10 Key Characteristics of Debt-Free People (of Modest Means)

The other day a friend and I were discussing why some people manage to live their lives in complete control of their finances, while others are constantly trying to get out of debt fast – and usually in hock up to their eyeballs no matter how much money they make.

I’ve preached that financial freedom can be achieved by anybody regardless of their income level more times than I care to count.

So what is it that separates the financially free from the financially inept?

Why is it that there are families out there with household incomes under $40,000 comfortably making ends meet and saving for retirement with no debt on the books – or at worst, a single mortgage payment – while others who make millions per year like Sinbad, Ed McMahon, Mike Tyson, and Stephen Baldwin have trouble keeping their financial heads above water?

The more I thought about it, the more I realized there is no single trait that determines who will successfully manage their personal finances and those who won’t.

More often than not, it seems to me that people of modest means who exhibit an ability to properly manage their finances have some combination of multiple characteristics.

Here is my list of ten key characteristics that enable people of modest means to lead a debt-free life:

1. They’re Detail-Oriented

People who are in a good financial position always pay close attention to their personal finances. They know how much they earn and they keep track of how much they spend and where every penny goes. Because they’ve got a good handle on the state of their personal finances, they are less likely to buy something they can’t afford.

2. They Realize Debt Is A Mortgage on Their Future

I remember somebody once telling me that debt is a form of indentured servitude where we end up sacrificing our future earnings in exchange for instant gratification. Financially savvy people understand that, in most cases, such a trade almost always ends up being a Faustian bargain.

3. They’re Pragmatic

More often than not, folks who are debt-free are also practical people. Because they are practical, they understand the meaning of value. For example, a car is often looked at merely as means to get from point A to point B, so why buy a Lexus when a Corolla will do? In the same vein, why pay double for designer jeans that will last just as long as the no-name alternatives? Such a philosophy even stretches to the grocery store, where name-brand items often give way to their store-brand counterparts.

4. They’re Self-Reliant

Most people who work hard to maintain a life of financial freedom take pride in being self-reliant. To that aim, they make sure they always live within their means, and save as much money as they can for a rainy day or when times get lean. (They’re also quick to give when others fall on hard times.)

5. They Aren’t Addicted to Shopping

We all know there are people out there who get a high on spending money, whether they have it or not. While not physically destructive like a drug or alcohol addiction, an uncontrolled shopping habit will make it virtually impossible to remain debt free.

6. They’re Patient

People who are debt-free didn’t get there because they were impulsive shoppers, or always looking for instant gratification. If the money for something wasn’t in the budget, then they saved their money and waited.

7. They’re Self-Confident

Because they refuse to let their self-worth be defined by their possessions, the financially free never feel any pressure to spend money in order to try and keep up with the Joneses.     Those who are debt-free understand that their status in life is more accurately conveyed by self-confidence, rather than dubiously deceptive displays of wealth.

8. They Realize Credit Cards Are a Double-Edged Sword

People who are in control of their personal finances aren’t afraid of credit cards. In fact, they embrace them. And while the financially savvy understand the incredible benefits that credit cards provide their owners, they also know that if they fail to pay them off in full at the end of each month, they will pay a heavy price. This knowledge fosters a healthy respect that keeps their credit cards from being abused.

9. They Believe In Personal Responsibility

Financially responsible people refuse to make excuses. If they lose their job, they know it’s their responsibility to have a rainy day fund in place – and if they don’t they’ve got no one to blame but themselves. Short of an unforeseen catastrophic medical issue or natural disaster, they also understand that when it comes to living within one’s means, they are in complete control of their own destiny.

10. They’re Not Materialistic

The pursuit of expensive toys and other possessions can certainly make life more luxurious. But at what cost? I know it’s a cliche, but most people who are debt-free understand better than most that money cannot buy lasting happiness. As such, they often tend to live simpler lives that focus on the joys of family, rather than the accumulation of material possessions.

This is by no means an exhaustive list. However, the more aforementioned characteristics that a person possesses, the more likely they are to be debt free and living a life of financial freedom. How many of them apply to you?

101 comments to 10 Key Characteristics of Debt-Free People (of Modest Means)

  • Great list Len! I think being able to delay gratification is a key. The one about self-worth being tied to things (cars, boats) is also huge.

