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The Top 10 Tips for Debt-Free Living

Avatar for Gaye Levy Gaye Levy  |  Updated: January 4, 2021
The Top 10 Tips for Debt-Free Living

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Bailing yourself out of debt and remaining debt-free is not so much about tackling the debt as it is about the way you live your life every single day.

I say this from experience.  When you learn to be frugal instead of frivolous, you discover that you have a lot more money than you thought you did.  You also find that frugality is not something to dread but rather, in its own way, is an adventure in and of itself.

Top 10 Tips for Debt-Free Living | Backdoor Survival

Of course paying off debt should be of the utmost concern to anyone who is interested in living a prepared lifestyle but beyond that, how do you stay out of debt?  To me, debt-free living is simple-living and I have definite thoughts that can help you do just that.

My 10 Tips for Debt-Free Living

There are many steps you can take to help you move towards a debt-free life, but these are my favorites.

#1 – Avoid the temptation to buy stuff when money is short.

If you don’t have money rolling in, you will have to resist the urge to spend. Too often, people decide they “deserve” to treat themselves and they go spend money frivolously when the budget is tight. Perhaps they go out to dinner. Maybe they upgrade the cable “because it’s their only form of entertainment.” Some go and buy a new blouse or scarf to give themselves a little lift. It’s easy to justify a small expenditure of $3-4 for a cup of coffee.

We don’t have to cut out all things beautiful and wonderful, but there is a time and a place for everything. When you are bailing yourself out of debt, it is not that time. Choosing to spend on small things is just as dangerous as choosing to spend on more expensive items. Small things (like that cup of coffee) can add up to an enormous amount over the course of the year. You will never see it coming as it dribbles out $5 at a pop, but by the time 12 months has passed, you may have spent well over a thousand dollars, just a little bit at a time.

When we find ourselves deeply in debt, it is sometimes because we were wasteful, and those are the habits we need to break. Remember the old adage, “Use it up, wear it out, make it do, or do without.”

Resolve to go on a personal spending freeze for a month to help break the habit.

#2 – Cover food, health, and comfort

Food, health, and comfort are categories that are open to a lot of personal interpretation.  You can spend very frivolously on these items, or you can spend modestly, yet wisely.

You have to eat, so you should purchase food that is inexpensive but nutritious. It is important to do this to help prevent illness because being sick costs money in missed hours at work, doctor’s visits, and medications.  On that same note, do not skimp on important medications. You also need to pay your utilities and house payments to remain comfortable and safe.

Cover your basic necessities, but spend some time learning to differentiate between wants and needs.  In my article, The Sweet Spot of Frugal, I wrote:

There is not a darn thing wrong with wanting something.  Where people get into trouble is failing to recognize and understand the difference between need and want.  Needs are things that are required to live your life.  Food, clothing and shelter, with all of their permutations, fall into the “need” bucket.

On the other hand, the want bucket includes a new car, a larger house, 20 different pairs of shoes and a vacation trip to Paris.  There is nothing wrong with these things if you can afford them without sacrificing your needs or going in to debt.

#3 – Learn to entertain yourself.

We live in a world in which we are constantly stimulated. People walk around with a phone in their pocket, in perpetual contact with the rest of the world. We spend a great deal of time on social media. We watch television and movies. We have entertainment and communication at our fingertips constantly.

But all of this comes with a price, and that price is not just financial. Many people are completely unable to entertain themselves. There are many ways to entertain yourself that do not require electronic devices.

  • Head out to the library and spend some time curled up with a good book.
  • Do arts and crafts. You can be productive while clearing your mind. (I have recently begun coloring on a regular basis, and I absolutely love it.)
  • Ban electronics from the table and actually have a conversation at dinner time.
  • Take a walk outside instead of paying for a gym membership.
  • Take the kids to the neighborhood park instead of paying to take them to an amusement park.

Learn to enjoy spending time quietly, without all of the stimulation. You may find a new kind of peace.

#4 – Learn skills.

When you learn a new DIY skill, it’s not just a productive hobby. It’s something that can help see you through the tough times. The ability to do things like preserve food, make clothing, build needed structures, and knit warm comfort items can make a rough spot a lot more comfortable.

Not only will you be able to provide these things for your family, but you can still give lovely gifts when the occasion warrants it, and you might also be able to make some money from your abilities. (Stuck on what abilities to master? Here is a list of productive skills.)

#5 – Cook from scratch.

If you are not already cooking from scratch, there are a lot of reasons you should be. Breaking up with processed food items will not only save you a fortune, but it will help you to become healthier. You can avoid questionable ingredients when you make it yourself, but when someone else prepares your food, you are at their mercy.

