Let me set the scene:
- You’ve made up your mind to get out of debt. ✔️
- You’ve figured out what you’re going to do to get out of debt. ✔️
- Eventually, you become debt free! ✔️✔️✔️ (and congratulations to you!!)
The question now is: What are you going to do to maintain a debt free lifestyle?? Have you given it any thought?
With only 23% of Americans being debt free, today I want to share 5 things we do to maintain our debt free lifestyle and why we choose to do them.

1. Budget
It should be no secret by now that we like to budget. We believe in doing a budget. And at this point, we will forever do a budget. Why? It helped us to get out of debt and quite frankly, it’s helping us to stay out of debt and maintain our debt free lifestyle. Once we were debt free, we had to figure out what to do with all the extra cash-flow we had each month. If we weren’t budgeting we could’ve easily let that amount of cash just flow right on through our hands and out the door, never to be seen again. Instead, we discussed things we needed to do with the money as well as things we wanted to do with the money. And of course, we added this to the budget.
One of the big things we were able to realize and implement was me working less and less after we had our first child. First, I went back to work part-time after he was born. And a little before he turned one, I went PRN (I’m only required to work 3 shifts in 6 weeks). If we weren’t actively doing a budget then we wouldn’t have realized that I could work less.
We’ve been debt free for 4.5 years now, and the majority of the things we’ve been able to do have happened, in part, because we do a budget.
It’s just another one of the beautiful things about budgeting.
2. Fully-Funded Emergency Fund
Doing a budget and being great at it is fine and dandy and all. However, if you don’t have some money saved up not just for a rainy day… I’m talking more like a monsoon or something, then you’re bound to go back into debt, not if, but when something happens. Because something will happen. The important thing is to be ready for it once it does happen. And that’s what a fully-funded emergency fund is for.
We started with the goal of a 3-month emergency fund and then kept saving until we reached 6-months’ worth of expenses. Within the last 1.5 years, we decided to increase it to 9-months’ worth of expenses. Why? Because it makes us feel more comfortable… just in case.
Truth be told, we haven’t had to use our emergency fund since we’ve fully-funded it. Most of this is because we’re debt free and we choose to cash-flow any emergencies that come up by using money that was designated for our wants. For example, when we were going to redo our kitchen, our HVAC system went out. This was during the winter. Yes, we could’ve used our emergency fund to pay for it and still get our kitchen done. However, we don’t like owing people, ourselves included. So we used the kitchen money and then took a couple of months to save again to get the kitchen done.
I’m not saying that you have to do exactly what I described above. But what I am saying is that it’s nice to have the option to cash flow emergencies or use your emergency fund.
3. Saving For The Future
For us, this includes retirement and kids’ college education. $$$ Enough said? In case it’s not, if we weren’t thinking ahead about our future we could easily end up back in debt trying to cover expenses once we retire. And the same goes for trying to cover our kids’ college education once they reach that point. Omar had the opportunity to go to college for free thanks to his dad taking less pay for him to do so. And I paid my student loans off in less than 4 years after graduating college. Since we’re debt free, there’s not much excuse for us to not be able to secure our future and our kids’ futures as well.
- read: Is Social Security Enough For Retirement?
- read: Why You Should Save For Your Child’s College Education
4. Blow Money
What does blow money (aka spending money) have to do with maintaining a debt free lifestyle? Welllll, I’ve said it before and I’ll say it again… it’s my favorite part of the budget. Saving money for retirement and our kids’ college and even paying off the mortgage (link) is great and exciting. But for me, blow money is my favorite because I can spend it on whatever I want to. It’s just enough to scratch my itch for shopping. Lol. The same goes for Omar. And if there’s anything that we want to get that’s outside of our blow money (i.e. tools we need for the yard or new furniture, etc.) then it’s something we discuss and plan to add to the budget.
Ultimately, we plan to spend. We didn’t become debt free to never spend again.
5. Reassess As Needed
Every so often we reassess. We reassess our goals and what money is needed to achieve them. We reassess our budget to make sure we’re not spending too much frivolously since we do have leftover money in our budget. And from time to time we check-in on how we’re each feeling about what we’re doing with our money.
Final Thoughts
You won’t get out of debt without a plan. And you won’t be able to lead a debt free lifestyle without a plan. What you choose to do with your money is up to you, just be intentional about it so you don’t go back to old habits (aka debt).
Thank you Kim!!!
Anytime!!
Love these post!!!! As always thank you guys so much for sharing your testimony with us. I am enjoying reading the post you guys submit. It gives me the opportunity to learn something new and to also ask questions about finances and other goals in life. It’s all about elevating and moving to that next level in life. We are counting down the days to when we can be debt free. My biggest goal is to remain on target for becoming debt free and not going back to debt having old habits lol.
You’re welcome!! And you know we’re here to cheer y’all on in becoming debt free 😉
I find that a generous overdraft (bank credit) at a reasonable interest rate (<15%) is an acceptable form of "emergency fund" given that the rest of my money is working for me (invested).
I don't go into it that much and if I do I repay within hours/days.
I can understand the psychological need for a cushion but I don't think it's essential plus you lose out on capital growth by keeping money tied up doing nothing.