  • For me, I think being debt-free has a lot to do with how I was raised. I saw what debt and spending could do, and I knew I never, ever wanted to live that way.

    Also, since I didn’t grow up with much, I didn’t have a habit of spending or being used to getting the latest ‘things’. I appreciated what I had, and I still don’t have the desire to spend on something unless it is something I really need. It is all psychological with me I guess.

  • Matt

    I exemplify each characteristic on your list. I have to say I’m rather proud of that.

  • Jenna

    Another characteristic I would add: They have an eye for quality.

    • We have saved a ton over the years by not letting other people set our goals. By knowing how much we have we can portion it out in ways that reflect our values. That is what makes us happy, meeting our own goals.

      Just wondering how people with ADD can approach their finances since they are not detail oriented and get easily distracted. Meds?

      • Jasonr1085

        Whoa wait a minute don’t make such a hasty generalization without fully understanding ADD. I have ADD and I have more saved and more money coming in from investments than anyone I know. I grew up getting horrible grades but eventually learned how to learn in another way. If someone cares about their financial situation, regardless of their learning ability, they can and will overcome any obstacle.

        • Len Penzo

          That is really good to know, considering my son has ADD and is really struggling right now at 14 to grasp the importance of saving money.

      • Manny

        I have friends that are ADD. Like any other issue, some of them handle finances just fine, so to the point that they drive me crazy with how detailed they are. On the other hand, some of friends that are ADD have a hard time with money, some won’t open their mail. So I would be willing to beat that ADD doesn’t mean you’ll be good or bad with finances.

  • 11. They have an innate desire to become magicians.

    No? Oh, sorry – guess that’s just me…

    Most of the things on the list apply to hubby and I. Some days more so than others so I guess the word ‘exemplify’ wouldn’t exactly fit.

    I DO love shopping; internet deal shopping which can become quite addictive. Not as expensive as mall-shopping, so you (read: I) tend to buy more. Nevertheless I rein it in pretty well – again, some days more than others.

    And only recently have I struggled with the car as a status dilemma. It USED to be I happily, nay PROUDLY, drove beaters (JUST sold my high school car 3 months ago! 96 Ford Escort), until we acquired a minivan this month. I think I need therapy to fully accept it even though it’s the nicest car we’ve ever owned! Trying to build a relationship…

    A beater is a beater…a minivan is a seperate status entirely.

    Patience? Never have really been good at that – but it’s a work in progress. Kids have helped that character-building quite a bit.

    Nevertheless, in spite of our sometimes severe shortcomings, we only have our first mortgage (which we pay extra on), paid cash for our cars, have steadily growing retirements, emergency and college funds. Not too shabby and the ONLY way to live.

    Oh, and sometimes I hate being practical. Just thought I’d say that.

    Great article!

  • I love lists. Mr. BFS and I are 27, make $82,500 jointly a year, and “only” have 6-7 years of mortgage debt left. Your list of qualities are ones we strive for, but we don’t have them all yet. I’d give us a score of 8 1/2 out of 10…

    I’m not addicted to shopping, but like Christa, I do get a rush when I’m looking for the best deal online for whatever we needed or wanted enough to buy.

    We are not patient. Or at least we’re not as patient as I wish we were…if we want something and have the budgeted money for it, I will not spend months looking for the absolute best deal. I will buy it within a week or two. Period. Luckily we don’t want much or we’d be in trouble. :-)

  • A healthy dose of minimalism also helps. If you keep your life simple there will be less stuff in it and you won’t be as overwhelmed by the details.

  • Scooter

    I half agree with #8. That kind of assumes that people with no debt tend to use credit cards to make their purchases. Sorry, but that seems a bit of a stretch if you ask me.

    • Selfmade

      I have no debt and use credit cards to my benefit by either getting cash back, discounts in retail stores or more recently chrome points for my Harley Davidson. It is about control. If you are able to use it wisely, with self control it can add additional benefits financially. If your self control is not fully trained it can be devastating to your financial goals. It is also safer than carrying cash and I continue to make interest for another 30 days. We all have our vices, so it really boils down to where you stand within your financial strengths and weaknesses. Good luck in your financial goals.