When you buy an item that someone else prepared, whether it was the person who works at the deli or the person on the assembly line at the factory, you are funneling your money into the time someone else spent making your food. Cooking from scratch is really worthwhile when it comes to flavor, nutrition, and satisfaction, and you will save a bundle. Don’t forget to use up your leftovers!

#6 – Learn to take care of yourself

There are a lot of things we spend money on for personal care that we can easily learn to do for ourselves. I’m not just talking about manicures, pedicures, and hair removal.

Quite a few trips to the doctor could be ruled out with some smart self-care. Learn about natural remedies, including essential oils, for minor concerns instead of going in to get a prescription.  It seems like nearly everyone is on prescription acid reflux medication but there are  a lot of home and over the counter remedies to resolve the issue. Colds and flus can be treated at home without the need for a doctor’s visit.

Additional Reading:  20 All Purpose Remedies Using Essential Oils and DIY Miracle Healing Salve

Having the supplies and know-how for basic wound care can often prevent a hefty emergency room bill. Of course, use your head and seek medical attention for anything that is serious.

#7 – Fix things

We live in a disposable society and the fine art of fixing things seems to be lost for most people. But repairing instead of replacing can save tons of money over time. Before throwing a broken item out, take some time to try and figure out how to repair it. Put together this Fix-It/Clean-It Kit to help conquer small repairs.

For bigger repairs, there are many websites that offer how-to guides for fixing everything from your Maglite to your laser printer to your espresso machine. You can find service manuals for many products online at the manufacturer’s website. And lastly, try calling the customer service number. Many times the company will guide you through troubleshooting steps or even send you free parts. I have found that this works especially well with plumbing issues.

Mending clothing is also a lost art. Sewing a ripped seam, replacing buttons, hemming, and darning socks are all little jobs that can be undertaken while sitting around spending time with the family.

#8 – Buy used instead of new

Take advantage of the non-thrifty spending habits of other people. When they decide to “trade-up” and purchase a new item, you can often get their lightly used items for a song. Watch websites like Craigslist or your local online garage sale sites, go to actual garage sales, and hit the thrift stores. Here is a list of things to look for when shopping for used items:

  • Small appliances like crock pots and mixers (plug them in to be sure that they work)
  • Books
  • Cast iron anything
  • Clothing
  • Jewelry
  • Furniture
  • Sporting Goods (Raise your hand if you ever bought a piece of exercise equipment with the best of intentions, but only used it once or twice)
  • Camping gear

It is worth noting that the ultimate used purchase is a vehicle. A car that is only a year old has depreciated enough to save you thousands of dollars off the sticker price.

#9 – Don’t buy things on credit

It should go without saying that when you are trying to get out of debt, you should resist the urge to accumulate more debt. The obvious exceptions are the purchase of a reliable vehicle and the purchase of real estate, since most of us don’t have the cash lying around for either of those expenditures.

If you can’t restrain yourself, cancel your credit cards. If you need something, save up for it. It will actually take you less time to pay for the item by saving than it would to pay it off after the fact, once interest begins to accumulate.

#10 – Make extra money with the specific goal of paying off debt

Finally, if you really, truly want to get out of debt quickly, focus on making some extra money for that purpose. It can be tempting to use that extra money for new stuff, but if you resist the temptation you will be out of debt in no time. Use the snowball method described in this article to pay things off as quickly as possible. Here are some ways to make extra money for wiping out debt.

  • Get a second job
  • Do odd jobs, like babysitting or mowing the neighbor’s lawn
  • Sell stuff – if you have clothing that goes unworn, exercise equipment that is unused, or furniture sitting in the basement getting dated, put an ad on Craigslist and get rid of it. (Bonus: you are also de-cluttering!)
  • Have a yard sale.  Take selling stuff to the next level if you have a lot of it and host a garage sale.
  • Sell scrap metal. If you have a strong back and a truck or a trailer, you can offer free disposal of old appliances. Haul it to the metal recyclers and cash in.
  • Make things to sell. If you are a talented artisan or cook, you can often sell your wares. Try Etsy or the local farmer’s market. Be careful not to invest too much money until you see whether there is a market for your work.
  • Start an online business that doesn’t require you to buy anything.
  • Rent out a room in your home. This is especially effective if you live near a college or university.

The Final Word

Living without debt gives you a freedom that most people do not have these days. When you are tied to a car payment, a credit card payment, a loan payment, and student debt, you do not have the freedom to simplify your life and spend more time with the family. You will be eternally trying to make enough money to satisfy your debts. Often you will get into the vicious cycle of needing to replace an item as soon as it is paid off (and sometimes even before).

Embrace simplicity and pay off your debts. The peace of mind that debt-free living brings is more valuable than anything you could ever buy.

