Debt is a heavy burden

Why not stay free of it?

Credit: Renjith Krishnan


For as long as money has been around, people have been getting into debt--and for some, very deep debt.  In today's world of credit cards, getting into debt is even easier.  Why?  Because many banks and financial institutions are handing them out to everybody!  And even if you don't have money, a credit card will give you purchasing power--regardless of one's ability to pay.

With this in mind, my goal is to help you understand a method I use to keep me from getting into deep debt.  My technique requires a change in habit; and as most people know, habits are hard to change.  However, people do say that a habit can be broken if one practices a new way of doing things for at least 30 days.

That said, my approach to keeping debt free uses the following basic principles:

  • Buy only things you need or can afford
  • Save money
  • If you use credit card, pay it off by statement due date

Buy only things you need and can afford

In life, you only need the following things to survive:

  • Shelter
  • Food & water
  • Family and friends

Anything beyond this is extra.

Let's start with "shelter".  Everyone needs shelter, but not everyone can buy a house.  Maybe for your situation, you can afford to rent.  Later on, when your financial situation improves due to a better paying job, you can buy a house; which in some cases can provide tax shelter for your hard-earned money.

Next is food and water.  When you see things at the store or market, you should only buy things you need and can afford.  I say "things you need and can afford" because sometimes, you need something, but can't afford it.  For example, everyone needs food.  Some food are more expensive than others.  At a market, you might see a nice steak, but it is too expensive.  You certainly need food, but the steak is too expensive, and so you opt for a less expensive food--maybe spaghetti; maybe that's what you can afford.  Spaghetti can certainly fill you up.  As for water, tap water will do if you can't afford bottled water.

Family and friends is an essential part of life.  Without them, life isn't worth living.  Humans are just social people and need other humans to interact with.  It generally doesn't cost any money to interact with your family and friends.

So as you can see, there isn't much in terms costs for the bare necessities to living.  This should leave a lot of room to save.

Dollars and coins in nest
Credit: Renjith Krishnan

Save Money

When you only spend on things you need and can afford, you should put away most of your money to savings and some investments (for long-term growth).  Saving money will allow you to have spending buffer should an emergency requiring money occur; and investing some of your money for long term growth will allow you to earn money from your the money you were able to save.

Between your savings and recurring income, and your new spending habit, you can keep from getting into debt.  Thus, it is crucial that you practice a good habit of saving money when you can as it goes hand in hand with spending only on things you need and can afford.

Credit Cards(45460)

Pay credit cards off by statement due date

Some people use cash 100% of the time to stay debt free.  I, however, use credit cards 100% of the time.  I use them for the following benefits:

  • Protection from mugging.   If you ever get mugged, they don't get money, only your credit cards.  You can prevent the muggers from using your card simply by making a call to your credit card company informing them of your situation.
  • Free Loan for about a month.  Provided you pay off the entire credit card statement before it is due, using credit cards is like borrowing money for 0% interest!  No bank or lending institution has a deal as sweet as this!
  • Purchase online.  You can buy anything online with a credit card.
  • Purchase at almost all stores or businesses.  You can buy anything with a credit card; money in your wallet is no longer a necessity.
  • Earn mileage.  If you use your credit card everywhere, you can easily earn frequent flyers mileage for every dollar you spend.  You can use this mileage to get free flights when you need it.

The trick in using credit cards is to pay them off before the credit card bill is due.  This requires strong self-control as missing one payment will cost you a big chunk of change since credit card finance fees are generally very high!


In order to stay debt free, you can follow my approach.

  • Spend only on things you need and can afford, thus allowing you to save money.
  • Save money.  When you spend on only things you need and can afford, you can put money in the bank and invest some for long term growth.
  • Pay off your credit card bills by due date.  You can only do this  if you save money, since you'll need money in the bank to pay your credit card bills; otherwise you go into deeper debt.

I've used the above approach my entire life, and it has worked for me.  I'm sure it can work for you too.

Please leave me a comment or contact me directly if you wish to share how you stay debt free or if this article has been useful to you.