Why People Avoid Being in Debt 

Getting out of debt can be hard work. It requires changing your spending habits, budgeting and learning to save. 

Debt-free people don’t buy into society’s norms that credit cards are necessary, you need to borrow money for college and that you should have a car payment. They also understand that being in debt can damage their physical health. 

1. They don’t want to pay interest 

Debt is a part of life in the United States, but it doesn’t have to be. Unnecessary debt can hurt your credit score, limit your investment options and hinder your financial goals. Fortunately, you can avoid unnecessary debt by staying away from credit cards and making all purchases with cash. 

However, it’s important to understand the different types of debt and why they can be good or bad for you. For example, mortgage loans can be good debt because they allow you to purchase appreciating assets like homes and cars. On the other hand, credit card debt can be bad because interest payments can quickly eat away at your wealth and prevent you from reaching your financial goals. A bankruptcy attorney in York, PA might tell you that by avoiding unnecessary debt and following a smart budgeting strategy, you can minimize the costs of interest and save money for future investments. Plus, once you’re debt-free, you can finally start hitting up the drive-thru for that half-caf, honey lavender latte with extra foam. 

2. They don’t want to pay for late fees 

Debt can cause stress, which may affect your mental health. According to a survey by debt relief company National Debt Relief, people lose about 200 hours of sleep a year due to financial stress. Additionally, debt may prevent you from saving money. 

A debt free lifestyle is possible, but it requires change. This means tracking your expenses, creating a budget, prioritizing your debts and saving for emergencies and retirement. It also means stopping unnecessary spending, like putting UberEats on your credit card when your paycheck isn’t enough. 

Instead of using your credit cards, only carry them for bonafide emergencies and pay for everything else with cash. This will eliminate impulse buying and help you stay out of debt. Leslie H. Tayne, an attorney who specializes in debt cases, tells Kiplinger many of her clients get into trouble by borrowing to buy things their budget can’t afford—from extracurricular activities to horses and college tuition. Those purchases might bring short-term pleasure, but they’ll take a big chunk out of your savings. 

3. They don’t want to pay for penalties. 

Whether it’s late fees or over-the-credit-limit fees, being in debt comes with its own pitfalls. These can add up quickly and take money away from your debt payoff efforts, resulting in more time in which you’re paying interest and fewer dollars being applied to your principal.

Moreover, many people find themselves in debt because they’re trying to keep up with the Joneses. That is, they’re following the example set by their friends or neighbors, who may have a nice car and house, but they also have massive credit card debt and expensive streaming subscriptions. 

Avoiding unnecessary debt is a big challenge in modern life, especially for young adults who are just starting out with jobs. But there are things you can do to help. For example, if you’re struggling with impulse buying, try leaving your credit cards at home and only buy what you can afford in cash. This can be a hard habit to break, but it will help you avoid debt and build savings. 

4. They don’t want to pay for overspending 

It’s easy to rack up debt when you make impulsive purchases that you can’t afford. In addition to credit card debt (which Americans currently owe $979 billion) and student loans, mortgage payments and car expenses are also common ways that people end up in debt. 

One of the most important reasons to avoid being in debt is because it can negatively impact your life and well-being. A recent study by National Debt Relief found that those who are in debt are less likely to get a good night’s sleep, experience higher levels of anxiety and withdraw from activities they once enjoyed. 

Another reason why people avoid being in debt is because they underestimate small expenses. It’s easier to keep a mental tally of large monthly expenses like rent, car payments and utilities, but small ones—like eating out, buying coffee and snacks, and paying online for media content—can add up quickly. To prevent this from happening, set up a savings account where you put 10% of your paycheck each month. This can be a great way to start getting your spending under control.