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10 Responses to “The Top 10 Tips for Debt-Free Living”

  1. Now aged 72, how did that creep up on me? Dropped out of school 4 months before final exams due to an intense hatred for a bullying teacher. Started work at 15 as an errand boy delivering groceries on a bike. Mum got me a bank account and told me to save and not get into debt. I put £1 a week away, I earned £2/17/6 p week. Did an engineering job, a warehouse job, went on buses as a conductor, went as bus driver, got married at 24 and was able to put half of the price of the house we were buying down. survived the 15% mortgage hike in the eighties, brought up two boys. got my first car in my thirties, went abroad for the first time in my forties, living comfortably now due to saving hard , working hard, never being out of work for more than a couple of weeks- if you knock on doors as well as writing letters it shows a willingness to get off your backside and work. Never been in debt with anything. I have been a bit lucky but a lot savvy. Take care Phil

  2. So what does one do when they have already been doing all of these things all along?
    There is no place to go from that but bankruptcy and nothing in life but drudge. It
    has been that way for 40 years of raising my child myself and not being able to trust
    anyone to rebuild a life with! It has been as hard as can be but we are still here
    and doing as we are able. HArd not to really mind it when others seem to h=be having
    it easy, but such is life.

    • Hang in there Rusty. It sounds like life has not been the easiest for you but you still do the best you can in spite of it all. God bless.

  3. Gaye~~Love all that you put in this article, and I love your ‘about me’ page. My husband and I are starting the process of building a log home, JUST starting~~as in, still need to get water and electric hooked up so we can have supplies we need for our build. I am looking for ideas for debt free living, which is our goal with the build of our home, including having minimal housing/living expenses, ie. grow our own meat, get egg layers, milking goats, etc., and have our home built as efficiently as possible so that we have minimal extra utility expenses. I especially loved your idea #8 as we have been finding deals on Craigslist that we will need in our log home as in cabinets, doors, sinks, light fixtures, etc. Hope to use more of your tips to really expand our ability to be free of debt. I have been blogging our journey if you wouldn’t mind checking it out, and giving me a few tips. Thanks so much~hoping to peruse your site more in the coming days.

  4. re: #1: it may be easier to change spending habits if you start by keeping track of your usual expenditures for a time–i would suggest at least a month. i did that; i carried a small notebook with me everywhere, and wrote down everything i bought, even if it was just a 50-cent snack from a vending machine. then, when i looked back over my record, it was easy to see where the money was going, plus i realized that lots of what i was buying wasn’t necessary and i could’ve lived very happily without it. it took a little time, but that exercise changed my outlook on what i really needed (and wanted, for that matter) and what i didn’t. another trick that helps is to put all my change into a piggyback at the end of the day. i never notice the change isn’t there the next day, and i save a little dough (at first i would leave two quarters in my wallet in case i needed to make a call and my cellphone wasn’t working; then i realized if that happened i’d never be able to find a pay phone anyway!). this helps lighten my purse too.

  5. I use a financial software called Geltbox Money to stay within a budget and reach my goals. So far so good… Cheers

  6. I’older and mentioned to a younger co-worker the idea of developing multiple income streams. Your item #10, Make extra money. Not just to pay off a specific debt, but you should always have something you could develop into a larger project if needed. Pick up a couple of lawn care jobs. You would have some references if you needed extra income from this later. Broker something on the internet. Sell some of your special holiday treats as party trays to co-workers. I’ve developed four income streams. These have all turned out to be things I enjoy doing.

  7. These same things are what I learned to make a solid basis for my lifestyle. The exception is, that I do not agree with never using credit cards. Use them, but pay them off before using again. That way, you keep your credit rating good enough to make purchases like land and vehicles. You do not always have the luxury of waiting to buy a car until you have cash money.
    I make do and it is wonderful to live a frugal life! I have bought and paid off just under 16 acres, built 2 barns and 7 outbuildings, gathered Livestock, amended horrible soil for gardens and planted fruit trees. I could not have accomplished all of that without the use of credit. But when I made debt, I focused on double and triple payments of Principle to get it paid off. For 4 years, I owed nothing. My car blew up and I had to get another. It will be paid off in under 3 years instead of the 5 the contract is for.
    Moral of my story: use credit, but use it wisely.

  8. I agree with you absolutely. In fact, going one step more, I would encourage folks to save up & pay cash for their vehicle. Of course you won’t be driving a brand new car but the savings are huge. My 16 yr old has worked a part-time job since last summer & just paid cash for a 2001 red Mustang, cute as can be. She paid her own registration, licensing & 6 months of insurance. Our mechanic went over it & pronounced it in excellent shape. Start saving now, take someone with you that knows cars, do your research & learn to bargain.

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