      • Funmoney

        McDonalds did a study before they allowed the use of card payments and found people spent about 18% more than with cash. Pain centers in the brain are not activated with the use of plastic. So, paying them off is quite possibly still not saving you money. It might offset any perceived benefit of cash back or points if you’re well disciplined. It would be real interesting to see if everybody adopted that how hard it would be on the Card companies…

        • Sue

          Don’t think that example bears up. It’s the chicken and egg thing. I use my cc at drive-thrus IF my bill is going to be substantial. I pay cash if it’s only going to be a few bucks. Got nothing to do with what I choose to spend, rather what I spend determines my method of payment.

    • RKY84

      Scooter. I save up and pay for my cars in cash, and I only have mortgage-related debt. I’ve never had unsecured debt.

      I use credit cards all the time, and have used them for 20 years. I’ve always paid them off in full, on time, every month.

  • @Dr. Dean: I started, but then thought better of ranking them – mainly because I was kind of stumped as to which was the most important. I think delayed gratification IS a big one. Personally, I think #2 and #9 would be my #1 and #1A if I were ranking them. Wait… I trust you know what I mean. ;-)
    @Everyday: Ooo. That is an interesting take that turns my post on its head somewhat, doesn’t it?
    @Matt: As you should be. :-)
    @Jenna: Interesting! I know that definitely applies to me for big purchases like homes and cars.
    @Christa: “Patience? Kids have helped that character-building quite a bit.” Really? Mine have done the exact opposite! LOL
    @BIFS: I used to be really patient. Now I have a teenage son.
    @Susan: That is definitely me. Add it to the list!
    @Scooter: Maybe you are right. My main point was that most folks who are debt free understand the trouble credit cards can get them into. (I know. So why didn’t you just say that, Len?) Well I did, but I had to get the other part in about the benefits of CCs too because I didn’t want to imply that CCs are “evil.”

  • @Scooter, we are debt free but for the house and I LOVE using our rewards credit cards for everything I can – then we pay them off every month. It brings us back $300-$400 a year.

  • We’re debt-free except for the house and also use one credit card for the cash-back rewards. We also bag a few hundred dollars at the end of the year.

  • Awesome list. I think debt-free’ers gain a sense of perspective too. When the goings good, the good save….. This is a big difference with people who keep staying in debt. When one good thing happens they assume it will happen time and time again!

  • These are definitely traits that equate to being financially independent. I’d also add that sometimes people learn these traits through trial and error. One can go from financial ruin, learn via their experiences, and make it a habit of living within their means.

    Okay, maybe another trait to add would be a life-long learner. There are definitely some people who never learn, so “learning” would separate those who can from those who can’t.

  • Jenna

    @Len Penzo – I don’t think it has to be a big purchase to notice quality, clothes, furniture, electronics, etc. The list can go on forever.

  • Sandy E.

    I am debt-free, including my mortgage, w/a modest salary and enjoyed reading your well-written article where the characteristics you noted, I possess – and will elaborate because hey, that’s my detail-oriented personality: #1 – I am very detail-oriented, and can tell you on any given day, what the balance is in my checking, savings account, and how much cash I have in my purse (within about $5). #2 – I realize that were I to rack up debt, I would be spending ‘tomorrow’s dollars’ and if I don’t have the money today, how in the hell do I think I’ll have it next month, (tomorrow) when the bill arrives? I won’t. #3 – I’m very pragmatic. Yes, I drive a beater and when I had company for a week this summer, I rented a brand new car since I knew we would be doing a lot of driving, I got a great weekly rate, of course, after checking around. The first 3 days I was aglow w/the smell, feel of the new car, however toward the end of the week, that excitement wore off. My back was hurting because the driver’s seat wasn’t that comfortable, and the alarm system gave us problems. I was glad to return it and get back into my beater that fit me like a well-oiled baseball glove fits a hand, and also glad to know I didn’t have to shell out car payments for that vehicle in the future, or repair dollars either for its maintenance. #4 Yes, saving for a rainy day is automatic each month. #5 No, I’m not addicted to shopping, but when I do it, my spending is aligned with my values, and I shop around for the best value. I stay focused on my core values and determine the things that are really important.
    #6 Patience is a virtue. #7 My self-worth is definitely not defined by my possessions, and the Jones’ might be in debt up to their eyeballs. Besides, their values aren’t necessarily mine. #8 I have a healthy respect and fear of credit cards and have one card. This is not free money. I use my credit card to purchase airline tickets (that I have saved up for – patience is a virture, and for any online purchases. When I do order something online and use my credit card, as soon as the amount posts, gets out of the pending category, I send an electronic payment for it. I never wait to receive my credit card bill, and always pay it in advance. #9 Responsibility is my middle name. Absolutely agree with everything you wrote. Can’t even imagine blaming others or making excuses – that doesn’t even exist in my radar or being. #10 I’ve found that experiences bring me more lasting happiness than material things. Also, instead of collecting designer anything (purses, shoes, etc.), if I’m going to collect something, it would be $1,000 Certificates of Deposit. I am baffled why members of my gender spend so much $ on designer things ??? Being pragmatic, I just don’t get that. There are some things in life that I know I will never understand, and this is one of them. Having said that, I have had no difficulties acquiring attention from the male gender, without any of that designer stuff, if that’s why women buy them??? Again, don’t understand that. What I do know though is that the designers are undoubtedly laughing all the way to the bank.

