Everyone dreams of being debt-free—and this dream can come true. Debt-free people do these 10 things to get rid of credit card debt or whittle down student loans—and you can adopt these habits, too.
Check out these 10 habits of people who are living debt free
- They set financial goals.
Focusing on a concrete aim will inspire you to stay on track. Be specific with your goals and develop a timeframe to achieve them. For example, don’t just say, “I want to save money.” Say, “I want to save $5,000 for my summer vacation by Memorial Day.”
- They pay off their balances each month.
Having a zero balance helps you avoid compounding interest and hefty late fees. Still working toward that lofty goal? Adopt a strategy for paying off debt, like the debt avalanche or debt snowball method, which both work for those with low incomes.
- They aren’t afraid to say no or set boundaries.
This may mean skipping a pricey brunch with friends to eat leftovers at home or suggesting a game night instead of going to a show. Good friends won’t question your financial priorities.
- They establish and stick to a budget.
Embracing a budgeting approach, like the 50/30/20 rule or cash envelope system, lets you take control of your spending and eliminate extra expenses.
- They have an emergency fund.
Being able to draw on savings in an emergency keeps you from putting unexpected medical or auto repair bills on credit and racking up debt.
- They reevaluate their budget and spending plan to avoid burnout.
Budgeting can feel overwhelming if there’s no room for fun. Revisit your monthly plan and build small splurges to motivate you to keep going and prevent budget burnout.
- They use digital banking tools to budget smarter.
Digital banking allows you to schedule your bill payments in advance to avoid late fees and set up overdraft protection.
- They automate savings.
Saving is more effortless when you don’t think about it. You can use digital banking to automatically transfer money into your savings account each month. Put bonuses and tax refunds right into your savings account, too.
- They look for ways to save.
Clipping coupons and meal prepping are great starts. Think big, too! Transferring a balance can save money on high-interest rates.
- They track their progress.
Seeing how far you’ve come can push you across that finish line and help you start living that debt-free life. Saving for a down payment on a home? Look at where you were two years ago, a year ago and six months ago, and you will be amazed at how your efforts pay off.
Learning from others is a great first step to becoming debt-free. To get additional assistance tailored to your unique financial situation, use the Members 1st MyConcierge™ service through our mobile and online banking services.