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When my husband and I first decided that we wanted to become debt-free, we were scared, frustrated, overwhelmed, and completely confused about how to get there. And once we became debt-free, how did we make sure that we wouldn’t go into debt again?

I knew that our entire lifestyle had to change. The way we interacted with money had to take a complete shift.

But we were up for it!

That’s when my husband and I started to study the habits of debt free people. What were they doing that we weren’t? What did they do?  How can I become friends with them?  

I read books, blog posts, and listened to podcasts. I asked friends somewhat uncomfortable questions to determine if they held all the answers. Over time, I realized that people who have become debt free share the following 15 common habits.

15 Habits of Debt-Free People

1. They Stick To A Budget

It’s no secret that if you want to become debt free, the best way is to write a budget. This allows you to find any extra money you have and make extra debt payments.

But let’s be honest. Writing a budget isn’t the hard part.

Sticking to a budget is where things become difficult.

I know firsthand that living on a budget isn’t always easy. But I can promise you that it’s possible!

How To Stick To Your Budget Image

Here are a few tips to help make sticking to a budget easier:

Give yourself spending money.

When you allocate spending money for each person in the family, you’re more likely to stick to your budget. You can spend money on what you want when you’re on a budget, you just have to plan for it.

Try the cash envelope system.

Using cash envelopes is perfect for those that struggle with impulse spending and going over budget. When you use cash for groceries, you literally cannot go over budget.

Our family has used cash envelopes for 10+ years and it has been a game-changer when it comes to sticking to our budget!

Check your calendar first.

Before you make your budget each month, look over your personal and work calendar. Are there any birthdays, holidays, or anniversaries that you need to include in your budget? What about work trips that require you to spend extra money on gas?

Be sure to include everything in your budget. When you check your calendar first, your budget is more realistic!

Create a buffer category.

The buffer category is literally a game-changer for your budget. It is a small buffer (usually around $100 or less) that helps you stay on track with your money without dipping into the emergency fund for everything. 

You can use your buffer category for an unplanned expense that month (like a last minute birthday party gift) to avoid going over budget or putting the purchase on your credit card. 

This category can literally save your budget.

2. They Don’t Eat Out Every day

Going to restaurants every day (or even 5 days a week) can get expensive! When you go to a restaurant you are paying for convenience. Yes, it is convenient to be served food that someone else has prepared, but it also costs serious money when you add it all up.  

If you want to save hundreds of dollars each month, make a meal plan, buy only the food you need (no impulse grocery purchases), and cook at home. Limit how many times a week you go to a restaurant, or consider not going at all!

3. They Save Their Money

There will come a time in your life when you’ll want to retire. If you’re not currently saving for retirement, then now is the time! Yes, you can pay off debt and save for retirement at the same time!

And within a single year, chances are you’ll have to buy Christmas gifts, spend money on birthday expenses, and possibly even vacations. To keep you from going further into debt, start saving for these expenses every single month by setting up sinking funds.

Sinking funds make saving money automatic and easy! Want more information on saving money while paying off debt at the same time? Check out this article!

4. They Set Goals

Writing and setting goals is key to your success! Setting goals allows you to take a moment to think about what you want to achieve and the steps you’ll need to take to get there.

Our family paid off our student loans 10 years sooner than scheduled. We were able to do this in part because we set monthly goals for our debt payoff. Each month we evaluated how much extra money we wanted to send to our loans. Then, we determined what steps we needed to take to meet that goal.

Money Goals Printable

Ready to set goals but aren’t sure where to start? Check out this article on setting financial and money goals. Then, grab my free printable where you can track 3 money goals every day for a month!

5. They Track Their Progress

What good does a goal do if you write it out, declare it, but never track your progress? 

If your goal is to become debt free and you have a large amount of debt like our family did, then it might take you several years to get rid of it.  

As two teachers with a growing family, it was not feasible for us to get out of debt in just 2 years. We had to track our progress on our goal often because things came up.  

We paid for 2 births, 2 surgeries, 1 new car transmission, and many other small emergencies while paying off debt.

When you track your progress, you become even more motivated to finish the job. Want a few free trackers to help you stay motivated? 

Sign up for my Budgeting Basics Email Course and you’ll get access to free printables that will be sent directly to your inbox. 

You’ll also get access to 6 days of information on how to budget, stay on track with money, and pay off debt!

6. They Know How To Say “No”

When we were working on becoming debt free, I cannot tell you how many times we said “no” to dinners out with friends, pedicures, new clothes, vacations in the summer, and extra fun activities. This is one of the most important habits of debt free people!

Instead, we cooked dinner with friends at home, I painted my own nails, we made our clothes last longer and found free activities in our town at summertime. Here’s the truth: you won’t have to sit out of fun opportunities forever.  

In fact, you can still have fun by prioritizing what you want to do and saying no to the rest.  People who are debt free know that they can’t do it all, so they choose what is most important.

7. They Do Their Research

Debt free people tend to take time to research and create a plan for anything important in their life.  They make sure that they are saving enough money to be set up for retirement.  

If there is an upcoming vacation, debt free people take the time to research good deals on hotels or condos.  

When it is back to school time, they shop around so that they are not paying the highest price for supplies or clothes. Take a little bit of extra time to make sure that you are not spending too much on what you are buying. Do your research so that you spend less and not more.

8. They Are Patient

In a world saturated with social media, it is impossible to not see or know what everyone around you is doing. You know where people are eating, vacationing, and spending their weekends. 

Once you see all this, the comparison game starts to creep in. It makes you want to do all these things and more!

People that are debt free exhibit patience and realize that paying off debt is just a season. Seasons pass and once it’s over, then it’s your time to do all these things. 