    Anyway, thanks for your article – it got me thinking. I would add too that I’ve hit my sweet spot where I’ve reached ‘enough.’ Where ‘enough’ is perfect, bringing me contentment which represents that balance, while too much results in diminishing returns. Also, giving is a very important characteristic of mine (spending on others) makes me realize I have more than enough, and brings me joy, over and over, knowing I am continually making a difference in other peoples’ lives. Wearing a pair of designer heels just wouldn’t do that. Thanks again for your article!

    • Java Programmer

      Good for you! I have been debt-free since 1998, including mortgage-free, and I specially share with
      you the characteristic of sharing with others and making a difference on other’s people’s lifes.

  • Great article – I met some of these to a T

    I am sending this to my wife!

    Thanks.

  • @Forest: Great point. Reminds me of the parable of the ant and the grasshopper!
    @LittleHouse: Another good point, Jen! I know several folks who are now diligent savers, but they had to learn the hard way by getting themselves into debt troubles first.
    @Sandy: Wow! I’m glad my article inspired you to share your excellent comments! Your suggestion for renting cars for short periods when the need arises for special occasions is spot on – I’ve done that on a couple occasions myself. Thanks for taking the time to share, Sandy! :-)

  • Uh, Len?

    I’m not saying it’s not possible but exactly HOW MANY people do you know who live on $40,000 or less “comfortably”? Because you make it sound like there’s a decent chunk. And I’ve met maybe one or two.

    Granted, my husband and I have health problems (so maybe add “lucky enough to have good health” to your list?) but the most we ever made combined was under $40,000. For most of the last three years, it’s been about $30,000.

    We had health-related debt to pay off, and we were hardly completely deprived, but I wouldn’t classify us as living “comfortably” either. Without the debt, it would have been easier, but you’d have to be a pretty big minimalist to live comfortably on under $40,000 a year in most areas of this country.

    • iluvcolor

      Abigail, You have a good point. Unless a couple who makes less than $40,000 annually has a paid for home with low property taxes, it would be difficult to live comfortably. That said, it doesn’t mean they live unhappily.

    • stacy

      My husband and I live on $43,000 a year and do so quite comfortably. We have no debt besides our mortage, save 15% of our income for retirement, have 4 months of living expenses in an emergency fund, drive beater cars and helped our son out by giving him $20,000 for college. Now we are focused on paying our mortgage down faster. I cook from scratch, we don’t eat out more than 4 times a year and we focus our spending on high quality goods that we actually NEED. Not things we just want or “would be nice” type items. Much of the time we purchase things second hand.

  • Awesome qualities Len. This is a great list to refer to every once in a while to make sure we are doing what we can to get out of debt, or if we’re lucky, remain debt-free. My favorite is patience. It’s so darn hard to be patient when a potential purchase looks so enticing.

  • Steve from Maryland

    52…..debt free….including no mortgage… town house value $385K….$575k in tax def. savings…another $1m in cash and equities…… I do have a 24ft boat – 14 years old in excelllent shape…….and just broke down and bought a used 2008 Infiniti G35…….because I gre to hate the turning radius of my 2002 Altima.

