5 THINGS DEBT FREE PEOPLE DON’T DO!

 

Are your bills piling up on the desk?

Truth be told, if we want to live happy, healthy & fulfilling lives, not only is our spiritual, health & nutritional fitness important to stay on top of, but our financial fitness is important too!

After my divorce, I was living under a pile of debt.  It’s not uncommon for most people.

But know that it is possible to get out from underneath the weight of debt.

I was able to do it in just over 2 years, and you can too!

 

Here are 5 habits & behaviors that successful people do, and that you can do too, to begin shifting yourself out of your financial hole, and begin building wealth!

 

1) THEY DON’T RELY ON CREDIT

credit-cardDo you use your credit card often, even for the small expenses you have?

If you want to get closer to having all debt paid off & staying that way, you’ll need to get used to using cash and put away the plastic.    People who are debt free (or living close to debt free) know that credit should be used sparingly & smartly.   Never for an impulse purchase.

Additionally, when they must use it, they avoid a big bill later on by paying off the balance as soon as possible and keeping a close eye on when the bill is due to be paid.  Credit cards definitely come in handy when you need to book a hotel or make an online purchase.   However, if they are not immediately paid off they can become a dangerous tool that will financially bury you.

 

2) THEY DON’T PAY BILLS LATE

People  who enjoy little to no debt understand that paying bills late only results in late-payment fees and a credit score that is less than ideal.  If you think paying a few days late is no big deal, you’re wrong.

late-fee

Did you know that your credit payment history makes up about 35% of your credit score?

To achieve financial health, pay your bills on time.   Set up reminders in your calendar, or automatic withdrawals from your bank account so you don’t have to worry about missing a payment on time.

Financial software (like Quicken) allows you to set up payment reminders.

 

 

3)  THEY DON’T IGNORE SAVINGS

To remain debt free in the future, it’s important to have a good emergency savings fund.   The rainy days will come so it’s important to prepare ahead for them.  Without the emergency fun, you have no alternative but to borrow money from friends, family, or use the credit card again.   Once again, you will have to dig yourself out of a financial hole.    Financial planners recommend saving at least  six months’ worth of expenses, if you are older 9 months is the recommended minimum.

no-savings

According to a recent Bankrate survey, more than 60% of Americans said they don’t have enough money in savings to cover a $500 emergency car repair.

Only 37% of them said they would be able to withdraw money from their savings account if they had an unexpected expense.

 

4) THEY DON’T BUY TOO MUCH HOUSE

keys-to-new-home

If you have a family of four, you don’t need a house with 6 bedrooms & a home theater room. Be responsible with your living expenses.  Lay off the luxury living!     People who have minimal debt know how to buy just enough home so they and their loved ones can be comfortable.  Bigger homes are more expensive to maintain, heat, & pay taxes on.   If we don’t spend wisely, we risk carrying a very large debt for years to come.   During that time if you fall on hard time, you may be forced to sell the home at a loss.   Besides, if you get a bigger home, you’ll just wind up spending more filling it up with more crap you don’t really need!

 

 

5) THEY DON’T IGNORE THEIR BUDGET

People who have minimal debt have a budget that they live within.  Part of the budget is putting money into savings for a rainy day.  Stay within your budget & build your wealth up with any extra income or money you come into!

budget

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