Debt is money borrowed, usually from financial institutions and banks for a specified period of time as agreed between the lender and the client. Personal and family needs and expenses may sometimes drive you into debt – the loan may be capital to start a business, pay for emergency expenses or renovate a home or office.

Not all debt is bad debt. However, some people have problems with managing their resources and money because of their over-pampered appetite to spend as much as or more than they earn. Few people have the finances to pay for large items such as new cars, washing machines, long holidays abroad without going into debt, at least temporarily. Yet, it is possible to be debt free and people who practice such a lifestyle have some very commendable features and characteristics, as listed below.

1. Knowledgeable

One of the most important characteristics of a debt-free person is that he or she is knowledgeable about financial management and has put that knowledge to good use. Without knowledge, there is a limit to what people can do about their financial mess and seeking to be knowledgeable about financial management through books, videos, programmes, seminars and practicing what is learnt is key to a debt-fee lifestyle.

2. Prioritise Better

Buying what you want rather than what you need is a recipe for disaster that could leave you wallowing in debt all you life if you don’t put a stop to it. One good habit to develop and cultivate is the ability to prioritise what is required in life on a day-to-day basis. Debt-free people can walk past a shoe aisle or a shop wall of flat screen televisions without blinking because they know such items are not top of the priority list and they would need no go into debt to acquire such items.

3. Confident

Many people live their lives to impress others. People like that always have to have the best phones, most up-to-date gadgets, have the latest television sets in their sitting room to gain social approval and validation. In contrast, people who are debt free are very confident and do not need to live to please someone else. They are confident within themselves and this helps them be satisfied with what they already have instead of forcing them to search constantly for something newer and flashier and risk putting them into debt.

4. Goal-getters

To achieve anything in life, you need to be goal-driven and work towards its realization. The need to be debt free and live without having to worry about paying interest on loans is the desirable situation. However, only the type of people with such goals and ability to pursue and get it will achieve a debt free status. Being debt-free could be your biggest goal but you need to take the right action to achieve it.

5. Mature and Responsible

Maturity and being responsible are the most beneficial traits regarding financial management. Being mature however is not associated with age because some older people still do not understand how to spend their money prudently. People living debt free lives are mature and responsible enough to have a financial plan and budget that they can follow.

6. Disciplined

To achieve a debt-free status, you must be disciplined and remain focused. Debt-free goals require you to stop extravagant spending and focus on paying off any money borrowed first. Discipline is needed to follow the budget strictly and this is a major characteristic of debt-free individuals.

7. Sacrifice

Debt-free people do not need to worry about debts anymore but they watch their appetites for items that are not needed, outings that require a lot of expenses, the number of weekly cinema trips or sports matches of trips abroad so as not to plunge themselves back into debt. They watch these things and sacrifice things if necessary so as not to be in debt.