  • Barney

    I have been debt free for over 50 years, retired 14 years, spend winters in the sun, have all the toys and never made big money.

    two rules in addition to that list which is great.

    - do I need the item or just want it. More often it is the latter and we skip buying

    - Always pay yourself first. Consider yourself as a debt and monthly put away 10% of your income in the bank, RRSP, 401k etc. This is not an option but a necessity.

  • @Abigail: The number of people I know is really irrelevant to the conversation. Whether I know a dozen people or a thousand, it is anecdotal evidence. I haven’t taken a scientific poll, but I guarantee you the number is not trivial. There are plenty of households out there that successfully manage to spend less than they earn each week. Regarding your statement, “you’d have to be a pretty big minimalist to live comfortably on under $40,000 a year in most areas of this country.” I completely disagree. That may be true in the big metropolitan areas, especially the ones on both coasts of the US – but it’s very doable in the rest of America (especially in the flyover states).
    @Andrew: Patience is a virtue, my friend!
    @Steve @Barney @Lynn: Thanks for sharing and showing that being debt free is very achievable!

  • Great List.

    I think #11 should be THEY ARE HARD WORKING. I can’t say I’ve ever met a financially savvy person who was a lazy couch potato. They mow their own lawns, learn new skills as their hobbies, do many things themselves.

  • Russ

    Context: I’m male, 33, unmarried, >$100K in savings, earn about $100K a year.

    1) I wouldn’t call myself detail oriented. In some areas, sure, but when it comes to finance I just rely on Yodlee.

    2) I wouldn’t phrase it as ‘a mortgage on my future’. My only debt is my mortgage, but when I had credit card debt I didn’t think of the long-term ramifications. I just don’t like paying interest.

    3) Generally I’m pragmatic, but not in the areas listed. I’d rather have a Lexus than a Corolla, and rather have a pair of Nudies than a pair of Walmart jeans. I’m willing to pay for quality in certain areas.

    4) Yes I’m self-reliant, though I’m not especially quick to give.

    5) Yep.

    6) Yep.

    7) Yep.

    8. Yep.

    9) Yep.

    10) Nope. I like buying nice stuff, I just don’t do it indiscriminately. The words ‘simpler lives that focus on the joys of family’ make me *cringe*.

  • We are almost there, except for the car part. That is my husband’s addiction and it is a costly habit. But he is slowly turning around. Every thing else on the list is me – the practical engineer.

  • @Russ: When I was in my late 20s the thought of family and the simple life made me cringe too. Then I got married and had a couple kids. It changed my perspective. Not saying it will change yours, but you never know. :-)
    @asithi: We’re two peas in a pod. I’m a practical engineer too! :-)

  • Amanda

    Really like this article. I fit all 10!

    Russ, materialism and liking nice things are different IMHO.

    Frugal as opposed to “cheap” people do like quality items, they last longer. However, the ones that can live at least “semi-comfortably” on less than $40,000 a year, like me, usually keep these quality items for a very long time.

    I must agree with the health problem poster that we don’t pay for medical care. I wish I could eat out more without worrying about it. Currently we aren’t saving money, just breaking even. I need to get a job!

  • Len – the $40K might be a low income estimate even for the flyover states. A family of four in Michigan or Ohio with household income of $40,793 is eligible for reduced price school lunches for the 2010-11 school year. However, your tips are right on.

  • Great article. As far as $40,000 being a low income estimate….I wish I made that much. Right now with no work advances in sight my husband and I earn less than half that figure. Even so we are almost debt free. There are occasioanl emergencies like the diabetic dog’s medical care that we haven’t been able to save enough for.

    I think making do on much less than the average income is preparing us to live well when better incomes are available. I will not be rushing out for shopping sprees or replacing our beloved 94 Honda. I will be saving and spending wisely on the things that really matter.

  • @Amanda: I understand that you are just breaking even right now, but if you can try and save something, even if it’s, say, $10 a week that would be a great first step, Amanda! I bet you can do it!
    @Monroe: Thank you. I realize I was pushing the envelope a bit with that $40k figure, but I am confident it can be done! :-)
    @WorkingPoor: Stay determined and please hang in there.

