16 Habits to Develop if You’re Serious About Paying off Debt

what to do when you're serious about paying off debt


The German root word for “debt” is the same as for “guilt.” 

-Professor Marcel Fratzscher


Debt is a common fact of life in America today.

According to a recent study, 8 out of 10 Americans are in debt – averaging about $67,900 per person.

And that study also revealed that Americans feel conflicted about their debt.

70% said while they’d rather not have the debt, they saw it as necessary for creating a better future.

These conflicting feelings reflect the fact that some debt can be used as a useful financial tool (like buying a home).

While others, like “investing” in a new car – can leave you spending years of your life making monthly payments on something that loses 60% of its value during the first 5 years.

And when you realize exactly how much interest is going to cost you on a car that sits idle 90% of the time, it can leave you wondering:

What the hell was I thinking?

But if there’s one thing I’ve learned, it’s this:

The decision to get out of debt is life changing.

All that weight lifted off your shoulders. Saying goodbye to the never-ending payments. 

Being financially free.

You have a lot to look forward to. So let’s get started. 

(This post may contain affiliate links. Check out my full disclosure policy here!)

Habits to Develop When You’re Serious About Paying Off Debt

1. The Old Way of Life Wasn’t Working

Habits to develop if you want to get out of debt


“Every time you borrow money, you’re robbing your future self.”

-Nathan W. Morris


You don’t have to be homeless to be broke. 

Broke is only being able to afford minimum payments on everything.

Broke is being in debt up to your eyeballs.

Broke is buying a brand-new car because you can “afford” the monthly payments but not having $1,000 in your emergency fund.

The first step is recognizing your old life for what it was:


When you’re debt free, you’re using today’s dollars to pay for today’s expenses- not today’s dollars to pay for last years debt.

So while changing your spending habits can seem hard at first, the realization is that your quality of life is richer without debt. 

Related:16 Mistakes People Make While Paying off Debt

2. Create Boundaries for Yourself

Habits to develop if you want to get out of debt

Here’s the thing:

We’ve made it far too easy on ourselves to spend money.

We keep our credit card information autosaved online.

We enable one-click ordering features for online retailers.

We sign up for newsletters to get the latest deals sent straight to our inbox.

We get used to the convenience of using plastic instead of cash. 

But when you’re trying to get out of debt for good, here’s the bottom line:

You have to spend less or earn more.

(Or both, if you’re attacking your debt with gazelle intensity)

So it’s your job to figure out what your weaknesses are and draw clear lines in the sand.

For me, that meant developing a cash system because I was a little too swipe happy. 

For you, that might mean creating a budget and sticking to it.

Which brings me to the next point:

3. Start a Budget

Habits to develop if you want to get out of debt


“A budget is telling your money where to go instead of wondering where it went.”

-John Maxwell


Start a budget, and stick to it.

I think we’ve all been guilty of creating a budget with the best of intentions, only to not to see it all the way through.

But a budget is a great tool for making the best use of your income.

You’ll find leaks in your spending and you can put your debt payoff plan into action.

Here are the recommended budgeting percentages:

  • Housing: 25% – 30%
  • Utilities: 5% – 10%
  • Food:  10 % – 15%
  • Transportation: 10% 
  • Health: 5% -10%
  • Insurance: 10% – 25%
  • Personal: 5% – 10%
  • Saving: 10% – 15%
  • Miscellaneous: 5-10%

Yours might vary, but you want to make sure you aren’t way off base on one or more of these areas.

Pick a debt pay off method and let your budget be your roadmap for financial success.

I recommend the debt snowball or debt avalanche payoff methods. If you need help deciding, then read this:

Debt Snowball vs. Debt Avalanche – Which Debt Payoff Method is Right for you?

4. Save $1,000 for an Emergency Fund

Habits to develop if you want to get out of debt

Sh-t happens.

That’s life, and that’s what your emergency fund is for.

So a lot of what I talk about is similar to what Dave Ramsey teaches. Why? Because his principles work. 

And the guy has helped me and thousands of people get out of debt and live the life they deserve. 

So the first step in his baby step process is to save $1,000 for emergencies.

