Ten Things Debt-Free People Do - Call Debt Free Associates
1. They are
detail-oriented and very organized
Paying off debt
means knowing what you owe, developing a budget and sticking to it. Debt-free
people keep track of their bills, how much they earn, how much they save and
how much they invest. They speak to experts and have a tracking system in
place, whether it’s an Excel file or another program. Demers went to a
financial planner when he started a new job in 2008. “I went to a financial
planner to get my house in order and set up a debt repayment plan, as well as
placing a portion of my paycheque to an RRSP.”
2. They’re
stress-free
Debt creates stress.
People worry about money, they dread next month’s bills, they can’t sleep at
night which leads to poor work performance… the list goes on. Getting rid of
debt gets rid of stress as Demers experienced when he finished paying off his debt.
He says, “It felt amazing. It was like this huge weight was off my shoulders. I
didn’t go out to celebrate, though. I’m merely modifying my plan now.”
3. They operate
within a budget
Just because they
have disposable income doesn’t mean they spend haphazardly. If they can afford
it, they’ll spend. If not, they’ll wait or forgo spending.
One of the reasons I
was able to pay off my debt was because I chose to pay with cash. If I didn’t
have the money, I didn’t use credit as that would increase my debt load.
5. They don’t have a
lot of credit (and they understand credit)
Credit, when
understood and used properly, is a good thing. Debt-free people aren’t afraid
of credit. Instead they use it properly to build their personal credit and pay
their cards off every month to avoid interest. Demers uses his grandparents’
attitude towards credit. He says, “Never, ever use them as a substitute for
cash. They must be paid off every month. My card’s limit has been set
deliberately very low for that reason.”
6. They understand
value
Do you really need
ten tops from a fast-fashion store or one very good, high-quality top that will
be worn for years? Debt-free people consider the value of items before
purchasing versus mindlessly buying stuff.
7. They’re patient
Debt-free people
make the hard decisions. If they can’t afford something, they either wait until
they can or choose to do without.
8. They comparison
shop
They also cut
coupons, wait for sales or buy second-hand. That’s not because they can’t
afford it. They know that it’s silly to automatically pay full price for
everything. Debt-free people have a habit of looking for realistic and
pragmatic ways to save money.
9. They’re not
materialistic
Debt-free people
might like nice, shiny toys but they don’t define themselves by their
possessions.
10. They think long
and hard about taking on new debt
I was debt-free for
a long time and was hesitant to take on new debt via a mortgage. It took a lot
of thought, some calculations, a lot of research and talking to real estate and
financial experts before making the choice to take on new debt. Thanks to my
previous experience being debt-free, I continue to practice my debt-free habits
as well as focus on paying off my new debt as soon as possible.
Demers would also
take on new debt but with a few caveats, ”If I ever do take on debt, it will be
exclusively with a credit line from a credit union or with an online bank like
ING Direct. Their interest rates are favourable, and on top of that, I feel as
if I’d be in a position to get a better deal.”
*Name changed by
request
