Five Steps to Reaching a Debt-Free Lifestyle

Debt free lifestyle

This is a sponsored post written by our friends at, a consumer financial advocate website.

Sometimes we think debt is unavoidable, but we can work toward a debt-free lifestyle by being careful about our finances and implementing these steps:

1. Set realistic financial goals.

You can’t spend what you don’t have, and if you think you can, you’re headed for trouble. Yes, we would all like to live in a big beautiful house, take long exotic vacations, drive the newest fastest car and watch movies at home on a gazillion-inch flat-screen TV. But in setting realistic financial goals, you will not spend yourself into crippling debt, and you’ll learn to be happy with what you can afford while not obsessing over what you can’t. Fantasy is a nice place to dream about. Reality is where you live.

2. Make a budget, and stick to it.

The fact is, you can’t just print money to live on (unless you’re a counterfeiter or the federal government). Figure out what your monthly expenses are and how much is coming in to cover those expenses. Then write down the numbers in a spreadsheet or account book, get everything to balance, and promise yourself that you’re going to follow this financial blueprint, religiously. Sticking to a budget isn’t always easy, but being in debt never is.

3. Avoid late fees by paying your bills on time.

Late fees are simply “stupidity taxes.” Why would you want to give more even money to your utility company, your bank or the department store, for things you know you have to pay for, but didn’t get around to? You would be surprised at how quickly late fees and penalty charges can blow a hole in your budget and plunge you into debt. The amounts may seem small at first, but boy can they multiply.

4. Pay with cash whenever possible.

Credit cards are very convenient, but most people spend less when they have to pay with cash. Credit card debt is insidious and can mount up quickly and quietly. And if you can’t pay with cash, make sure your pay more than the minimum balance on your credit card accounts every month.

5. Build a financial safety net.

Save a percentage of your income in an interest-bearing account. By putting something aside regularly, you will have the ability to borrow from yourself in the event of a job loss or a medical emergency. It just might keep you from going back into debt.

If you have more debt than you can handle, it may be wise to speak to a debt-relief specialist. They can explain your options, which may include debt consolidation or debt settlement. Take whatever steps necessary to finally achieve a debt-free lifestyle. It will be worth the effort.

Photo Credit: PT

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About Carrie

Carrie Smith is the owner and editor of Careful Cents. She helps serious solopreneurs and full-time freelancers earn more money in less time, through systems and financial organization. She's been featured in The Huffington Post, Glamour Magazine, Kiplinger Finance and several other business websites. In May 2013 she quit her full-time accounting job to pursue entrepreneurship and blogging. You can find her on Twitter or Instagram @carefulcents.


  1. I think #1 should be bulleted, bolded, and underlined several times. I don’t think it would be a stretch to say the thing that keeps a lot of people from reaching their goals is not setting ones they can realistically reach. A kind of sub-issue of this is even if you have an endgame in mind set smaller goals that put you on the path so you get that positive reinforcement. Two places I can think of immediately where this has helped is working toward being debt free – my first goal was to get my smallest debt (some furniture) payed off and it just built up from there – which is good because I’ll probably need about a year to finish paying off my last debt (student loan) and I have all this momentum. The other area is weight loss – I set a goal of 5 lbs, then 10, then 5% etc. See the key in both areas is getting myself to behave and any kind of positive reinforcement helps a ton. I’m noticing a pattern that often the person causing a lot of my problems is the same on that I see on my Driver’s License. ;-) Also about #4, I’ve mostly been able to eliminate using credit cards except for 1 that I charge one thing on each month and pay off, unfortunately being a renter means you need a decent FICO score. I have a Check Card and have yet to find a place who refuses to take that instead of a credit card. There is one caveat though, hotels and rental car places will put holds of various amounts on there so obviously make sure you got enough in there to take the hold.

    • The person in the mirror definitely causes problems and sometimes we are are our own worst enemies. Being a fellow renter I totally understand about having to worship the debt score, errr I mean FICO score. It sucks, but it’s the truth. I use a credit card for my small recurring business expenses, to help build my credit. It’s not terrible, but sometimes it’s inconvenient to use multiple cards.

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