Because if you don’t set aside money for emergencies, you can easily get hit with – and caught up in – even more debt.

Here’s the deal:

47% of Americans don’t even have enough money to cover a $400 emergency.

And when you don’t have enough money to cover those unexpected expenses, then you’re forced to borrow money.

And neither of those options are very good.


“Money never made a man happy yet, nor will it. The more a man has, the more he wants. Instead of filling a vacuum, it makes one.”

-Benjamin Franklin


Related:13 Money Decisions You’ll Regret Later

5. Start Saving While You Spend

Habits to develop if you want to get out of debt

There are things you still have to buy to live. And since you’re buying things you’d normally get anyway, you might as well save money.

For you, this might mean shopping around your grocery stores flyer.

Or buying a FoodSaver to preserve your food. 

For me, I love using a cash back program like Ebates.

These days, there are several things I only buy online because that’s how I get the best deal.

And when I combine that with Ebates, I know I’m saving the most money.

I’m sure you’ve probably seen the commercials for Ebates, but in case you haven’t, here’s what you do:

You sign up for an Ebates account (it’s free) and use the search bar to find the retailer you want to shop with.

As you make purchases you’ll get cash back.

Then, once you accumulate your earnings ($5.01 is the minimum payout) – Ebates will send you a check or deposit that money into your PayPal.

Note: the Ebates link above gives you a $10 bonus for signing up and shopping.

6. Use the 24 Hour Rule

Habits to develop if you want to get out of debt

“Let me think about it” is one of the best things you can say when it comes to money.

If you hit the pause button for at least 24-hours on spending impulses, it allows the rational side of your brain to think of more practical ways to spend that money.

Like getting out of debt or contributing to savings.

Also, beware of “deals” that are only good for a set amount of time – 20 minutes, 1 hour, or even 24 hours.

Marketers are smart. They use time limits to get you locked in quickly before you have time to think about it.

Learn to develop this debt-free habit, and watch as you slowly take back control of your financial life. 


“Too many people spend money they earned..to buy things they don’t want..to impress people that they don’t like.”

-Will Rogers


Related:The Power of Being Broke and What You Learn From it

7. Live Within Your Means

Habits to develop if you want to get out of debt

Why is living within your means so hard to do?

The idea is simple:

Spend less than you make.

But when you factor in credit cards and loans as spending instruments, it’s easy to spend more money than you actually earn.

A car loan here, a vacation put on credit card there – and you’re left with a mess.

Create your budget, know exactly what you have to spend each month – and spend less.

It may mean trading in that nice car for something more reasonable.

Or downsizing to a home that you can actually afford.

Or skipping the family vacay this year because you’re gazelle intense about getting this debt paid off once and for all.

And guess what?

Living within your means is so much more than spending less than you earn.

It means taking full responsibility of your money.

It means choosing where your money goes instead of keeping up with the Joneses (because they’re broke, too).

It means managing your money instead of letting it manage you.


“Don’t tell me what you value, show me your budget, and I’ll tell you what you value.”


9. Dine In

Habits to develop if you want to get out of debt

…at home.

Or like Dave Ramsey says, “Don’t step foot into a restaurant unless you’re working there.”

Eating out is expensive. At $7 a meal, if you eat out once a day, you’re spending $210/month to do so.

Is it worth it? 

Related: 20 Warning Signs You’re Living Beyond Your Means

10. Use Cash as Much as Possible

Habits to develop if you want to get out of debt

When you swipe your card and get it back, it doesn’t quite sink in as much as turning over your hard earned dollars.

Using cash creates a loss-type feeling in your mind. That feeling keeps you more accountable for your spending.

A great reason to switch to a cash system is because you can’t go into debt if you don’t borrow.

And when you take exactly how much money you need with you, you won’t overspend because you simply can’t.

11. Give Up What You Don’t Need

Habits to develop if you want to get out of debt


“Small leaks will sink a great ship.”

-Benjamin Franklin


Little by little, small expenses add up.

And those small expenses destroy your monthly budget.

So take a look at the budget you’ve created, and see if you can:

Cancel unused gym memberships.

