When we were getting out of $90K in debt, we developed habits that completely changed how we handled money. But what surprised us most is this: we didn’t stop doing them once we became debt-free.
These habits didn’t just help us get out of debt. They’re the same ones we still use today to live more intentionally.
Before We Dive in
None of these habits would have worked without a budget. We didn’t do anything complicated, but we knew where our money was going and what we could afford.
If you don’t have a budget, it’s really hard to make progress because you’re guessing instead of planning. We talk more about exactly how we budgeted in our post on how we paid off $90K in debt. Read on to learn what frugal habits stuck after we became debt-free.
The 5 Habits
These are the habits that made the biggest difference for us and that we continue to apply everyday:
- Using cashback credit cards (carefully and intentionally for necessities)
- Paying credit card purchases off immediately
- Automatic savings transfers
- Requesting new auto insurance quotes periodically
- Cooking more meals at home
Cashback Credit Cards
Credit card companies might say, “earn rewards,” while someone like Dave Ramsey would say, “CUT THAT CREDIT CARD.”
We didn’t cut ours… Sorry, Dave.
We changed how we used them. Before, I wasn’t too focused on which credit card offered what rewards. But wanting to get out of debt really pushed us to explore these things. We also were becoming more conscious of our purchases, prioritizing buying necessities over wants.
One of our credit cards offers 5% cashback for different categories each quarter, like gas station or grocery store purchases. That added up quickly, especially with rising prices these days.
Plus, after earning cash back, we were able to use that extra money to pay the next charge!
If you already have a cashback credit card, use it to your advantage.
Paying Immediately
What I mean by this is every time we charged our credit cards, we immediately paid the total charge. One of our credit cards won’t allow this until the charge posts, so we paid immediately after that. This habit made one of the biggest differences for us. It completely changed our mindset about credit cards.
This kept the balance from building up and helped us treat it more like a debit card. Plus, it encouraged us to spend our money more intentionally.
A credit card is borrowed money. You don’t want to slip into a habit of using it and letting the balance build, leading to debt, interest, and overspending habits. Paying it off immediately helped us avoid all of this and we still do this today.
Auto Insurance Strategy
Most people let their policy renew without thinking about it. We used to do the same thing.
Then we started requesting new quotes with our auto insurance company every 6 months right before the renewal date. This knocked off at least $100 or more on our terms.
We also chose to pay the full 6-month premium upfront instead of installments. This gave us even more savings.
Something else we didn’t realize at first was that credit scores can greatly affect auto insurance rates.
Before your auto insurance renews, request a new quote either with your current provider or others. This could lead to some major savings. We still check rates every 6 months.
Automatic Savings Transfers
We already had our $1,000 emergency fund, but we needed a way to stay ahead of the larger expenses, such as that biannual auto insurance premium. So we started automatic transfers of $10 from checking to savings every weekday. This doesn’t sound like a lot, but it added up quickly and ensured we had the money when we needed it.
Set up automatic transfers to savings. Consistency matters more than the amount.
Making More Meals at Home
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This was a huge habit to start. We went out to eat often. Multiple times a week sometimes. Looking at receipts and bank statements, we were spending $30 or more when eating out. No leftovers for the next day. Unhealthy foods. All because we were “too tired” to make our own food at home.
Cooking at home has really improved our culinary skills! This is one of our biggest money-saving habits.
Make more meals at home. Stay home. Save fuel. Eat healthier. Have leftovers!
Why We Still Live This Way
Becoming debt-free didn’t mean we suddenly had extra money to waste. It meant we finally had control. If I can be a bit dramatic…of our lives.
These habits help us:
- Stay prepared for expenses
- Avoid going back into debt
- Continue building toward bigger goals (like our future homestead)
But I’m serious, financial troubles can greatly affect your quality of life, putting stress and strain on yourself and others. We’re sharing our habits and tips in the hopes that it helps someone else out there looking for financial freedom.
If you’re working toward becoming debt-free, read our post about how we conquered over $90K in debt here. Our story provides valuable insights for anyone searching for financial stability.