. Debt-Free People Monitor Their Money

Here’s the deal: debt-free people are engaged with their money. They know where it’s going and what it’s doing at all times. That means tracking their income, spending, and saving to make sure it aligns with their goals. It also means keeping an eye on their net worth. Net worth is the value of your assets minus your liabilities, and it is a powerful indicator of financial health.

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• Related: 7 Habits of Women Who Always Have Money

2. They Grow Their Money

Paying off debt is an accomplishment to be proud of, but the name of the game is to grow wealth. Paying off debt = growing wealth. People with savings stay debt-free because they never have to turn to credit when an unexpected expense comes up. They have at least three to six months of expenses in a savings account, ready to cushion any financial emergency. How do they do it? They spend less than they earn and save every month.

• Related: How to Invest With Little Money

3. They Don’t Waste Money

Debt-free people don’t waste money, full stop. That’s because they always know what’s going on in their financial picture and are in control of their spending. They know the value of money and aren’t willing to squander it. If they notice they’re spending money on something that doesn’t align with their values or priorities, they put on the brakes and make a change.

• Related: Ultimate Guide to Saving Money

4. They Are Not Cheap

Debt-free people don’t waste money, but they aren’t cheap, either. Being cheap happens when you’re not aware of your money. You don’t know what your money can afford, so all you buy is cheap stuff.

Be intentional with your money. Know exactly what you can and cannot afford. You won’t overspend which means you will become debt free. Debt-free people have learned not to afraid of buying high-quality items or experiences. If something they want is expensive, they create a savings plan to pay it. They buy everything they can afford. They enjoy their money.

• Related: How To Stop Living Paycheck To Paycheck: An Actionable Guide

5. They Are Patient

Debt-free people know that buying quality with cash takes time. They resist the desire for instant gratification. Watching a savings account earmarked for a special purchase or goal grow consistently can be more satisfying than settling for something inferior in the moment — not to mention it prevents you from taking on more debt. Be patient. Buy quality stuff, but don’t take on debt.

• Related: 9 Things to Stop Buying to Save Money Fast

6. They Set Financial Goals and Priorities

Debt-free people are clear about what’s important to them, and they use that clarity to set financial priorities and goals for their future. Whether it’s saving for a down payment, planning for retirement, or building an education fund for their kids, they always have a plan. No one reaches their financial goals (big or small) by winging it, and debt-free people don’t risk their futures to chance.

• Related: 7 Personal Finance Tips That Will Make You Rich

7. They Proactively Learn More About Money and How to Best Manage It

Financially woke people didn’t get that way by accident. Those who enjoy the debt-free life hone their money smarts by learning everything they can about how to manage their resources. That means reading personal finance books and blogs, listening to podcasts, and joining enlightened communities. In this digital age, almost everything you need to know is available for free online — there’s no excuse.

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