7 Characteristics of Debt-Free Living

Debt-free people are a rare breed, especially in today’s world. Almost everyone has bought the lie that financial peace only happens when your FICO score is above average, you’ve got credit card points out the wazoo, and your mailbox is full of preapproved credit card offers.

When you hear about people who have absolutely no debt, live on less than they make, and have a stash of cash for emergencies, you might think they’re . . . weird. But living a debt-free life isn’t only for a special group of people. Anyone can do it with hard work and the right habits.

 Here are seven characteristics of people who live debt-free.

What Are the Characteristics of Debt-Free People?

Debt-free people make money decisions with the long term in mind. They approach money differently than most people, and it shows in their everyday habits. They:

• Go against the culture's money norms
• Practice self-control
• Set clear, written goals
• Live with gazelle intensity
• Choose contentment
• Make short-term sacrifices
• Give generously

Here's how debt-free habits stack up against what's considered "normal":

Let's see how these characteristics play out in real life.

Why Are Debt-Free People Countercultural?

Debt-free people are countercultural because they reject the idea that credit cards, car payments and student loans are just a normal part of life.

They know debt isn’t a tool that helps people win with money. Yet society tells us you need a credit card to survive, can’t go to college without student loans, and will always have a car payment. Those are straight-up myths.

People who live debt-free don’t buy into these norms. They don't rely on credit cards for everyday spending (or any spending for that matter). Car payments don’t take a chunk of money from their budgets each month. They treat debt like it’s week-old meatloaf they found in the back of their fridge—they dump it fast. Debt is normal. So be weird!

How Do Debt-Free People Use Self-Control?

Debt-free people use self-control to say no to impulse buys, flash sales and social pressure to spend.

According to personal finance expert Dave Ramsey, adults make a plan and follow it. Children do what feels good. Someone who's serious about getting out of debt has the self-control to walk right past the shoe sale or the aisle full of giant TVs without making an impulse purchase.

Debt-free people don’t buy stuff unless they can pay cash. They’re willing to wait, work and save.

Self-control also means knowing when to say no in other areas of life.

It’s hard to live a debt-free life if you’re always saying yes to every social invitation that comes your way. Whether it’s a girls shopping trip, vacation, dinner out with friends, or a night at the movies, it’s important to keep the word no in your vocabulary.

Brandy S. knows firsthand that saying no today can help you reach your goals tomorrow:

“We’re completely DEBT-FREE, y’all! We learned how to budget and also changed our perspective on money and our ability to work as a team to reach our financial goals. It has taken a lot of sacrifice and discipline. We’ve said no to many wants so we could save as much as possible, while still trying to enjoy the little things . . .” — Brandy S.

Why Do Debt-Free People Set Goals?

Debt-free people set specific, measurable, written goals. They don't leave their future to chance. They decide where they're headed and make a plan to get there.

Sara P. did exactly that. She set a clear goal for her future and made decisions that supported it every step of the way:

“I'm 21, I'm a business owner, and I have no debt. We are taking a bit of a different journey than others, but I am DETERMINED to never have a mortgage. We bought land last year for our future home. This year we bought a fifth wheel so we can continue living with lower expenses and save money [to build].” — Sara P.

Why Are Debt-Free People Gazelle Intense?

Gazelle intensity means attacking debt with total focus—cutting every corner and finding every dollar until it’s gone.

If you’ve taken Financial Peace University, you probably remember Dave talking about gazelle intensity. It’s what happens when you’re so fed up with debt that you run as fast as you can (like a gazelle) in the opposite direction.

People with gazelle intensity look for ways to squeeze every single dollar they can from their budget. They clip coupons, shop sales, cut unnecessary expenses, and even pick up a side hustle. They’re all in.

Why Is Contentment Important for Debt-Free Living?

Contentment matters because it kills the urge to compare, and comparison is what drives a lot of unnecessary debt in the first place.

People who believe in their money plan don’t worry about keeping up with everyone else. They’re fine with driving an older car because it doesn’t have a payment. They don’t need to take expensive vacations just to post a glamorous photo on social media. They actually look at price tags and not only at brand names. Why? Because they’ve given up trying to keep up with the Joneses next door.

That contentment frees up more money to attack their debts. And with each debt they pay off, their confidence and motivation grow by leaps and bounds.

Debt-free people know they're on their own journey, chasing after their own goals and dreams. Rather than comparing themselves to the neighbors or people they follow online, they stay focused on their own goals. As a result, they enjoy more peace and contentment along the way.

Why Do Debt-Free People Make Sacrifices?

Debt-free people make sacrifices because temporary cuts now create more breathing room later.

Eating out, going to the movies every week, and paying for the premium cable package—these are the types of things a person might have to avoid while becoming debt-free. But keep in mind: Budget cuts are just temporary. Once the debt is gone, there’s more room in the budget for those dinner-and-a-movie dates.

Why Are Debt-Free People Generous?

Debt-free people give generously because they've created room in their budget to bless others.

They know that the more they keep their hands open, the more fun they can have with money. Whether they’re helping family, friends, church or a mission they believe in, it’s always more fun to contribute to a bigger cause than stockpile that money for themselves. As Rachel Cruze says, “Giving is the most fun you’ll ever have with money.” Try it and see for yourself!

Brittany B. discovered that generosity isn't something you wait to enjoy after you build wealth. It's part of what makes winning with money so rewarding:

“Generosity is fun. It’s fun in big ways (when you get to help start a community fund close to your heart) and small ways (paying for the group dinner or contributing to a friend’s fundraiser on FB).” — Brittany B.

How Do You Start Living a Debt-Free Life?

Living debt-free starts with a plan. A written, zero-based budget shows you exactly where your money is going and helps you find extra money to put toward debt.

EveryDollar is the budgeting app built by Ramsey to help you create a zero-based budget and start the debt snowball (where you’ll pay off your debts from smallest to largest until they’re all gone). You don't have to stay stuck in debt forever. Start today, and keep moving toward a debt-free future.