Some individuals and families on high incomes struggle to pay off debts, while those on lower incomes can chip down on debts quite easily and eventually become debt-free. Now, we gotta ask: how does that happen?
Everyone is unique but one common reason is that some people are in the habit of overspending. While their disposable income is higher than the Australian average, they are likely to spend beyond their weekly budget.
Debt-free families follow different traits. Characteristics show a strong commitment to the debt-free lifestyle and maintain it for the rest of their lives.
Today we’re going to examine the typical behaviours we see in people are currently or on the pathway towards a 100% debt-free lifestyle.
Traits of debt-free families in Australia
1. These families lack materialism
People who are materialistic just love “stuff” – whether physical or one-time experiences. Easy access to lines of credit allows them to borrow up to their maximum to pay for holidays, new cars off the showroom floor and a house bigger than what they need.
On the other hand, someone who is determined to completely get out of debt knows that no amount of “stuff” can buy happiness. They’re not willing to fall into financial traps of instant gratification. Instead, they don’t want to buy happiness with money they don’t yet have.
2. They are ambitious towards their goals
Many people are surprised to see that, while they are chipping away at their debt, these same people are actually driven to achieve goals. They do want to reach a place where they can indeed enjoy the fruits of their labour, but without the overhanging burden that goes with it.
Debt-free families set goals on the dinner table that are attainable and realistic for the income they have. You’ll often find their plans on the kitchen fridge with input from their children. These aren’t just lofty dreams but is backed up with a strategy to get them to their financial destination.
3. These families have self-control
Instead of opportunistic shopping at the checkout, debt-free families across Australia opt to stick to their financial plans. It’s often difficult for them to bend or give in to temptations. In other words, you can discount a product up to 90% yet they’ll still walk right on past.
This self-control stacks on their existing traits of waiting, working and saving. These families know that buying stuff in the heat of the moment probably won’t make them feel better or erase their problems. Impulse purchases are the least-likeliest purchase to be made by someone with proper control over their spending habits.
4. You won’t see them buying into societies norms
For these Aussie debt-free families, they realize the truth: Debt isn’t a tool to get ahead. Claims such as “Always have a credit card for a rainy day” or “You must buy a car if it comes with cheap finance” isn’t something they’ll subscribe to, with the exception of HELP-debt repayments. The only norm that they’ll be into is “We are debt-free” and something that truly should be commended, as opposed to that luxury car on Instagram that will depreciate in value.
They know that car loans and credit cards aren’t needed to live peacefully in Australia. They’ll be more than happy to buy an affordable 2nd-hand car on the corner lot for cash, as opposed to that immaculate car on the dealership floor. For them, debt is like the rubbish that hasn’t been taken out for 3 days – they just NEED to get rid of it NOW.
5. Sacrifices are apart of everyday life
These Australian families know that eating out every night just isn’t sustainable. Instead, they opt to avoid expensive experiences in lieu for maintaining their debt-free lifestyle or working towards attaining it.
Do you want to know the best part? Once their debt is gone, those experiences can come back! These sacrifices only need to be temporary, since the future will bring the room in the weekly shopping budget for lavish experiences. They can do this without slamming it on the credit card and merely hoping they’ll have enough to clear it at the end of the month.
6. They give little care about the opinions of others
These people who strive for the debt-free lifestyle won’t really care what others think of them. They might be driving a used car, cook mostly at home and fly economy instead of premium classes, but they can sleep better at nighttime. In fact, you’ll see them very rarely on social media.
Keeping up with the Joneses has become a normal part of Australia’s culture, but why? Because we’ve followed the western norms of excessive spending habits in order to build a false narrative of success and achievement. Debt-free families care little about this, with their confidence built from knocking down their debts and living on cash.
7. These families are bargain-hungry
While not to be confused with overspenders who generally impulse buy, these debt-free families choose to use coupons, discounts and savings at their disposal. You’ll see them scour the internet for ways to get the best price for their products or even trawling Gumtree Australia for a used version which could save them hundreds.
For them, every dollar saved is a dollar made, tax-free! You’ll see them researching online for products that actually offer the best value for money, as opposed to the cheapest, including product life-cycles. These families are in all on their plan and bargain-hunting is often the starting point, and for many, a way they were already raised.
8. Side hustles are their pocket money
While they will have at least one full-time household income, these families have taken to the gig economy like a fat kid on a cupcake. Sites like Airtasker, Uber and Upwork offer them opportunities that 15 years ago didn’t really exist. You’ll find them sacrificing some of their weekends and evenings to earn additional bucks.
They’ll find every way to make extra dollars as they know how much this all counts. Even if it’s additional taxable income, they know they’ll be able to pay down their debts faster. Again, this is a temporary measure which they use to eliminate themselves from drowning from monthly repayments. At the very least, can help them afford luxuries without the burdens.
9. They’ve used debt consolidation to their advantage
During their journey towards a 100% debt-free lifestyle, they would have seen the opportunities for debt consolidation. These offers include a 0% credit card balance transfer or grouping multiple debts like personal loans and car loans together as one for reduced monthly repayments. Some people use these loans to then take out additional finance, but not these families!
Using debt consolidation allows them to potentially save thousands on interest repayments had they merely paid back their original debts the normal way. Once the new loan is established, their motivation is to knock off these liabilities faster with zero motivation to take out additional finance given the lowered interest rate they’ll likely receive.
10. They’re eager to learn more
These are the types to read financial books by people like Scott Pape. They want to learn more about how they can reduce or eliminate their debts completely, but without massive sacrifices to their lives. After all, they do want to have some comforts like fresh food and a reliable car to drive.
You’ll also see them consume YouTube content and spend time in Facebook groups. They’ll praise people who share success stories about how they got out of debt and love the strong community comradery. Learning more about debt reduction (without spending a fortune) is a normal trait for these people.
Keen to join thousands of Aussie debt-free people? It’s available!
Have a closer look at debt: It’s something that holds you back every single month, like a recurring burden that you don’t need. Like that person in school that you just didn’t like.
Essentially, you want to create a sense of patience, live simply and make some sacrifices. That’s the essence of debt-free families who live in Australia. They don’t need that new iPhone that just came out.
It’s not easy, nor is it fast. Often it’s not even that exciting either, but they knew this. It takes work and if you have what it takes, we’d encourage you to do this. After years of work, you’ll look back and realize the vast progress that you’ve made, all from a decision that you started today.
Learn how to take control of your money before it takes control of you. You’ll be more confident and on the road towards financial freedom, through the knowledge and wisdom of others who have walked the path before.