After years paying off debt, you're finally free and clear---and you want to stay that way. Here's how to change your habits and stay out of debt.

You’ve recently paid off some debt and have sworn to stay out of debt forever. At first, that feels easier said than done. Temptations are everywhere, and you’ll need to avoid them and change your habits if you’d like to stay out of debt.

Getting out of debt requires a ton of motivation and self-control backed by a solid game plan. It’s a life-changing process that can teach you a lot about yourself and your finances. But no one wants to experience it twice.

To stay out of debt, it’s important to identify the habits that got you into debt in the first place— and change them.

Adopt a frugal mindset

Make it a daily habit to utilize your resources and spend less than you earn. If something can be done for less money and it doesn’t have a direct negative effect on your happiness or wellbeing, consider making a change in your life and your budget.

This may mean cutting down on some of your expenses by dining out less each month, calling up your insurance carrier to negotiate a lower premium, or switching to a cheaper phone plan.

If you start spending less than you earn each month, there’s almost no way you can get into debt. Plus, you’ll have more money to save or put toward other financial goals like investing in retirement.

Boost your savings rate

Speaking of saving, one of the best ways to avoid getting into debt is to accumulate plenty of savings in case any unexpected expenses ever come up—which they will. The more money you have saved, the more prepared you will be for anything life throws your way.

After you’ve committed to spending less than you earn, you should be able to squeeze more money out of your budget to boost your savings rate. Another way to find extra opportunities to save is to check all your bank and credit card statements (or let a service like Trim or Truebill do it) to make sure you aren’t paying for any monthly subscriptions that you don’t need or can do without. You can also collect spare change each week to cash in at your bank or continue trimming your budget by deducting $10 from each variable or non-necessity expense.

Even if you’re only saving one or two percent more each month, that money will make a difference and allow your emergency fund and other savings accounts to grow so the next time a large unexpected expense comes around, you won’t have to resort to a credit card.

 Set payment reminders for all your bills

Late payment fees can be a huge waste of money and even put you back into debt. Fortunately, it’s easy to avoid them. Paying your monthly bills on time or even before the due date is a great habit to help you stay out of debt.

To ensure that you pay all your bills by the due date, consider setting up automatic withdrawals so your payment can be made with little to no effort on your part. Just make sure you have the money in your account.

Don’t buy things you can’t pay off in 30 days

If you can’t afford it, try not to buy it no matter how tempting it might seem. When tempted to make a large purchase, think about it for at least 24-48 hours to make sure you really need to spend the money. Consider if that particular item or service will add value to your life, and how much.

Most times, impulse purchases don’t add a ton of value to your life – especially if you have to finance it and pay for the item month after month. Avoiding buying something you can’t pay off in 30 days is a good rule of thumb because, even if you use your credit card to purchase something, you should always pay off the bill in full at the end of the month to avoid having to pay interest on the balance.

 Start earning more

Earning more money is a good habit, especially if you aren’t inflating your lifestyle as a result. If you’ve already cut your expenses, but still feel like you don’t have much left over to save each month, it may be time to increase your income.

You can ask your current employer for a raise, look for a new job, or start a side project that earns you some extra money each month – whether it’s babysitting, freelancing your skills and services, or selling items online.


Getting out of debt is hard, and staying out of debt can be even harder. But if you shift your mindset and change your habits, you won’t fall into old patterns that put you in the hole in the first place. While difficult at first, these habits will help you keep your head above water for many years to come.

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