Is it Possible to Live a Debt-Free Life? (The Answer is Yes)

If you find yourself in debt, you might be worried that it will be hard to dig yourself out. Debt is a debilitating issue that can seem like a never-ending problem. In fact, 80% of Americans have debt, so you’re not alone. You may be wondering, is it possible to live a debt-free life?

While it is possible to live a debt-free life, if you’re currently in debt, the first order of business is to get out of debt, then you can live within your means and discover the freedom that comes in not having debt. Most people in debt struggle to make headway in eliminating their debt, but it can be done.

What is Debt?

Debt is money owed to a creditor such as a credit card company, mortgage company, or college loan servicer that needs to be repaid to the organization or person that originally lent it.

Debt comes in all shapes and sizes, from an overdraft on your bank account, credit cards, and mortgages, to a friend lending you $10 for lunch when you forgot your wallet.

Almost all of us are in debt in one way or another. Some dept can work to our advantage.

Good Debt vs. Bad Debt

Most of us will need to borrow money at some point in our lives, whether that’s to buy a home or to pay our way through college.

We might not all have ample savings, so credit can help us reach our goals without the limitations of working your way through school (or bootstrapping your business).

Good types of debt are usually mortgages and student loans, and these will have the lowest interest rates.

These can be used wisely to pay for your dreams over time without limiting you. In general, most financial experts recommend avoiding car loans because a car is a depreciating asset.

Making sure that you keep up with these payments can benefit your credit score, which can then help you get a new job or other good loans such as a rental property or going back to school for your master’s degree.

So, what is bed debt?

Bed debt is any debt that is unsecured (a mortgage is secured by the home itself) and does not appreciate. So purchasing goods and services with your credit card is bad. Living within your means is good.

It could also be used to describe purchasing things that quickly lose their value or that don’t help generate income.

There is nothing wrong with buying things when you want them, so long as you can pay for them quickly.

Otherwise, you’ll be stuck with the bill (plus rising interest rates) long after you’ve gotten all of the enjoyment out of it.

Living Debt Free: Six Ways to Remove Debt From Your Life

Now we’ll look at how to live a life free of debt. While not all debt is bad, it can still invoke stress and worry when you’re in it.

Here are six ways that you can eliminate debt from your life altogether:

#1 – Debt-Free Life Way – Build Up Your Savings

If you want to live a life without debt, then you need to work hard on building your emergency fund, or savings. While it can be super difficult to build a healthy savings account, it is more than worth it in the long run, and it will keep you out of debt.

Think about all of those possible unexpected payments you’ll have to make in the next year – car repairs, medical bills, braces for your kids–the list is never-ending.

If you have savings to fall back on when these bills pop up, you won’t be forced into debt to pay for them.

Savings accounts are also essential for big life changes, such as home moves and children’s education.

Even if you’re not thinking about these things yet, starting on your savings now can ensure that you have enough money to cover them in the future.

Bear in mind that living without debt means that you won’t have to worry about the monthly bills that other people spend, leaving you with more to save each month.

#2 – Debt-Free Life Way – Clear Credit Card Transactions as Soon as Possible

Is it Possible to Live a Debt-Free Life? (The Answer is Yes)

Physical currency can be beneficial to some people who want to avoid the temptation of impulse buys.

However, this doesn’t mean that every single person trying to live a debt-free life needs to deal only with cash.

You can use a credit card for an easier life, but make sure that you pay off each purchase on the same day you’ve made it.

This will force you to actually think about how you’re spending your money on a day-to-day basis.

It also eliminates the dreaded monthly bill that credit card users get.

Paying off your credit card purchases as soon as you’ve made them can eliminate the worry surrounding the card, as well as allow you to use them to your advantage thanks to their reward points or cashback incentives.

#3 – Debt-Free Life Way – Buy a Cheap Car

Cars depreciate like there’s no tomorrow.

So, you don’t want to buy a new one outright, even if you did have the savings for it.

Plus, most of us don’t have the money to buy a new car without getting into debt.

The way to avoid these large car payments every month is to purchase a used car for much cheaper.

There is a risk that comes with purchasing a used car, but there is also risk in purchasing at a dealership – and they’ll often try and upsell you as much as possible.

This will get you into much more debt.

Do your research and find a good mechanic to check your new car shortly after purchasing it.

If you don’t trust used cars, public transport is a cheap and easy way to get around, too.

#4 – Debt-Free Life Way – Rent Rather Than Buying a Property

If you’re committed to staying debt-free, a mortgage is a no-go. Mortgages tie you down for decades and will keep you in debt–often for 30 or more years (unless you pay it off early).

Not to mention that if anything goes wrong with your house, you have to pay for it. This could put you in more and more debt. Renting is the way to stay out of debt. But, depending on the area in which you live, purchasing a home can mean a lower monthly payment than what rent would cost, so work with a financial advisor to help you plan for your unique situation.

If you find a fair landlord who doesn’t put their prices sky high, you can save more money to buy a modest home outright.

#5 – Debt-Free Life Way – Utilize Community College

Community college can save you thousands of dollars and keep you from having to take out a student loan.

You can study here for a few years while saving before transferring to a more prestigious university.

Community college is also a great way to apply for scholarships and grants, which can help you massively when you get to your new school.

#6 – Debt-Free Life Way – Buy Only What You Need

Finally, this one may seem simple, but the key to living a debt-free life is to live within your means.

Consider whether you actually need what you’re about to buy.

It’s the worst news for impulse buyers, we know! But it will really help you avoid debt.

Consider the 30-day rule when thinking of purchasing items: If you plan to spend money on something, hold off for 30 days and evaluate if you really need it after this month-long period to cool down and think about it.


We hope that our article has given you some ideas on how to stick to a debt-free life. While it might be tempting to borrow just a little, it is completely manageable (and worth it) to live without debt.

Make sure you live within your means, save money any way you can, and pay off your credit card as soon as you make a purchase.

By Lauren Hunter

I'm Lauren, and I've been on a journey to earn money and save money for most of my life. As the editor-in-chief of, and as a freelance writer, coach, musician, and entrepreneur, I love looking for new ways to make money and better ways to keep it. I'm also a wife and work-at-home mom (WAHM) to four kids, so budgeting is my middle name. I'm excited to be on this money journey with you!