8 Steps Towards A Debt-Free Lifestyle

Estimated reading time: 13 minutes

Your debt-free lifestyle offers you opportunities that don’t come for free.

Today, I discuss what to expect when you become debt-free and why it won’t be free.

You Can Live A Debt-Free Lifestyle

Working towards a debt-free lifestyle is possible if you want it bad enough.

I’m sure you all know that the eight steps are only stepping stones, meaning one step leads to another.

Perhaps you may learn that our steps differ from your ideal steps, but learn to create your own.

You may only need one step, but the first step may be the most important.

You can make that happen.

Some of you may not start saving early like we did, but that doesn’t mean you can’t follow the road to debt freedom.

Start today, even if it’s a small amount of savings, budgeting, and mindfulness of expenses.

Your Debt-Free Lifestyle Means Saving

It can happen if you take a sincere interest in learning how to pay off all your debt and start saving for everything you’ve wished for.

Sometimes, we have to make sacrifices to get ahead, especially if we’re in a relationship.

Getting rid of our mortgage was one of our top goals when we bought our home.

Instead of investing in renovations like we wanted to with the extra money saved, we took a step back.

We didn’t invest all of our savings into our down payment because we wanted to do major renovations, but that quickly changed.

One thing I’ve learned as a homeowner is that sometimes things don’t always go as planned; you might have to skip a step, which you can later return to.

Facing Challenges Along Your Journey

My biggest challenges were establishing myself in Canada and building credit as a permanent resident.

I had a lot on my plate, so some things had to be put on hold.

We needed to reduce personal debt, than what we needed to modernize around the house.

Of course, yearly home maintenance was always completed.

Living a debt-free lifestyle meant more to us than a new kitchen or $10,000 spent on new hardwood floors.

This is not all-inclusive but a personal insight that helped bring us to our almost debt-free status today. 

I’ve also learned that to make it to a debt-free lifestyle, we must get past the obstacles that so many face.

I’ve detailed below eight steps we’ve met or overcome along our journey thus far.

Marriage and Debt

When most people get married, they take on each other’s debt, “What’s yours is mine, and what’s mine is yours” is a saying we all know too well.

There was no “my debt” when we got married.

It became “our debt,” and we did have debt.

Mrs. CBB had a vehicle payment with 0% interest over 60 months that we had to finish paying.

I paid cash for my vehicle but also had to save money for my education, which was not in my plans.

So, where I had no debt, she compromised by paying the bills so we could get ahead.

How I Earned Extra Money

Out of nowhere, I became the man who could fix things for people.

It wasn’t so bad; I learned about Canadian houses and vehicles and made new friends.

I earned extra cash by repairing our friend’s kitchen by adding a backsplash to their new modern home.

I didn’t charge an outrageous fee because I wanted to help them like he was helping me.

What little money I did earn went towards savings to help pave the way towards living our debt-free lifestyle.

Every little bit helps, but in moderation, as you don’t want to create an imbalance in your life.

I asked for $100 cash, and he took me out for Chinese lunch, where we laughed and had a couple of beers.

Another time, I helped a friend who wanted me to fix her dishwasher and install her kitchen worktop, which she had pre-cut from Home Depot.

I did that job for $150 because I knew she was a single homeowner and didn’t have much money.

No, I’m not assuming either; she said so in conversation.

She needed to use savings to buy a townhouse instead of renting.

Searching For Money-Making Opportunities

I also took the liberty of joining focus groups in our city that paid cash for my opinion.

It was the most accessible extra money I’ve ever made.

There’s nothing like talking about coffee, road salt, cigarettes, and I can’t remember how many other topics earning anywhere from $50- $100 for less than an hour.

A huge bonus was that they fed me dinner.

I did whatever it took to earn money so I didn’t have to pull from the savings we worked to build since we were in our twenties.

There are so many ways to make extra money to pay off bills.

Even if you can’t leave home, you might be able to offer your services as a tutor or babysitter, start a blog, sell on eBay, or freelance.

Not My Debt

If you open your bills and prance around with your fingers in your ears, looking the other way and rhyming off the “It’s not my debt la la” tune like a child, get over it.

Stop dissing the debt and saying it’s not yours; I didn’t create it, so I’m not paying it.

You are responsible for the money owed if it’s in your name.

Waste no time; find out who you owe, and start paying the money back.

If you are in a legal battle, consult your lawyer to get professional advice instead of leaving the debt unpaid.

The last thing you need is a mark on your credit report that will follow you for years.

Not all debt is created equal, but unfortunately, some people pay the price and have to learn from their mistakes.

Our divorced friend had a credit card in her name while married.

Her ex-husband charged purchases made online to that card, but she was still responsible for it when they split.

He had no money, so she was forced to pay for it or risk a bad mark on her credit.

Paying Off Student Debt

Student debt: so many people of all age groups face paying back student loans in the form of OSAP or a credit line from the bank.

Many students also have credit cards that are maxed out and soon realize after the fun is over in University and College that they are now in the “real world.”

You may not have been the person who was partying every night of the week, but you still have debt.

