Majority of the American population have at least one debt to their name. This is based on the March 2013 report from the US Census Bureau about the 69% of US households being in some form of debt. This data describes 2011 and while this is a decrease from the 74% back in 2000, it is still considered a majority.
For most people, that will put them in either panic mode – thinking that the economy is so bad that they have no chance of ever getting out of debt. Another reaction will be a sense of complacency to know that a lot of people have credit obligations just like them – which can be interpreted as the new norm.
However, successful people will not view it that way. Instead of focusing on the negative side of this statistic, they will zoom in on the word “majority”. That indicates that a smaller percentage of the American population does not have any debt to their name. No matter how small this group is, you need to focus on how they stayed out of debt.
There is no such thing as being born with the natural instincts to be good at money management. While there are a handful of individuals born to successful parents, that does not guarantee that they will be as financially adept as they are. If that is a fact, then you should know that you have every capability to be successful but only if you know the right traits to adapt.
Traits you need to adapt from successful people
If you have to change anything in your life because of your debt, you want to pattern them on people who live the type of life that you want to have. Naturally, those in debt will look towards the people who do not have debt to their name. At least if the successful people you want to emulate have debts, they must know how to manage their credit so they control it and not the other way around.
To help kickstart the changes that you will implement in your life, let us enumerate the specific traits that help successful people lead debt free lives.
They are organized.
Being organized mean you get to maintain full control over your money. Debt free individuals know how much income comes in every month and they also know how much and where every penny goes. That is something that you need to possess – if not develop. If it does not come naturally, you can use a budget plan to help you monitor your finances and keep them in order.
They are confident.
A trait that keeps successful people debt free, and which you probably have already, is self-confidence. In terms of your finances, this confidence will translate into your independence of material possessions. That means you do not need the assurance of expensive items or the latest gadgets to prove that you are successful. Luxury cars will not be a temptation for you – neither is a million dollar home.
They are patient.
If debt free people really want something that is not within their budget, they have the patience to wait until they have saved enough money to buy it in cash. That is a great way to keep a debt free life and from incurring unnecessary credit.
They are self reliant.
If you want to be like successful people, you must be self-reliant. This means you do not like borrowing from people or professional lenders to get what you want. This will prompt you to save up for any emergency situation. That does not mean you will isolate yourself. On the contrary, this boost in your savings will allow you to lend a helping hand to those around you.
They accept full personal responsibility for themselves.
Another helpful trait that you should develop is being personally responsible for yourself. It will make you more cautious of every decision that you make – especially when it comes to your personal finances.
They are have specific goals in life.
Like any success story, it all begins with your goals. If you want to emulate debt free people, you need to have a goal in mind. Like the previous characteristic, this will help you make smarter choices. It’s actually very simple. If it will not lead you towards your goals, then you should not spend for it.
Now that you know how debt free individuals stay that way, you need to develop the traits that will help you lead the same lifestyle as they do.
How you should live your life to maintain debt freedom
Once you have achieved debt freedom, you have to know that it is not permanent. Just like a person who lost weight continues to exercise and regulate what they eat, you also have to work on keeping your debt freedom. Here are some tips that you can use to make sure you will never fall into another debt pit.
Live on a budget – or more specifically, live within your means.
Let your savings grow with your income, not your expenses.
Make a list before you make a purchase. If it is not on your list, do not buy it immediately. Think about it and if you still feel strongly about it, include it in your next list.
If you cannot buy it in cash or pay for it immediately when the credit card bill comes, do not buy it.
Grow your emergency fund to at least 6 months to a year.
Don’t let all your money sleep in your savings. Make smart investment risks but do not put everything is one basket.
Keep on making financial goals. Don’t stop with debt freedom.
Now that you are debt free, you have to give yourself some form of reward. Celebrate every once in awhile – especially after achieving a huge milestone in your financial goals.