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10 Characteristics of Debt Free People

Debt free people aren’t born, they’re made. It’s easy to look at people without debt with stank-faced envy as you spend your days paying off student loans, car payments, or the speedboat that solved your midlife crisis. However, becoming one of them might not be as complicated as it seems.

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We’ve scrutinized the top ten characteristics and personality quirks of the typical person without debt so that you too, can live without the fear of red credit.

They Pay Attention to Details

People without debt diligently monitor their personal finances. They keep track of how much money comes into their household and where every dollar ends up. They know what they have (and more importantly, what they don’t have) and they’re less likely to spend irresponsibly.

To get here, create a budget and stick to it. If need be, create a document on Microsoft Excel or collect receipts at the end of each week and put them in a safe spot to review at the end of the month.

They are Practical

They make logical purchases, both large and small. Don’t splurge on designer jeans when a lesser-name brand will look just as good. Debt-free people look for the quality in the product, and invest their money accordingly. If you don’t need to stay in the four star hotel for a two night vacation, downgrade to a two star and pocket the cash.

Related Post: 3 Bad Money Habits That Are Keeping You Broke

They live within their means

Debt-free people live on less than they make, and as a result they are self-reliant. That means they don’t depend on anyone else to bail them out of a financial situation or treat them to an unneeded expense. The transition from dependency to independence is especially difficult for younger people who have recently started living on their own, but no one can rely on their parents forever.

With that in mind, debt-free people seek the advice (not money) of those older and wiser than they are. They read books, consult professionals, and watch finance shows to get help.

They are patient

10 Characteristics of Debt Free People

If they want something that’s not in the budget, they save until they can incorporate it into the budget. Impulse purchases are one of the biggest causes of debt, so walk right past the new gadget that would put a dent in your spending.

To get the best deal, shop competitively. Check prices online and walk into stores and talk to employees to see if a special sale is going on that can save you even more.

They are confident

This characteristic goes along nicely with #2. Debt free people don’t feel the need to be defined by material objects and aren’t looking for a change in their status quo when they make a purchase. Major purchases are not an excuse to display your wealth to your neighbors, so don’t treat them as such.

They understand credit

With great power comes great responsibility, and there is definitely a great deal of power behind credit cards. It’s necessary to recognize not only the convenience of plastic, but also the dangers associated with it. People without debt understand the risks and benefits associated with credit cards and do not abuse them. They keep up on their payments and use credit as a means of building their personal credit score, not as a crutch to make an impulse buy.

They have a goal

10 Characteristics of Debt Free People

It’s hard to plan for the future. Debt free people often have a major goal in mind – like a retirement home or sending their four kids off to college – so they are able to map out how to pay for it, which reduces their unnecessary spending. The aforementioned use of a program or professional consulting will help you figure out how much you need to save to reward yourself in the distant future.

They make sacrifices

It doesn’t always have to be major (at least not all of the time) but skipping out on mini-splurges like eating out, buying another black cardigan, spending money on apps, are helpful to maintaining a fat savings account and staying out of debt.

Related Article: Get Out and Stay Out… Of Debt: Learn to Live Debt Free

If you’re trying to get out of debt on the other hand, making sacrifices is necessary. When you’re debt free, the luxuries can come back but you need to set some boundaries for yourself in order to change.

They pay cash

Paying cash has many hidden benefits. When you choose green over plastic, you can’t spend the money you don’t have. With cash, debt free people can physically see and feel what they can afford, which keeps them on track with their budget.

They Have Less Stress

People who are debt free people are also hassle free. Remember, they have less of a financial burden than the person up to their eyeballs in payments every month. Stress will lead to poor work performance, illness, tension, and a general unhappiness. They are able to continue to manage their finances in a calm and practical way, which allows for the nine characteristics above to bloom.

Related Article: The 4 Biggest Financial Mistakes Young Professionals Make

It takes a lot to rid you of your debt. Becoming debt free might require some serious lifestyle changes, but nothing worthwhile comes easy.

Photo Credit: ©iStock.com/MarioGuti, ©iStock.com/Shalith, ©iStock.com/myshkovsky

Emma Giebler Emma Giebler is a freelance writer who covers a variety of personal finance topics. Her expertise includes homebuying and saving money. Emma graduated from Syracuse University.
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