School isn’t cheap, and it’s not getting any more affordable, which is depressing for many students.

If you want to pay off your student loans fast, limit fashion trends and dining out to focus on your finances.

You can balance life with a budget, but adding more debt may cause breaks in the journey.

Moving Back With Parents

If you’ve moved back home with your parents, don’t get relaxed unless you plan to stay home until you get married.

Even then, you still leave home with debt if you haven’t taken the opportunity your parents give you with little to no rent to pay it all off.

They are doing this to help you; they understand what it’s like out there.

When I returned to school as an adult for the second time, we had to buckle down on the spending.

I had already saved to pay for University once and had to do it again.

We lived frugally during those years before we bought our house.

It aligned with our goals, and we never felt like we were giving anything up; we were gaining if anything.

Our lives were put on hold while I was learning, costing us more money than anticipated.

No one likes to hear it or face it, but debt doesn’t just go away, and as a student, you may not have bought a house yet or even a car. 

Never mind if you want a big wedding with all the bells and whistles followed by starting a family.

Debt may be your worst enemy.

People Who Owe You Cash

Who owes you money?

Don’t be shy to ask if someone owes you money, especially if it’s friends or family.

We had loaned a family member 30,000 dollars; you can bet we won’t forget it.

The money has been paid back, but some people loan $5 here and $10 there to friends who say they will pay you back and don’t.

Letting them get away with that is not good enough, especially if you wouldn’t do the same.

The person is not learning responsibility for their actions and needs to be called on.

Mrs. CBB had a friend who would always borrow smokes from her.

She would tell her that she’d “pay her back.”

Well, that never came, and my wife wouldn’t say anything because she knew she was struggling for money.

Maybe she was, but Mrs. CBB wasn’t helping by allowing her to think she could get stuff for free and not pay for it.

Agree if you genuinely want to help someone and don’t expect the money back.

Say, “Hey, no worries, it’s OK“.

There is no reason you can’t help someone, but you also can’t be dishing out cash to everyone.

Teaching Children The Importance Of Money

It’s the same with your child.

If you offer your teen $5 to mow the lawn (I know not all parents pay for chores, and that’s fine), and they agree but ask for an advance on the money, and you give it.

The problem is the teen mowed the lawn, not the next day or week, not ever, the father did.

Unfortunately, the teen didn’t learn a lesson at all.

They learned that mom and dad are soft, I can get away with things if needed, and someone else can do the work.

This lesson may also carry on with this teen into his adult life.

If you keep passing out cash like you have endless amounts, you will see your savings dwindle or not grow.

It may not seem like much, but small amounts add up quickly.

Pay Your Debt Off Fast

Ask yourself, Who do I owe money to?

If you owe money to anyone, you’ve got debt.

There is no good debt.

If you owe money, you should pay it back in a reasonable amount of time.

What’s reasonable depends on how much interest you are willing to pay and how much money you can earn through investing.

Not everyone shares the same values regarding money and investing, so make informed decisions.

When working towards a debt-free lifestyle, figuring out who you owe money to should be a priority.

You need to know all these important details and have them readily available for review.

I can’t tell you how many people I’ve talked to who have no idea who they owe money to.

If I asked someone who owed them money, they could rhyme names faster than you can shake a stick.

That’s how well you should know your finances, inside out.

If you owe money, paying off your debts should be a priority.

Please don’t pretend like they aren’t there or that they will go away on their own.

More Than Minimum Payments

If you think paying the minimum payments on all your debts puts a dent in them, you may be surprised to find out that’s not always the case.

When Tony came to me and said that he had paid off over $100,000 in debt, I knew anything was possible.

Related: Pay off debt using the Snowball repayment plan

Financial freedom does take more than money.

It takes courage and wants to want a debt-free lifestyle.

You may consider earning more or spending less if you aren’t making enough money.

Remember Katrina, who writes on occasion for CBB?

She’s in a better place with her finances now because she created a business to earn extra money with her passion and skills to pay off her debts.

She knows what she wants and is working towards a debt-free lifestyle.

Budget Plan and Invest

Have you ever told yourself that you wished you had done something sooner?

It happens whether it’s buying a house when the interest rates are low, places are relatively reasonable, investing in stocks and other investments, applying for a job, or even taking care of your finances with a budget. 

Whatever you choose to do with your money, make informed decisions that you can live with.

Budgeting From The Ground Up

I won’t go into great detail, but if you’ve never budgeted, It’s safe to say that you aren’t too familiar with where to begin or need a push to start.

You can read my budgeting series, where you will see the Canadian Budget Binder sample we use for our family budget.

That budget didn’t happen overnight.

It took over a year of practice, making changes, and we continue to do that month after month.

We started our budget by creating a sample budget, not one but two budget samples.

The reason was to evaluate a budget with our current net income and another sample budget only using one payment.

Start With A Basic Budget

You don’t have to go all fancy with a budget unless you want to, but we kept it simple.

The second sample was to investigate how our lives would be affected if one of us passed away, lost a job, or could no longer work.

Getting started with a budget was a main priority in reaching a debt-free lifestyle.

