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Who wants to be debt-free? Raise your hand if you are ready to say goodbye to money stress! Today we are digging into some of the best money habits of people who are debt-free. Let this list motivate and inspire you to adopt even one new habit on your journey towards financial freedom!
I’m all about building healthy habits – the way I eat, building movement into my day, my morning routine, my gratitude practice. Most of the success I have experienced in the past few years, I attribute to my habits.
Today we are talking about the habits that help us stay debt-free and successful with our money! In doing a bit of research for this post, I visited some of my favourite money blogs to see the best money habits THEY were rocking. Here is the list I compiled with my thoughts and experiences with each habit, too. Some of these overlapped on multiple lists, and some of them appeared on only one but jumped out at me as something we do as part of our debt-free life.
Check out this list to see if there are habits you could add to your own life (or maybe things you already doing). Even if you are not debt-free yet, these money habits are crucial to helping you achieve that goal!
Live on less than you make.
Live on less than you make means that you are spending less money than you are bringing in. Seems logical, but many, many people spend more money each month than they make in income.
When you base your budget on less money than you make, you’ll have money left over to pay off debt or put in savings. When I set up our budget each month, I set our income as the lowest that it could possibly be. That way, I know that our necessary expenses are covered, plus anything extra that comes in our cheques can go directly towards our goals!
Use a budget.
I have yet to come across someone who is doing well with their money who doesn’t attribute that success to their budget. Your budget allows you to take control of your finances and make your money work for you. It doesn’t have to be complicated or super-restricting. Your budget is simply a tool to organize what is coming in, what is going out, and moving money towards your dreams!
If you aren’t making a meal plan and using it to organize your grocery shop, I guarantee you can cut your grocery budget to save some money. Probably by a LOT!
A meal plan saves you time and energy – no more coming home from work and standing in front of the pantry, wondering what you will cook for dinner. Plus, it cuts back on food waste and allows you to eat healthier. Hello?! So many great benefits!
Save money intentionally.
If you dream of being wealthy someday, let me tell you – it isn’t going to happen by accident. You have to plan your savings, whether it is for retirement, for a trip or a new car, or to replace the furnace in your home. Get intentional – put that money in an account where you can’t spend it on a whim, set a goal, and work to achieve it.
Think about this – Christmas is the number one time people turn to credit. But Christmas isn’t a surprise. It is the exact same date, year after year. So instead of getting to the beginning of December and trying to buy gifts with the little wiggle room in your budget, make a plan right now. Set aside money each month to save for Christmas, so when it comes time to shop you aren’t tempted to pull out a Visa and buy things you can’t afford.
THIS is intentional living. Looking ahead, making a plan, achieving your goals.
Learn more about intentional savings!
You can apply the same strategy to anything you want to save for. The money won’t just magically be there when you need it unless you intentionally set it aside.
Talk openly about money.
Communication. One of the toughest skills we have to master as successful humans. Money is one of (if not THE) leading cause for divorce. The key to getting on the same page and having similar financial goals is – you guessed it – communication. Talking openly about money can alleviate some of that stress and reduce the fights.
For the first eight years we were together, I’m sure that darn near the only thing we ever fought about was money. We had terrible money habits and different goals and priorities. When we made mistakes (and we both did), we hid them from each other because neither of us wanted to let the other one down.
Learning to talk openly and respectfully about our finances has been the greatest gift to our marriage. We both know our money goals, and we both own the mistakes when we mess up.
It may take some practice to talk openly and calmly about your money. Tough conversations lead to great results. And I promise it is so worth it!
Never carry a balance on your credit card.
Another habit of people who are debt-free – if they use a credit card, they always pay it off in full. Never carrying a balance means never paying interest and never owing money to someone else.
I am of the mindset that debt is bad. I don’t want to owe money to anyone, ever again. The freedom of my money working FOR me is the best, and I will not turn back to the chains of debt ever.
But with that said, I will tell you that we both use credit cards. Partially for convenience, and also because we earn dollars with our favourite airline. BUT – and this is the key – we don’t carry a balance. We don’t ever look at the minimum payment and say, “Oh, we will pay it off next month” – we use it as cash, in that we only spend what we can afford and have budgeted for.
Read more – C is for Credit Cards
Credit cards are a slippery slope – banks want you to carry a balance because that’s when they start making their money. BILLIONS of dollars, in interest and fees, go to the banks and credit card companies each year. BILLIONS. Credit cards are easy. Carrying a balance is easy. But if you want to start rocking better money habits this year, commit to getting out of debt and not carrying a balance on those cards ever again.
Get comfortable with a bit of sacrifice.
Debt is easy. It allows you to buy what you want when you want it, whether you can afford it or not. It means last-minute trips, expensive furniture, and dinners out.
But it also means stress. Fights. Interest. No thank-you!
When you choose to be responsible with your money, it might mean making sacrifices. Saying no to going out every weekend. Not going on a vacation this year. Cutting back on your expenses.
It also means less stress. Less fighting. And more money in your pocket! Hello?! Winning!
Increase your income.
A habit that comes up time and again is that people who are successful with their finances find ways to boost their income. I know it isn’t as easy as waving a magic wand to make more money. You need to get intentional – pick up some overtime, get a second job, or sell all the things you can.
We found that using a budget, making a plan for our money, made it feel like we had gotten a huge raise, without any effort at all. Because we weren’t wasting money on things we didn’t need (or even want) and we were intentionally choosing what we spent it on.
Celebrate the successes along the way.
Choose to find joy in the small steps – that’s how you make big progress. Celebrate when you achieve milestones like paying off your first debt, or hitting the halfway mark, or saving your Emergency Fund. Be proud of what you have accomplished – you have worked hard and deserve to celebrate!
Toast yourself with a bottle of your favourite wine, go on a movie date, or do whatever your celebratory jam is!
If you want to dig into some more lists of habits and read some different perspectives, here are the ones that I read to inspire MY list!
And of course – check out the rest of our ABCs of Intentional Finance series for more awesome inspiration for all things money, habits, and goals!
I’d love it if you would take two seconds to pin this post or share on Social – you never know who may need to read these habits today!