  • Jan

    Debt free- mortgage free- children gone
    Making less than $40,000 a year
    Happy–traveling–seeing the grand baby
    Our health insurance was part of the early retirement. That alone keeps our heads well above water. With health insurance, we could live on $30,000 and still be comfortable. Adding social security in a few years will make us feel—rich!

    • Good for you, Jan, and enjoy your retirement! I am envious! You’re an inspiration to people who want to get out of debt fast and you are already at where a lot of us are striving to get to one day. :-)

  • Kim

    My husband and I are comfortable but do not consider ourselves rich. We started out with boxes for end tables and a mattress on the floor. Sat on the floor to watch TV…. Yep, we started out with nothing….. I have always pinched the penny. And today we have our reward for doing just that. My husband spends more than me. Desires more than me. But he respects my conservative nature and always brags that we have what we have today because of my wife.
    One thing I’d add to the list is….. You MUST be satisfied with your life. Happy with your choices. Some people are just never happy or satisfied and think that material things is what will make it happen. I too have a credit card and use it for EVERYTHING…..However, I ALWAYS pay it off monthly. The only reason I use the credit card for everything is to earn the frequent flyer miles which gives us our free travel…….worth every penny spent when you only use the card for things you NEED. You’d be surprised at the end of the month when you look at your credit card statement. You are able to determine things you had to have and things you could have done without. Then the following month you work on those things you don’t need. What it does is bring your spending to the forefront of your life. And when you are debt free you are happy………

    • Thanks for the comments, Kim! You and I sound a lot alike! :-)

    • Lori

      We like to use the cards for certain large expenses that we would incur anyway, like gas for the cars, home heating oil, our monthly commuter rail tickets. We even have put college tuition, fees and book bills on the card, when we had the money saved to pay it off immediately. We get cash back from our credit card company according to how much we charge, and it’s gravy, because we would be paying those expenses monthly anyway. It’s hundreds of dollars in our pocket every year.

  • I think I possess some of these qualities but not all. I’m a work in progress and each step leads to more progress! I know that staying out of debt is insurance for my future and I work on it every day.

  • Can’t argue with those! I’d also add “they like control.” After all, isn’t that what managing your money and finances is all about at the end of the day?

  • Addicted to spending money is a good one. I think for some people it is not a lack of financial organization but rather a lack of self control when it comes to spending habits.

  • @Stephanie: Interesting take. I know the Honeybee likes control. LOL
    @YourOwnRetirement: I agree entirely. In fact, I’ll go so far as to say a lack of self control trumps a lack of financial organization.

  • Rob Lewis

    I would sum it up this way: Debt-free people want to have financial flexibility and control, they realize that continuously building up their net worth is the way to achieve their goal, and they have the discipline and conservative nature to do it over the long haul.

  • Obino

    So simple and precise, it’s come naturally, you can’t fake it. I have about 8 of these, hope i wake up tomorrow to add the extra 2. Lovely piece.

  • As we see it, habits makes the lifestyle of a person. They also forms the financial life of a person. Thus, we really need to pay attention and be consistent in practicing diligence and patience.

  • Mike

    I live, for the most part, completely, debt free. No mortgage, no car payments and one $500.00 credit card, which is paid off monthly. I live in a modest home, drive two (over 20 years old) cars (which I’m actually proud to be seen in, despite what others may think or say) and I shop only when and where necessary. I used to have a lot more. The house with the pool and all the debt that went with it. But, it was like that commercial where the guy on the riding lawnmower says, “Will somebody please help me?” I’m much happier now, living within my means with much less. And, really being able to save, comfortably is an added bonus. Happiness, is truly a state of mind.

  • ALI

    I have achieved as an engineer living deft free; paid off my house( 250K) at 34 and the cars( both lexus) on cash.. I am not paying anyone extra for anything from my hard earned money. now i can plan my own retirment and investments.. for next 20 – 25 years of salary..its a great feeling guys.. you should all try it..I am stress free even at work .. go to work for passion but not as a need..

  • Sam

    #11 Luck! Not having some illness or ever being unemployed.

  • Nice post! My favorite: They believe in personal responsibility. They take control of their actions and emotions.

  • My wife & I are completely debt free, we don’t even have a mortgage and I would put my signature under this post!

