Cultivating healthy money habits is a critical part of building wealth and there are some people who have mastered the art of managing their money. As a result, they have built a set of practices which help them to stay on track of their finances and avoid being broke.
If you are wondering what it’s like to avoid being broke and to stay cash flow positive, then you have come to the right place.
At the end of this post, you will learn about the habits of people who are never in debt and start to master your finances today.
People Who are Never in Debt Follow Budget
One of the biggest habits of people who are never in debt is the habit of following a budget. Budgets are incredibly helpful with keeping track of where your money is going and also helps you to plan for expenses.
It also lets you know how to prioritize your cashflow for what’s important. This can allow you to avoid debt and stay afloat financially. The people who are never in debt ensure that their budget is easy to access and it’s easy to manage.
As you think about how to set up a budget keep in mind that how you budget makes a difference and there are many ways in which you can create a budget that works for you.
They Keep Their Monthly Expenses Low
Another one of the habits of people who are never in debt is the habit of keeping their monthly expenses low or practising a frugal lifestyle. This allows them to finish the month with a surplus of funds instead of always being in the red month after month.
When you keep your monthly expenses low you free up your cashflow to take care of other aspects of your money management including saving, investing and donating to charity.
So take a look at your monthly expenses and make a plan to keep those expenses at a minimum so that you can develop a strong habit of staying out of debt.
People Who are Never in Debt Track their Expenses
This habit is tied to the act of budgeting and it is practiced by people who avoid debt because it enables them to keep more of their income instead of overspending.
With this habit, the first step begins with making a list of all of your expenses – look at your bank statements, credit card bills, utility bills and list them in order of highest to lowest. Then separate what’s a non-negotiable and what’s not necessarily and make a decision to lower your expenses.
This is one of the top habits of people who are never in debt and helps to ensure that they are cash flow positive.
They Save a Percentage of Their Income
Saving money is critical to people who are never in debt because they plan for the future and know that putting away funds for a rainy day is always a good financial decision.
When you budget, track your expenses and have a clear picture of your finances, then saving money is your next step and it gives you a chance to tuck away money for any expenses that may come up in the future, thus allowing you to avoid debt.
People Who are Never in Debt Live Within their Means
Living within your means is important because you know your financial situation and you learn to stick to what you can afford.
People who avoid debt live within your finances and this allows them to keep their expenses low each month and build wealth.
They Pay off their Credit Cards in Full Every Month
This is one of the ways in which people end up in debt because they only pay the minimum payment on their credit cards. In order to avoid credit card debt, you have to pay off your credit cards in full every month to ensure that you meet your obligations and avoid interest fees.
When you also pay off your credit card in full you are able to maintain a healthy credit score because you never miss a payment signalling to the credit bureau that you are financially responsible and good with managing credit.
Is it Possible to Have No Debt?
As you consider these habits, the answer is YES, you can live without debt. I have personally lived without debt because I followed the aforementioned habits and I also lived within my means.
It’s possible to do this and to live abundantly. It begins with changing your mindset, your behaviour and also considering other factors for why you may be in debt. Perhaps you need to find a better paying job or look at starting a side hustle to pay off your debts. Look at your personal financial situation and take the steps that work for you.
It is possible to have no debts and it begins with you – just have faith, believe in yourself and apply the steps in this blog post.
Tell me in the comments, what habits speaks to you and what steps will you be taking?
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