Smart Cents with Shaye

8 Habits of the Debt-Free: Secrets to Financial Freedom

Have you ever wondered how the financially stable continue to thrive? Well, here are 8 secrets to financial freedom.

• Regularly Review Finances: They consistently review their budgets, track expenses, and adjust as needed. Staying in tune with their finances ensures they stay on track with their goals.
• Diversify Income Streams: Many financially stable people seek additional income streams, whether through a side hustle, investments, or passive income sources.
• Set Financial Goals: They regularly set goals which is all about creating a roadmap for their financial journey. Goals provide clarity and direction, giving them a sense of purpose and something to work toward.
• Live below their means: They live on less than they make so, they can have money to save and invest. Debt-free people focus on appreciating what they already have instead of constantly chasing the latest trends or comparing themselves to others.
• Avoid Lifestyle Inflation: As income increases, they resist the urge to upgrade their lifestyle significantly. Instead, they channel extra income toward savings, investments, or paying down other obligations.
• Plan for the Unexpected: They will prioritize building an emergency fund to handle unplanned expenses without falling back on credit.
• Practice Contentment: Debt-free individuals focus on appreciating what they already have instead of constantly chasing the latest trends or comparing themselves to others.
• They Continue to Educate Themselves: They read financial books and listen to podcasts. They study investing and how to better themselves. They never stop growing their knowledge.

If you want to become debt free in the future, you might want to start with some of these tips.  The more you surround yourself with people who are financially where you want to be or are headed in the same direction, the easier it is to stay motivated and learn. You may not have anyone close to you that is debt-free or going in the same direction as you. This is where following people on social media, reading books from financial coaches or watching YouTube videos comes in handy.

If you would like more information on how to take charge of your finances in the upcoming new year read my blog How to Take Charge of Your Finances in 2025.