12 Frugal Strategies for a Debt-Free Life

12 Frugal Strategies for a Debt-Free Life

You might not be able to wrap your head around what it’s like to be debt-free, living a self-sustaining life.  I know, there was a time that I couldn’t either.  That’s why I can’t wait to share “12 Easy Steps to a Debt-Free Life”.

Getting to be debt-free was a long haul for us, with years of poor decisions that kept demanding payments each and every month, with after-tax dollars.  But after 3 1/2 years of hard work, selling a significant percentage of our possessions (to create cash for bills) and absolute resolve to get out of the mess we were in, we finally paid the past bill off and we were debt-free in January of 1996.

Debt-free is the new rich!  How do you become debt-free?  Read on….


Many times, the journey to being debt-free will include some serious downsizing.

We had downsized to a 2 bedroom, 1100 square foot rental with three children in order to lower our overhead.  While it wasn’t the easiest living arrangement of my life, it was a safe home and that decision helped us to reach our goal of being debt-free.  It was a means to an end.  Had we not chosen this path to get out of debt, we would have never been able to afford the homestead that we now enjoy.

In my mind, the battle to get out of debt is 50% financial and 50% mental!

You have to really wrap your brain around these concepts and be willing and prepared to stand strong for your goals!  Everywhere you go, you’ll be tempted to buy something, we are faced with over 5,000 images every day to consume!  Isn’t that crazy?  I mean, I am SO tempted every time I go into Rural King!!

But it’s true, and unless you have your “financial blinders” on, you’re not going to be successful, and ultimately debt-free.  You’ve also got to be strong in the face of criticism from those who don’t see the value of your goals.

After reading tons of books about finances and getting out of debt ourselves, I’ve come to notice certain habits and behaviors of people who are financially secure and debt-free.

planner financial

Create a Financial Plan that You Model Your Everyday Actions By

Don’t be intimidated by the words “financial plan”, that just means that you have a budget and a plan, hopefully on paper, that you and your spouse agree upon.  When there is unity in the family about the “financial plan” and what everyone is hoping to accomplish (paying off the debt, buying a homestead, saving for the future, taking a great vacation, paying cash for college), then there will be little resistance when changing their everyday behaviors.

Habits are what created the mess, better/wiser habits will help to get you out.   If you’re used to stopping for coffee and a donut everyday on the way to work, that habit needs to change.   You need to eat at home and make your own coffee.  Even better, get a decent “to go” cup (at the thrift store) and put your coffee in that.  Then keep filling your cup up with water the rest of the day.  This will keep you from spending money on soda and energy drinks.

water bottle

Eating out will also keep you from reaching your financial goals and being debt-free.  Pack your lunch at home!

Buy gas on the cheapest day, GasBuddy has a great app for this.  Pay at the pump to resist temptation inside the store, if necessary.

When you have a financial plan together, you realize that you can’t keep doing what you’ve been doing….things have to change!

Avoid those places that cause you to spend money, whether it’s a convenience store or the mall.  When we were getting out of debt, I avoided certain stores like the plague because I knew that it would be very tempting to spend there, and I wanted to be debt-free more than anything I could buy!

That’s the key question:  How bad do you want financial freedom?  Are you willing to do whatever it takes to get out of debt???  Then changing daily habits in order to keep that money in your pocket is critical.

50 Frugal Living Hacks to Pay off Debt

coins in jars

Create a well-oiled budget

A good budget takes a little time to work out.  You have to start somewhere, so write out your first budget and begin, but remember that in order to really get a good budget going, you’ll need to recognize areas that need to be modified.

For a list of online budgeting tools, head over here.   If you prefer paper and pencil, that’s fine too.  It doesn’t matter how you do it, just do it.   Good record keeping and accountability are the keys to success!

When my husband and I first started this process, we collected receipts for several weeks in order to get an idea of what the basic expenses truly were, like groceries, gas, childcare, etc.  As months went on, some categories were over-funded and some were under-funded.  We didn’t do anything wrong, we just needed to make adjustments.

Be Coachable and Willing to Change

Being coachable is an important character quality regardless of your age.  When there is an attitude of arrogance, then change will not come.  We need to be humble and open to the advice of wise counsel, especially those who have walked this journey themselves.

None of us can live long enough to learn everything we need to know all by ourselves, we need other people!  We need encouragement as well, this is why it’s great if you can find some friends who have the same mindset that you do, or even your parents.  You could meet up, discuss your goals and get some accountability.  Allow someone else to give you constructive criticism, we all need that once in a while.

urban building close together

Live Below Your Means

In one of the best books I’ve ever read, “The Millionaire Next Door“, the authors discuss the attributes of millionaires that they studied.

You might be surprised to know that many true millionaires do not live in million-dollar homes, but rather in middle-class neighborhoods.  They’ve learned to live below their means.

Just because they could afford that kind of home doesn’t mean they want one.  The truly wealthy want to have plenty of liquid cash flow available to them in the bank, not tied up in real estate.  The millionaires that Thomas J. Stanley and William D. Danko studied also don’t want the high overhead that goes along with a large home, like property taxes and maintenance.