Our family only took one vacation while we were in the trenches of paying off our debt. And that vacation was a gift from family members that we tagged along with. 

We stayed patient and celebrated our debt freedom with a beach vacation once our season of paying off debt had passed.

9. They Teach Their Kids About Money

One of my hopes in life is that I will be able to teach my two boys the importance of being debt free and how valuable it can be.  I know that one of many things they need to know is how to be responsible with money

Children need to know that money is not handed to them, but it is earned for hard work and effort.

Currently, our children have chores around the house. They have daily tasks that they need to complete such as making their bed, cleaning up their rooms, and helping out with the dishes at night. 

They also have weekly chores that include cleaning their bathroom and vacuuming their rooms. Each week our children earn money when they complete these chores. They are able to use this money to give to our church and also save for toys or games they want to buy. 

My oldest even looks at the value of different toys on Amazon! He likes to see which ones are less expensive so he can stretch his dollar further.

If children have a strong foundation in money before they turn 18, they are less likely to sign up for a credit card and max it out right away!

10. They Communicate

Couples that are debt free communicate well and they communicate often.  There are no secrets when it comes to how money is being spent.

Debt free couples are completely honest with each other when it comes to spending money. They set, and reach goals together

They are the accountability partner when someone else wants to go out and spend all the money.  

When you’ve been working toward paying off debt and all you want is to splurge on an entirely new wardrobe, your partner pulls you back down to earth and motivates you to keep going.  If you need any tips on how to get a partner on board with budgeting and tracking finances, check out this great article.

Budget Meetings Do and Don't

11. They Evaluate

If something isn’t working, they don’t keep doing it. They are always evaluating and measuring their progress. 

I am obsessed with Albert Einstein’s definition of insanity: “Insanity is doing the same thing over and over again expecting different results.”

This is so true, but we keep doing the same thing over and over and get mad when our results aren’t different. We set out to reach a goal and we never evaluate. When you evaluate on a regular basis, it increases your likelihood of success. 

You can fix what’s not working and start doing something that actually works and crush your goals.

12. They Are Not Afraid To Be Uncomfortable

In this day and age, we’re spoiled and used to being comfortable. We tend to steer clear of things that are hard or take too much time. We want the easy & fast route. 

People who have paid off a ton of debt have gotten used to being uncomfortable. 

When your co-workers are going out to a new restaurant down the street and you’re stuck at work eating your lunch you brought from home, that’s uncomfortable. 

You have to learn to sit in the discomfort of not freely spending your money without checking your budget. You have to learn how to change your spending habits. 

If you want different results, you have to be willing to get uncomfortable along the way.

13. They Change Their Money Mindset

When you’re getting out of debt, it requires a lot of change, including changing how you view money

You have to learn how to change the stories you are telling yourself about money if you want your situation with money to change. 

Example of how to change thoughts with money: 

  • Current thought: I always blow my budget. 
  • New thought: I’m learning to stay on budget. 

Just gradually changing your thoughts will help you have new and different results with money. 

If you’re interested in taking your mindset about money to the next level, take out a piece of paper and start writing out your thoughts and beliefs about money. Then look at them and see which ones are holding you back. 

Then you can create a slightly more positive thought to think in its place (like in the example). Over time you can change how you view money and start to think more positive and abundant thoughts about money.

14. They Have Multiple Income Streams

Debt-Free people who are building wealth have multiple income streams. This doesn’t mean that you go out and get 4 jobs. It simply means that you’re making money in multiple different ways. 

Ways to Make More Money: 

Start a Side Hustle

A side hustle can be just a side gig or you can actually turn it into a side business. There are a ton of side hustles for busy working moms like yourself. 

Here are a few ideas: 

Invest Your Money 

Contrary to what other popular financial experts tell you, you can invest while you’re paying off debt. 

Investing your money can be done in different ways. You can invest money into your employer provided 401k, your Roth IRA, or even index funds. 

If you’re interested in earning more money through investing, check out my good friend Jeremy’s beginner investing course. For more information on his course How to Build Wealth by Investing in Index Funds, click HERE.

Work Overtime

Working overtime at your current job can be a way to make more money for the short term. Most jobs don’t generally offer overtime for a long period of time. 

Ask for a Raise

You can always ask for a raise at work. Asking for a raise doesn’t have to be challenging. I really love my friend Chris’ podcast episode about this topic. It’s a short episode under 10 minutes and it can change your life if you implement what he’s discussing. 

Popcorn Finance Podcast – How to Ask for a Raise

Sell Stuff You No Longer Use

Going through your things and selling things you no longer use can bring you some quick cash. 

Instead of donating the items or throwing them out, you can turn them into cash by selling them on online resell sites like Poshmark, Mercari, or Facebook Marketplace.

15. They Have Discipline

One of the most important habits of debt free people is that they have discipline when it comes to money. If they struggle with paying off credit cards, they don’t use them. If they only budget $25 a month for their Starbucks habit, they stick to it. 

They keep their word to themselves. They aren’t perfect, but they try to follow their budget and say no when the expense doesn’t fit into the budget. 

Saying no doesn’t mean it’s always a hard no. It can mean no for right now. Meaning if you still want it next month, you can add it to your budget then.

The Bottom Line

If you want to become debt free (and stay debt free), then adopt these 15 habits of debt free people. The best part? You don’t have to wait until you are debt free to do these things.

Start following these 15 habits of debt free people and they will become YOUR habits as well!

If you want to learn more about paying off debt and take your money goals to the next level, check out my free training, How to Payoff Debt Even When You Don’t Make a Fortune.

Thousands of people have seen this webinar and loved it!! I know you will too. It’s free and it’s value-packed.

You can grab your free spot by clicking HERE.