Saving $185,000 to pay down our mortgage since 2009, we were given a kick-start by focusing on where our money was going.

No, we did not save that much in a few short years with a budget.

It was a combination of everything discussed in this post that has helped us build up our savings.

Budgeting isn’t for everyone; many people I know are successful without using one, and that’s great.

Decide what works best for you.

Spend Less Than You Earn

If you follow my blog, you’ve probably got my quote engrained in your head by now, as it’s at the bottom of almost every post. “It’s Not About How Much Money You Make; It’s How You Save It.”

I do that purposefully because the more you see something, the more it might sink in.

We are all creatures of habit, and unless we choose to change, we will continue to do what we are used to.

You can be frugal and still enjoy your life, and for some, living a minimalist life seems like the better way to go.

If buying new clothes is essential, pick a few quality pieces you can mix and match.

If you get your clothes at second-hand shops, that’s also great.

There are endless ways to save; you must know where to find them.

Too much stuff or clutter in your environment sometimes swallows you up.

We opt not to buy more than we need in our house and keep “stuff” to a minimum.

We also eliminate what we no longer use if we haven’t used it in six months to a year because we likely won’t if we haven’t by then.

What Kind Of Saver Are You?

I’ve saved my money since I was young and bought my first house at 21 while still enjoying my youth.

I continue to follow the same path as an adult but don’t have to be flashy with cash to enjoy myself.

The words, I Am A Saver, have been a stark reminder because I don’t want to pay for mistakes I could have avoided.

A Debt-Free Lifestyle Begins With You!

If you want to live a debt-free lifestyle, avoid the negative mindset and get on with it.

It will take time, but all we have is time to balance it with some fun. 

Stop dreaming about how to live a debt-free life; start living it today.

Discussion: In what ways do you work towards living a debt-free lifestyle?

If you don’t want to be debt-free, what are your reasons?


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  1. Spend Less Than You Earn. If everyone followed that one simple tip, we wouldn’t have such a big consumer debt problem in this country.

  2. These are great tips! I especially love the idea of seeking out focus groups. I did one once a long time ago and enjoyed it, but haven’t really thought about it since. I have to admit that I have a hard time with asking people for the $5 or $10 I lent them. It just makes me so uncomfortable. Any suggestions for how to do that without it being awkward?

    1. I’m not too shy about it but I would simply slip in… do you by chance have teh $5 I lent you last week as I’m short on cash. I see no need on hiding the truth, it is what it is. Don’t worry what they think of you, remember who borrowed the money in the first place. Sometimes people forget but remember how long it took you to earn that money and why you work hard the way you do. Don’t ever let someone else make you feel as if you are stepping over your boundaries or are not entitled to your money. It does not make you seem Cheap or someone who is struggling for cash. Either way it’s none of their business. Best thing, do it with a smile, add in a joke, just be you!!! Mr.CBB

  3. Where on earth can I find someone to pay me for my opinion? No one usually pays attention to what I have to say. It must be your cool accent!

    In a way, I am tremendously thankful for my debt. It sucked the life out of me for a while, but when we killed most of it, I know we can do anything. I can’t wait to get the house paid off. We actually just took a new “job” this week. Our lawn service at my office was not doing a great job, and my husband and I decided to take it over. It’s a business expense, but why not pay ourselves? I guess now I’m a maid and a gardener, but I couldn’t be happier, and it puts us that much closer to being truly debt free.

  4. I really wish you lived near me so you could help me fix a few things around here! You sound like a great friend! I think I’m in the middle ground a bit here. I don’t do “everything I can” to save money (I don’t have debt), but I try to find balance in enjoying my life. I try to make little changes so that little by little I live a more frugal lifestyle. Baby steps work for me. As always, I’m a work in progress!

    1. I wished I lived near L.A too!!! the snow was exciting and it usually is for the first week but that’s about it. I think a balance is important Tonya especially if you have an action plan in place.

  5. “Spend Less Than You Earn”. This was hard to do when we first took a look at our finances, but it was something that had to be done. And to be honest, there are still some months where there is a bit of hiccup, but we figure it out and keep going.

  6. A very good article and much food for thought here….. Definitely something I’ll be mulling over for the next while…….

  7. spending less than you earn is a great idea! My BF is working full time and earning good money, but since I have a small student loan&grant income to live on, we both follow my spending limit, so BF is saving over half his paycheck every month, just by living like I do! This is definitely something I´m going to do as well as soon as I get a full time job.

  8. Great post, Mr. CBB! It’s easy to be in denial and pretend that we’re not living above our means. But debt always catches up with you. It’s far better to be ahead of it and proactively working towards eliminating it. So many people think it is too much work and too painful to adjust bad habits. It is an adjustment, but I can tell you after working with my clients the pain of too much debt and failing off your own fiscal cliff is so much worse. Lots of great insight and tips here!

  9. Good post Mr. CBB! We work towards debt freedom by keeping to knock away at it with fervency. Thankfully all we have is our mortgage and plan to keep it that way as we’ve moved towards wanting to pay for what we want as opposed to financing much. I did not get to that overnight, but have learned that is what works best for us and avoid debt like the plague.

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