Becoming free of debt is no small task for most people but many have been able to do so. What a lot of people don’t talk about is how to stay debt-free after you’ve paid everything off. It’s not as easy as it seems.
How to Stay Debt-Free
I’ll be the first one to admit that when I think about having all of my debt paid off I start to think about the things I’ll be able to do, things I’ll be able to buy, etc. If you’re thinking the same way, stop! You won’t ever be able to stay debt-free if you’re constantly thinking about what you’ll spend your next bit of money on. So, how do you stay debt-free?
1. Create a budget and stick to it.
As a part of becoming debt free you probably had to create a budget. The best way to create a budget after becoming debt-free is to set a zero-sum budget (where all your income is spent one way or another at the end of the month). The money not being spent will go into savings (or debt payments if you still have them). Once you’ve set a budget, don’t waiver from it. That will only open a window for debt to get in.
2. Automate your finances.
Once you’ve created a budget, automate the rest. Set your bills to automatically draft from your account so that you won’t encounter late fees or credit score drops. You can also have your savings withdrawn from your paycheck instantly so that even saving money can be effortless. If you have to think about your finances less you’ll be less likely to create more debt.
3. Don’t live outside your means.
This is a huge point on the list of things you need to do to stay debt-free. Most people wrack up debt by living outside their means, buying things they cannot afford. If you continue to do this once you’ve become debt-free you won’t remain without debt for very long.
4. Hold yourself accountable.
Holding yourself accountable is another big deal. You may not realize it but if you have a lackadaisical approach to finance your finances may suffer. If you find yourself having trouble holding yourself accountable for financial decisions, chat with a friend you can trust and have them remind you have why you want to stay debt-free.
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- How One Couple Paid Off $200K in Debt
5. Cut out temptation.
Another great way to stay out of debt is to cut out temptation. For example, if you have multiple credit cards consider cutting the ones you don’t need/don’t use. This will prohibit you from being able to use them for an unnecessary purchase.
6. Join a debt-free community.
If you’re searching for more support on your debt-free journey, join a debt-free community. The Saving Advice forums is a great place on the internet where many people collaborate on various personal finance topics, including being debt-free. There are a number of other great debt-free communities on the web as well.
7. Keep a reminder of your old debt.
Those trying to stay debt-free have likely already paid off a tremendous amount of debt. Keep a reminder of the absolute agony that was paying off your debt. To do this, some people have framed loan payments, loan amounts, statements, etc. You can also simply keep a reminder somewhere you look often (like a desk drawer).
8. Celebrate sometimes.
Lastly, if you’ve paid off a lot of debt and are living a debt-free lifestyle you deserve to celebrate sometimes. To maintain a debt-free lifestyle you need to allow yourself some wiggle room from time to time, so remember to enjoy yourself! A bit of comparison shopping or finding a good deal will also make you feel great and reinforce the savings process.
Are you maintaining a debt-free lifestyle? What’s your secret?
Photos: Finance Solutions and Giphy
Amanda Blankenship is the Director of Social Media for District Media. In addition to her duties handling everything social media, she frequently writes for a handful of blogs and loves to share her own personal finance story with others. When she isn’t typing away at her desk, she enjoys spending time with her daughter, husband, and dog. During her free time, you’re likely to find her with her nose in a book, hiking, or playing RPG video games.