We live in a world where car payments, credit card bills, and other forms of consumer debt are just assumed to be facts of life — as inevitable as death, taxes, or Kanye West interrupting a music awards show. Anyone lucky or disciplined enough to buck the trend gets little exposure in media. How they did it — and the benefits they enjoy — go largely undiscussed. Maybe it's time to explore the lifestyles of the debt-free. Here are 10 things people without debt do.

Part 1


They Wait

When it comes to spending money, patience really is a virtue. Debt-free people achieve their rare status by keeping their needs in check and carefully considering their wants. Then, they save their money, wait for great deals, and shop around for amazing second-hand bargains.


They Keep Their Egos in Check

Fat egos usually mean skinny wallets. Credit-fueled conspicuous consumption keeps more households in the red than mortgages and college loans combined. Those who are debt-free try to keep their egos separate from the material stuff they own and rest comfortably in the knowledge that true luxury is freedom from debt servitude.


They Spend (When the Deal Is Right)

Our frugal friends and neighbors get a bad rap. They're usually dubbed "tightwads" and quickly dismissed as a fringe group out of touch with reality. But they're not afraid to spend; they're simply selective about what and when they buy.


They Pay Cash

People who are debt-free know why cash is still king: When you spend it you feel it; it's impossible to spend more cash than you actually have; and when you're negotiating on price, the green stuff gets attention.


They Negotiate

And while we're on the topic of negotiating, let's get something straight: The price of almost everything is negotiable. The debt-free realize this. They've learned the rules of negotiation and haggle on the price of everything from cars to cable TV. After all, paying retail and being debt-free don't mix.


They Get Great Interest Rates

When the debt-free choose to take on debt strategically, they tend to benefit from lower interest rates. Thanks to a history of responsible credit use, low balance-to-limit ratios, and a modest debt-to-income ratio, they have strong FICO scores.


They Avoid Incremental Expenses

If you haven't noticed, marketers are getting more reluctant to share actual prices with consumers. Instead, they frame big expenses in more palatable monthly terms. You can get in that $29,000 new car for only $203 a month; that new cell phone will cost you a mere $18 a month — you get the idea. But, debt-free folks know that big expenses lurk behind those tiny payments, and they understand how dozens of small cuts can quickly bleed a budget.


They Enjoy More Freedom

High levels of long-term consumer debt limit our choices in life. If a dozen creditors can each take a slice of your income, there's less left for you. That means less choice about what you'll be doing next week or next year (hint: you'll be working). But others know the freedom of a debt-free life. They try to keep as much of their income as possible and invest in things that generate wealth, expand their opportunities, and ultimately reduce the number of years they'll have to work.


They Expect the Unexpected

I'll be the first to admit: I'm not an optimist. When it comes to the economy, my work, and the prices of things in relation to income growth, I'm a Debbie Doubter, if not a full-blown Debbie Downer. And I'm in good company. The debt-free have a financial emergency plan and even in the boom times, buckle up for the bust.


They Sleep Well

But far from a sense of powerlessness, keeping a low financial profile, being prepared for emergencies, and saving for the future builds a deep sense of security. When the debt-free drift off to sleep, they're not worried about credit card balance shuffling, how to delay payments to the very last second, or if their car might get repossessed in the dark of night. They sleep well knowing that no one has a claim on what they earn tomorrow.


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