The Personal Finance Help Center

How to Stay Debt Free For Life


So you’ve finally made it – you’re now debt free. Congratulations. However, now that you’ve achieved your dream, you need to be extra careful not to fall back into the bad habits that got you into trouble to begin with. Here’s what you need to know to maintain your new debt free lifestyle:

Keep a Reminder of the Pain

I always suggest to people to hold onto some of the most outrageous bills from when they were deep in debt. Keep the worst of them in a picture frame in a kind of collage of debt. It will serve as a constant reminder to you of why you need to remain debt free for the rest of your life.debt limit 5 MPH -- staying debt free for life

Treat It Like an Addiction

Another suggestion I give people who have been through the trauma of being in serious debt is to treat it like an addiction. Think of your bad debt as being something which you may easily fall back into, just like drugs or even like having been on a diet and then falling off the wagon. Get friends and family involved to help you stay debt free. Explain that you have a problem with spending money and you want their help to make sure you don’t fall back into debt.

Just like with any addiction, you will need to have a plan of action, and form new and healthy habits. Find the pleasures of financial planning and becoming responsible with money.  Saving money can be just as addictive as spending it, but it is an addiction that comes with better consequences for your life.

Join Online Communities

There are lots of forums devoted to helping people recover from serious debt problems. You can join such communities and help others. Not only will it feel good to help others with their problems, but it will also help you to stay strong in not falling into the debt trap that you had been in until now.

Don’t Go Crazy

Just like when you go on a diet, you need to allow yourself a treat once in a while or you’ll end up binging. This means that it’s okay to splurge once in a long while and go out to eat or get yourself that cute dress you had your eye on. Just put yourself on a schedule and budget so that you know you have to save up the money to buy the thing that you want instead of wasting piles of cash buying something on credit.

Leave Credit Cards At Home

When you go out window shopping, leave your credit cards at home so that you aren’t tempted to spend money buying things you don’t need. If you really need to shop for something, bring along some cash so that you can splurge without going crazy on the credit cards.

staying debt free -- no entry for debt

Avoid Opening New Credit Card Accounts

You do need to hold onto a credit card or two in order to make sure that you won’t have problems later on if you want to buy a home or rent an apartment. However, at the same time, avoid signing up for those store credit cards which offer you 10% off your first purchase. While that can be a good deal when you want to make a big ticket purchase, it may be a problem for you as someone who wants to remain debt free.

Find Free Things That Make You Happy

Spend more time hanging out online at free forums, visit free museums, learn to take a walk in the park somewhere, do whatever you enjoy that doesn’t cost money. By doing so, you’ll find yourself avoiding spending money on your credit cards and you’ll be able to keep from falling back into your bad debt habits.

Save The Money for Retirement and Emergencies

Finally, now that you’re debt free, you’ll find that you have more disposable income since the money you had been spending to pay down the debt is no longer getting spent. Instead of spending the money on things you don’t need, put it away and build yourself a bigger retirement savings account and or an emergency fund so that when you do have problems you’ll be able to remain debt free for life.



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