Get rid of the “free” trials that are so easy to forget to cancel.

Cancel unnecessary subscription box services.

Cut the cable and switch to Amazon Instant Video instead.

What’s cluttering up your financial life?

Take the time to go through your receipts and credit card statements to figure out how to trim the fat.

And avoid the tendency to call something a need when it’s really just a want

12. Start Saving for Major Purchases

Habits to develop if you want to get out of debt

The key to getting out of debt and staying there really just comes down to discipline.

Discipline is the key to taking your financial life back.

Save up for a car.

Set aside money for a down payment on a home.

Save up the money for home repairs.

Nobody looks back and says, “I saved too much money.”

Or, “I shouldn’t have saved that money.”

So do it the right way, and you’ll be so glad you did.

13. Measure Your Debt

Habits to develop if you want to get out of debt


“I love money. I bought some pretty good stuff. Got me a $300 pair of socks. Got a fur sink. An electric dog polisher. A gasoline powered turtleneck sweater. And, of course, I bought some dumb stuff, too.”

-Steve Martin


After I graduated from college, I got into the habit of calculating the cost of debt. It was a great tool for helping me stay on the right track.

Here’s what I mean:

Figure out how much your debt costs in interest each year, then divide it by 365.

How much does your debt cost you?

$10 each day? $15? $20?

Interest rates are tricky, and they’re what ends up costing us so much in the long run. 

It doesn’t hurt to transfer your balances to a lower-rate card or use a company like SoFi to lower your interest rate for you.

Someone first told me about SoFi in college (when we were talking about student loan debt).

And I’m so glad they did.

Just by lowering your interest rate, you’ll save thousands over the course of your loan. 

So just because you can’t afford to pay off the balance completely, don’t settle for a high APR.

(If you need more info on SoFi, click here to read my review)

Note: The Sofi link above gives you a $100 welcome bonus.

14. Find Like Minded Friends

Habits to develop if you want to get out of debt

Not everyone is going to be on board with you getting out of debt.

They might not understand why you’d choose to trade in your car for something more affordable.

Or they might give you a hard time about not going out to eat.

Or worse, they see your success and want to borrow money from you.

So instead, try to make friends with others who are financially responsible like you.

Find friends that will lift you up and support you in your debt free journey.

15. Set Goals and Track Them

Habits to develop if you want to get out of debt


“The man at the top of the mountain didn’t fall there.”

-Vince Lombardi


Several years ago, Forbes did a research study about goal-setting at Harvard University.

They asked students if they had set specific, written goals, as well as if they’d made clear plans to achieve them.

Here were the results:

  • 3% had written goals and plans to achieve them
  • 13% had goals in their heads but hadn’t written them down
  • 84% had no goals at all

After 10 years, the same group of students were interviewed again. 

The results were surprising:

The 13% of the class who had goals, but didn’t write them down, earned twice the amount of the 84% who had no goals. 

And the 3% who had written goals were earning, on average, 10 times MORE than the other 97% of the class combined.

I use this example to show the power of goal setting and how it transforms your life.

After all, the saying goes: a goal properly set is halfway reached.

Related: How to Save Money When You’re Broke

16. Hustle

Habits to develop if you want to get out of debt

Do you remember me saying to spend less or earn more?

Ideally, you’d do both.

John Kapetaneas, a journalist who paid of $111,000 of student loans and credit card debt in 24 months says his secret to success was “embracing the suck.”

For John, that meant buckling down and saying yes to as many freelance projects as he could handle.

It wasn’t fun, but it worked.

“I capitalized, over the course of two years, on every opportunity I could possibly find to work,” he said.

“That meant overnight shifts, holidays, weekends — every possible shift that I could pick up as a freelancer, I took.”

And if there’s one thing being broke teaches you, it’s how to hustle.

Plasma donations, cleaning houses, babysitting, and selling stuff you don’t need – show you that earning money is sometimes about thinking outside of the box.

So if you need some new ideas to earn more money, check out my article: How I Made $5,500 From Home Last Month

And as always, thanks for reading.

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Habits to develop when paying off debt

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Hi! I'm Adele

I'm happy you're here - because we're a lot alike.

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