When my husband and I were working on getting out of debt all those year ago, we did everything frugally.  We shopped at Aldi, made laundry soap, watered down dish soap and shampoo,  budgeted every drop of gasoline and bought our clothing at garage sales and thrift stores.  All these years later, even though we are much more established financially, those habits didn’t change.  We still live in a house far below our means, we drive old cars (insurance and repairs cheaper!) and shop at thrift stores…..and I still love Aldi.

These habits served us well, and met our needs.  Why change them?

Learn to be Disciplined

Children fight discipline, primarily because they lack the foresight to see how it will benefit them in the future.  But as adults, we can find joy in discipline because we know that it is good for us!

Being disciplined about your spending might feel a little weird at first.  However, once you get used to your new way of thinking about money, you’ll come to love it.  See it as a game. When you go out somewhere and see something you want to buy, ask yourself “Do I REALLY need that?”.

Well, of course you don’t in 99% of the cases.  Then walk away and keep your money in your pocket.

bride upset car broke down

Plan for the Unexpected to be Debt-Free

Planning can include long and short term goals.  Short term goals might include planning for your day and bringing food/entertainment to sustain you until you get home.  That might also include making decisions about dinner that evening so that you can resist that “I’m too tired and hungry to care” feeling, that can lead to eating out.

Longer term goals might be knowing that your tires are just about bald, and winter is coming.  Rather than wait for a blow-out, the financially shrewd would set aside some money each paycheck in anticipation of this expense.  This keeps your budget from blowing up.


piggy bank

Save, save….SAVE

How do people have money to save?  When they plan and live below their means.  The money that they don’t spend on their lifestyles can go to savings.  The only way to pay off debt and subsequently begin saving that money is to lower your lifestyle.

older couple

Get Good (free) Advice

If you have parents who have done well in life, start with them.  Ask them how they did it and what their recommendations would be.

If that’s not the case, as was in our lives, then read.  Read everything you can get your hands on.

The book that got us started on our debt-free journey was “Master Your Money” by Ron Blue.  “Master Your Money” is an older book that is available at the library (we’re not spending money, remember?)

Dave Ramsey is good too, but Ron Blue came first.  As a matter of fact, I believe that Dave Ramsey took the “Master Your Money” course to help with his own financial issues, long before he became a financial guru.

Ron Blue gives great tools to help with budgeting sheets, with plenty of tools to help you be successful.  This is the book and system we used, and we loved it!

If you attend church, ask if there is some sort of financial ministry available.  This is another great way to get some advice and accountability.

Stay Away from Places that Instigate Temptation

Stay away from places that might make you feel like doing some unplanned spending, but also avoid places that might bring on some self-pity.  Self-pity doesn’t do anyone any good, and you need to control your thinking if you want to get out of debt.  Remember above, 50% mental???  Yep, protect your mind.

You might want to reconsider friends or family who might unleash a river of judgment about what you’re trying to do.  From my experience, these are usually people who have a ton of debt and other financial problems and you’re making them feel uncomfortable.

Learn to not “throw your pearls to swine” and keep your financial discussions to those who will support you.

Stay Focused

Along with discipline comes “focus”.  “Focus” defined means that something is the “center of interest or activity.”  Saving money needs to be your center of interest.  Being just a little “OCD” about it is ok for a while.  Read every book you can get your hands on, read blogs, etc.  Surround yourself with encouraging information every day.

purple leaf with water drops

Be Determined to be Debt-Free

“Determination” is defined as “firmness of purpose; resoluteness”.  Think about that, “firmness of purpose”.  Failure will not be an option and surrender will not be considered.

Forget About What Other People Think

People pleasers will struggle with this, but don’t expect friend and family to be thrilled about what you’re doing.  As a matter of fact, expect some friction.  Here’s the secret….you have to not care what people think.  This is your life and your checkbook.  You have the right to do with it what you want, and hopefully you’ll find the resolve to throw that debt off your back!

Freedom feels awesome.



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This Post Has 4 Comments

  1. Carissa - All Day Mom

    This is a great article and outline! You reminded me of my favorite bit in The Millionaire Next Door when the millionaire informs his wife that he just made a ton of money, and she congratulates him and keeps clipping her coupons!
    Thanks for the sound tips! Please email me if you’d like to guest post on All Day Mom—I’d love that!

    1. Kelly

      Hi Carissa! I remember that quote as well, love that book!!! Thanks so much for reading and I’ll be in touch!

  2. Mandy

    When my husband and I were house hunting back in 2000 (during the housing bubble) our credit union shocked us when they wanted to pre-approve us for a mortgage at almost DOUBLE what we planned to spend. I told the loan officer I wasn’t sure if I wanted to do business with people reckless enough to lend that much money to a pair of schlubs like us.

    We ended up on budget, buying a 2,200 square foot home in a very pleasant and convenient Denver suburb, so apparently the credit union was eager to help us buy a mansion. After ten years of paying extra principle against a 15 year mortgage and expending some sweat equity, we are mortgage free in a lower cost state, living in a nicer home. If we’d taken the credit union’s offer we’d be in a very different situation.

    1. Kelly

      Hey Mandy, Good for you! Yep, that’s pretty common, the banks want to finance you to the hilt because they make commission off that amount. Sounds like you came out on top!

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