I used to believe that being in debt was part of normal life. Everyone I knew had debt, used credit cards, and financed cars. We lived that “normal” life until my husband got laid-off during the 2008 Recession. Having credit card debt, car loans, and student loans to pay on our newly reduced income was not fun! If you are ready for a change, these are five habits to change to get out of debt.
If we did it on one income, two babies, and a country in financial disaster, my friend, you can do it too! Let’s be clear. It wasn’t fun or easy. It was a long, depressing, and stressful time in our life and relationship. However, we came out of our recession, stronger and wiser. Most importantly, committed to making choices to live a debt-free lifestyle.
Today we are not totally out of debt, but we are getting there. We are devoted to buying everything we want and need, from vacations to new vehicles and groceries, with cash. We have had to say no to many things, especially unplanned trips or activities with friends and family. But at the end of the day not being broke feels a whole lot better than going on vacation pretending to have the money for it, and actually charging it a credit card.
So if you are ready to change the course of your finances and life, these are the five habits you need to change to get out of debt

GET RID OF FINANCIAL STRESS!
The practice of Smart Spending & Intentional Living has transformed my life. Get started with my free financial goal-setting worksheets and say goodbye to money worries!

1. Change Your Mindset
To pursue a debt-free lifestyle, you must change your believes about money. I used to think that debt was a normal part of life. That you needed a credit card to survive. That good credit makes you a more worthy person. That credit card points and miles are actually great perks. But in reality, all of that is a bunch of BS.
You must realize that everybody else wants your money, and they will tell you or make you believe whatever it takes to have it. And thanks to marketing a lot of companies have done a fantastic job to get us in debt. But if you are seeking for information to get out of debt, I guess that you also realize that to move in that direction, you need to change your mindset. Having this realization is a stepping stone because once you change your mindset, you can change your behavior.
Commit to No More Debt
In our case, my husband and I changed our mindset about debt because we had no option! We had too many payments left at the end of the money. I was working to pretty much pay debt, and I got sick of it. That is when I decided that debt is not an option for us ever again. That is a huge mindset change.
I totally removed the concept of getting in debt from my mind. I looked at our expenses and decided that we needed to cut out a lot of things to live a lifestyle that was congruent with our new reduced income. As incredible as it may sound for a recovering shopping aficionado like me, I cut out all shopping. We also stopped eating out and quit using credit cards. Not surprisingly, we survived, and in the process saved a lot of money.
2. Get New Information
When you change your mindset, it is easier to change your habits. Because you are not repeating the same behaviors that got you in debt. But it is hard to embrace new habits without getting new information. For example, 15 years ago, when we all used Blackberry phones, I was delighted with mine. Then, the iPhone rolled out.
I resisted the switch first because I didn’t understand how the touch screen worked. Not to mention that I have very fat thumbs and wasn’t able to type on the keyboard! But once I started playing around with it, and using my index fingers to type, I actually became a fan. Using an iPhone became a habit. Today, I wouldn’t be a functional adult without it!
We cannot change our habits automatically, but if we gather new information, we can do it gradually. So, read books on the topic of becoming debt-free, listen to podcasts, and also, get on a budget. Getting new information will open your mind to the possibilities. Remember, you cannot expect a different result, a.k.a., get out of debt, when you don’t do anything differently. It sounds like common sense, but I see people who keep getting into debt and genuinely think that somehow one day they will be wealthier.

3. Stop Comparing Yourself to Others
When you pay too much attention to what other people have, you lose perspective of what you do have. Comparing yourself to your neighbors or coworkers will only make you want to have more. As a result, you will continue to live in the never-ending cycle of debt.
You have to stop following what everybody else is doing because you know and the statistics prove that most people are broke. So, just because you get offered a 0% interest credit card, doesn’t mean you have to take it. It doesn’t matter what other people look like, you don’t know what is really going on behind closed doors.
Rich vs. Broke
Realize that when it comes to appearances, there are two kinds of people. There’s the really rich, wealthy, with tons of money in the bank kind of folks who really can afford purchases. And there is also the really broke people who pretend to be rich and can’t really afford their purchases. I am talking about those driving a leased Mercedes Benz having no money in the bank. It looks like they are well off, but their facade is usually financed through loans, credit cards, home equity lines of credit, personal loans, etc.
If you often find yourself comparing to others, I need to ask you to take a pause. Just think. There is a chance that they are wealthy and can afford whatever they have. But, there is a higher possibility that they are broke pretending to be living the good life. In America, 80 percent of people live paycheck-to-paycheck, regardless of appearances. Move on!
4. Get on a Budget
So, you have changed your mindset, you have gotten new information, and you stopped comparing yourself to John, your coworker. It is now time to start prioritizing expenses and saving. To do this, you need to get on a budget. If you don’t know how to do that, don’t worry. I have you covered with my step-by-step tutorial. You can download a free copy of The Budget Pad below to get on track.
GOAL SETTING WORKBOOK
Set and keep track of your money goals with our FREE financial goal-setting workbook.
So, besides budgeting your everyday expenses, you also need to get into the habit of planning for big and future purchases. That includes vacations, weddings, college, cars, and anything that requires a significant expense that is not covered in your monthly budget. And yes, some times you will have to plan years ahead of time to be able to afford the purchase in cash.
Plan, Prioritize, and Save Money
My husband and I have a monthly savings fund that we use to put money aside for vacations, car purchases, significant repairs, etc. This fund is beside our emergency fund. Being able to save for big purchases requires discipline, so I recommend that you put that money out of sight in a savings account to avoid the temptation of spending it on something else

5. Get Rid of Your Credit Cards
The final habit you need to embrace to get out of debt is to cut your credit cards. Why is this so important? Because as long as you have them, they will enable you to get in debt. Many people say they only have them “in case of emergency.” Guess what, using credit cards to pay for emergencies is only making the matter worse. Instead, by not having the option of using a credit card, you will be forced to budget, reduce your expenses, and save money for emergencies.
The way to truly commit to living a cash-only lifestyle is to get rid of your credit cards and stop borrowing money. So, put the scissors, cut the cards now, and if they do not have a balance, call to cancel them. I haven’t had one for many years. I use my debit card to do everything others do with credit cards, and I have survived just fine.
In Conclusion: 5 Habits to Change to Get Out of Debt
If your debt and financial situation are stressing you, depressing you, and keeping you up at night, it is time to embrace new financial habits. Change your mindset about money and living in debt. Find new information. Stop comparing yourself to others. Start budgeting and prioritizing expenses. And, last but not least, cut today those credit cards.
Changing the habits that got you into debt is the only way to make progress. Remember, you cannot do the same things over and over and expect different results. Once you embrace these five habits, you will actually find that getting out of debt is doable. To get a step-by-step strategy to become debt-free, I recommend you to implement the Debt Snowball Method.
If you have any questions feel free to drop me a line in the comments section at the bottom of this post. I answer all of them personally. And if you enjoyed this article please share it on social or pin it!
Related Articles To Getting Out Of Debt
- The Debt Snowball Method
- 10 Rules Financially Smart Women Must Live By To Win With Money
- Ready to Get Your Money Life Together?
- 5 Necessary steps to get control of your finances
- Podcast:
Do You Want To Improve Your Finances On The Go?

SUBSCRIBE TO MY SMART FINANCES PODCAST
& JUMP-START YOUR JOURNEY TO FINANCIAL FREEDOM!
Pin it!