  • Diane

    I am 65 & have been debt-free for years. Have my father to thank for that. When I was 25 I ran up a fairly good amount on credit cards & eventually went to my father for advice. He was, shall we just say, not pleased. I got quite a lecture on credit card use, i.e., do not put perishable items such as clothes on credit cards, wait until you can afford them. He bailed me out…paid off the credit cards in order to save me the interest & then I paid him. And let me just say, you would rather owe money to Guido the loan shark than to think about stiffing my Dad for a payment. It taught me a lesson. I never let the credit cards get out of control again (didn’t want to disappoint him) & learned to save to buy things & “delay gratification”. It’s really not a bad way to go.

  • olderworker

    I agree with most of this, BUT, when I lost my job, through a big company downsizing, it was extremely hard to live without using credit cards (and, in fact, a bank loan on one occasion) to get by. I did finally find a temp job, and then a permanent job, but it took a while.

  • Justin

    Its funny how the majority of the comments are people saying they are debt free (I am as well), but people should read this who are not debt free as well.

  • Kraabel, CG

    My wife & I practiced all of these points and taught them to our daughters. Today our daughters have good educations, good jobs, modest happy homes & very nice families. We are very proud of them and want them to pass these lessons onto our grandchildren.

  • Ash

    I really think a big box to tick on these characteristics would be age (aside from dependents as well).. Not that it “can’t” be comfortable to live “comfortably”, but as a married man starting my life on a single income for my wife, one car (had to sell the second) and a home mortgage (bought for a steal as a foreclosure)… I still find it very uncomfortable and hand to mouth.

    I feel like a failure in that I can’t save any money and had to sell a $17,000 car I had just because I couldn’t balance that with the healthcare, food, mortgage, and regular bills of life. I know each month I could do ‘better’, but it is always a bit of a struggle.

    That said it is possible and we are not only happy, but survive and have our stomachs full. I was able to save $4,000 this year- BUT I really think when people are older with mortgages paid off, cars able to be paid in cash, and making however much MORE than $40,000 it would be very easy to say “Yea.. I could do that comfortably.”

  • CD

    Mr. P: Points 3 and 4 ring very true for me. I look at home repair as a means to protect my investment and perform most all tasks myself, from plumbing to electrical, carpentry and so on. Appliances, fixtures and the like are all good used items difficult to discern from new. In the 12 years I’ve been in my home, I have spent less than $7,000 on repairs and maintenance and by always making frugal choices, can state: my only debt is the mortgage itself. May I please make a related topic suggestion: “Used appliances and home equipment: ## ways to save.” Scratch and dent as well as re-use / recycle vendors offer tremendous savings.

  • Lori

    Credit is a great tool and a terrible master. We have tried all our married lives to pay as we go, and have for the most part succeeded, except for a mortgage, of course. But we didn’t buy too much house, so that’s manageable.

    When I see the trouble that too much debt causes friends, I realize we did the right thing. One couple have repeatedly run up credit card bills to massive amounts ($50K or so), then refinanced to pay off their credit cards. End result: they transformed unsecured debt to debt secured with the roof over their heads, robbed their home of the equity they had accrued, and now owe about three times what the house is worth–and face foreclosure if they can’t make the massive mortgage payments. Plus, they’re back in credit card debt–again. So, they’re making minimum payments on about $35,000 in card debt. They will never get out of the hole they have dug themselves, and their marriage is dying because of it.

  • Wow – I fit all 10 characteristics 100%. Great list!

  • Kay

    Also, don’t forget coupons! Real ones, of course, not the “Buy $20 and get $00.1 back!” variety.

  • Elisa

    Looking forward to joining you guys on being mortgage-free next year…a year from today approximately!

    My husband and I are everything on that list, but I must say the past few months I have been everything but patient! Just can’t wait to be mortgage free so I don’t have to work so much anymore.
    I’m 32, husband is 35. We bought our house with almost no downpayment…
    $270K mortgage, bought in 2006.
    Now in 2013 we can sell for $600K minimum after spending $50K in renovations done by ourselves. *Toronto!*
    Looking forward to having kids next year…and enjoying life mortgage-free, no financial stress…vacations every year and eating nothing but high-quality foods!! You can have everything but if you don’t have your health, you have nothing at all.

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