11 Traits of Debt Free People

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How do some people have complete control over their finances, while others are spinning desperately out of control? Why are some people able to live debt free, while others are drowning in past due bills and collections notices?

We’ve staked our careers on the belief that anybody, and I mean anybody, can achieve financial freedom, regardless of their income, education or upbringing.

What is it that separates the debt-free from the debt-enslaved?

It’s certainly not income! We’ve coached doctors making $250,000 per year, but were struggling to keep the lights on. Think about the mega-income celebrities who can’t seem to stay out of debt (or bankruptcy court), like Nicolas Cage, MC Hammer, Mike Tyson and the late King of Pop.

But we’ve also coached people making $30,000 per year who were able to fight their way out of debt like Rocky Balboa, build an emergency fund, save for retirement and live comfortably within their means.

So what separates the financial winners from the financial losers?

1. They understand that debt hog-ties their income

Circa 1,000 BC, King Solomon said, “the borrower is slave to the lender.” Debt is a form of slavery because your future earnings are already spoken for. You aren’t free to use all of your income, because it belongs to your creditors. The financially free realize it’s a game not worth playing!

2. Instead of paying credit card bills, they pay attention

The debt free elite pay close attention to their finances. They know what they earn. They know what they spend. Because they keep a watchful eye, they’re able to make well-informed financial decisions, like living on less than they make and avoiding purchases they can’t afford.

3. They don’t depend on anyone else to bail them out

I cringe when someone says their only hope of getting out of debt is winning the lottery or when they put their faith in the government to take care of them. Debt free folk are adamant about providing for themselves,  living on less than they make, being prepared for financial emergencies and planning for their own retirement. They realize that nobody cares about their money as much as they do.

4. They aren’t Lone Rangers either

The financially free don’t depend on others to provide for them, but they do realize they can’t win on their own. They listen to teachers, read books, consult with experts – financial coaches, investment advisers, mentors – and they understand the need for accountability. No one climbs this mountain alone.

5. They practice patience

People who are now living debt free didn’t get there by giving into instant gratification, impulse shopping or following their every whim. They made a decision to practice patience in this area. If they want something, they wait, save up and buy it when they can afford it with cash.

6. They’ve kicked their shopping habit

You know people (and may be one) who have the shopping bug and hit the mall whether they can actually afford to buy or not. But the financially free know that if you don’t swear off shopping for shopping’s sake, it’s nearly impossible to be a financial winner.

7. They’re practically practical

The vast majority of people enjoying the debt free life are very practical people. They look for value and utility rather than brand-name bragging rights. They realize that a car is just transportation and not a status symbol, so they choose a Toyota instead of a Lexus. They realize that designer jeans don’t make their butt look any better than the department store brand.

8. They’ve overcome their Stuff-itis

We’re the most materialistic society in all of history. And while expensive toys and fancy things can make life a bit more lavish, the financially free know that money can’t buy true happiness. They tend to live more simply and spend their time enjoying the real “finer things in life” – their family, friends and pursuing their life’s passions.

9. Their confidence is in themselves, not in their stuff

The debt free realize that their self-worth isn’t determined by their car, house, clothes or possessions. They don’t feel a need to impress other people in an attempt to win their approval or esteem, and they aren’t impressed with people who do.

10. They’re fanatical about personal responsibility

People who have achieved debt free status got there by making no excuses and accepting full responsibility for their finances. They know it’s their responsibility to earn a sufficient income, to have an emergency fund, to live on less than they make and so on. They take complete control of their financial future and they’re more than willing to do the hard work now so they can reap the benefits later.

11. They have William Wallace courage

Let’s face it, looking ahead at seemingly insurmountable levels of debt can be terrifying. Facing anemic bank accounts, pushing for a higher paying job and changing deep-seeded financial habits is enough to strike fear in the heart of most folks. Those who have succeeded know that, as with any great accomplishment, climbing the mountain of financial freedom requires some risk, vulnerability and a tremendous amount of courage. They’re determined to make it no matter what stands in their way or how hard it looks.

If you’re desperate for debt freedom, you have to begin to realize that you CAN get there. Don’t let your circumstances, education, income or upbringing be an excuse any longer. We all have the ability to develop these traits…that is, if we want it bad enough.

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Take Action

How bad do you want it? What will you do to get there?

Which of these traits do you currently possess? Which do you need to develop?

Let us know in the comments section below!

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