• Katie Zurawski

10 Habits of Debt-Free Families

Updated: Apr 28

Becoming debt-free is possible. In fact, my family has even accomplished it.  Back in 2012, my husband and I had well over $50,000 worth of student loans, car payments and credit card bills. We thought we could never get out from the hole we dug.  We were paying thousands of dollars of interest each year (probably even each month) and getting nowhere.



But in January 2015, we made the commitment to do everything and anything it took to get rid of the last $28,000 we had left.   And we did it in just 18 months.  It was the BEST decision we ever made and all our sacrifices in that 1 1/2 yrs was well worth the payoff. You can read out story here.


Many people dream of living a debt-free life.  Rarely though do they take the steps necessary to actually get there.  It is not easy.  I can be uncomfortable and time-consuming and just plain not fun.  BUT the end result is so worth it.

Our family became debt-free by following many of Dave Ramsey’s principles of Financial Freedom.  We did NOT follow all of them.  We did what worked for our family best and with the intensity necessary to get the job done…. fast.  Along the way, I had to become disciplined in a few areas of my life to accomplish this big goal we had established.  And I want to share with you some of my the habits I still use today to maintain a debt-free lifestyle.


Here is a video of our debt-free scream – one of the most memorable moments of my life!


Here are 10 habits of debt-free families:


1. They track every single dollar they spend.

It may sound cumbersome to write down every dollar you spend BUT it is so important.  $2 at the gas station, a gallon of milk at the store, even library fines you have to pay… they all add up to REAL dollars.  My favorite app is called ACE Budget.  I use it on my tablet and have lots of categories from haircuts to birthday party funds.


2. They balance their checkbook regularly.

Many people are fine not balancing their checkbook.  If money is in the bank that is good enough for them.  BUT I like to keep track using an Excel spreadsheet.  I also highlight in yellow a transaction when it clears through my bank.  It helps me know how much we have spent and think ahead at the rest of the month.


3. They don’t listen to other people’s advice when it came to what’s normal.

Did you ever hear the quote “You are who you surround yourself with”?  When we started our journey, many people told that “you’ll always have a car payment” or that deducting interest is a great way to save on taxes.  Were these people debt-free – NO!  Take advice from people that are already living the life you want to achieve.  And don’t let others sway you from your end goal – paying off debt.


4. They aren’t afraid or ashamed to buy secondhand.

Not matter how much money I have, I will always consider buying certain things used.  Clothes, sports equipment, furniture, toys…. these are all totally fine for me to look for secondhand. I frequent the resale shops. I go to rummage sales.  I checkout buy-sell-trade sites when I am looking for something in particular.  There is no shame in buying used.  If it does bother you look at it as another way to save something from ending up in a landfill.  Mother Nature will thank you.


Oh and I also buy many of my kids Christmas presents used – already assembled, 1/3 of cost, and often gently used.


5. They are smart about what types of assets they keep.

One of the first things Steve and I did when we started our own journey is we took a good look at our assets.  We both had whole life insurance policies from when we were kids.  Not only we were paying the premiums for both each month, we also had cash value in them.  Both of us also had larger term insurance policies.  We cancelled those whole life policies and put the cash values towards our debt.  And we saved ourselves on the extra monthly expense in premiums.


6. They keep an emergency savings.

You need to have an emergency savings.  Who wants to call mom & dad when the furnace goes out or the car needs repairs?  Who wants to owe someone else?  When you are first starting out, I suggest $1,000 in your savings.  Once you have your debt paid off bump it up to 3-6 months expenses.  And DON’T touch it unless you have a real emergency.


We actually had the opposite of zero in savings.  We had too much in savings.  We took everything over our $1,000 and put it towards our debt. We luckily had nothing major happen during our debt payoff besides having a baby and needing a new washer and dryer.  Both we were able to handle.  Rainy days will happen – be prepared.


7. They think through BIG purchases.

Debt-free families don’t make rash decisions.  They think about the pro’s and con’s of large expenses.  They plan for BIG expenses.  They “sleep” on their purchases before jumping all in.  And they don’t finance anything unless it is an absolute necessity (and, no, that new furniture set is not a necessity!).


8. They set a monthly budget and adjust it accordingly.

One of the biggest mistakes I made before I started getting intense about debt-payoff was using the same budget every single month.  First, make sure you have a general budget.  Then you need to adjust your budget for the month ahead.  Every month is different.  There are birthdays, school fees, Christmas, months when the water bill is due and months when it isn’t.  Plan accordingly.


Use a budgeting app to set a budget for the next month… before it begins.  Take a peek at monthly statements such as heating bills to help you determine how to allocate your funds.


9. They regularly take a look at their financial situation.

To be debt-free, you need to know exactly where you are at.  Don’t put your head in the sand.  So many people want to ignore the large balances because, quite frankly, it freaks them out.  I get it!  But resist the lure of ignorance and commit to making yourself responsible for all of our accounts and being fully aware of where you are at.


10. They aren’t scared to have tough conversations about money.

Talking about money isn’t easy.  In fact, it is one of the top reasons why people get divorced.  Sometimes arguments about money stem from a simple lack of communication. Other times it’s because a couple isn’t on the same page or don’t even know what pages they have to look at.


Smart couples talk monthly about their finances… what’s coming up this next month, how are we succeeding, what can we work on. This can even mean dreaming about all the wonderful things you get to do once you are more financial free!  Tough conversations about money are inevitable.  You can choose though whether you are proactive in setting up a time where you can discuss this openly or wait until a huge blowout occurs.. it’s up to you!


Do you have a dream to be debt-free?  Whether you have a family or not, you CAN accomplish this.  I am by no means a financial guru and a certified financial planner is a great person to talk to. BUT I am always happy to answer any and all questions you may have!  Connect with me on Facebook here!

#debt #finances #debtfreeliving #DaveRamsey #settingabudget

©2020 by The Decluttering Queen. Proudly created with Wix.com