Living debt free in present society has its big financial challenges as well. Try renting a house or availing a loan without your (metaphorically) credit history your (metaphorically) gold seal of life achievement. The actual definition of debt free isn’t quite as easy to define. Rather it depends on how you want to define it and how you want to achieve it. Let’s tackle the two most popular definitions that are being bandied about.

Living debt free by means of very high interest rates – This is perhaps the most dangerous form of living debt free. High interest rates that result from high balances that can’t be paid down – this is what makes credit card bad debt so dangerous. These kinds of loans are granted at very high interest rates and the moment that payments are defaulted on, the consequences are catastrophic. If you take these loans seriously, and are able to pay them off before they fall behind, you can do yourself a world of good.

Living debt free by means of no debt – this is good debt-free life but it is also not quite so good in terms of how you will actually perceive yourself. For many, this is the most dangerous form of living debt free. In fact, it is synonymous with living under a rock. How you define debt free will depend on your perception of what it means to you. For some people, debt free means never having to repay any debt. For other people, debt free means getting out of debt and starting over, financially, although not in the same shape as before.

Living debt free by means of no debt, and good debts, that will never have to be repaid, is easier said than done. Some will try to take the easy way out and just live off whatever they happen to have left after paying for all their monthly bills. Others will try to live within their means and pay as little as possible. But whatever way you choose to live, you will inevitably fall behind.

So, how can you maintain a debt-free lifestyle? You start by reducing your current spending as much as possible. This means that you need to save as much as possible, ideally, every month. Most people tend to spend more on impulse buying rather than on essentials. However, by making a list of the things you buy on a regular basis, and then calculating how much you would have saved if you had chosen to buy those things instead, you will see that you are actually saving money.

Once you have saved up enough money, you then need to make timely, affordable payments. It is advisable to start saving money right away, as soon as you get your first job. Don’t think that you can only make one payment per month; remember that you only have to make small payments towards your debts. Once you get into a debt free lifestyle, it is very easy to fall into the habit of spending again, without considering whether or not you actually have the money to cover those purchases. To be able to maintain a debt-free lifestyle, it is also necessary to budget your money, so that you know what you have to spend and what you don’t.

There are also a number of things you can do to help you become debt free. One of the best ways to help you become debt free living debt free is to avoid using credit cards. Credit cards make it tempting to buy things that you couldn’t otherwise afford, but that temptation can lead you down the path to more debt. Credit cards usually come with high interest rates, and when you have multiple ones, you may end up paying a lot more than you could afford to. Also, if you do happen to fall behind on your payments, your credit cards will be contacted, and you may be forced to face late fees and interest charges.

Another thing that people who fall behind on their payments tend to do is buy products that will not allow them to pay their debt off over time. For instance, while many people might think that a credit card with a low interest rate is a good debt-management tool, it can actually work against you in the long-term. Since you are not actually paying off the full amount of the loan each month, the longer you fall behind, the more you will have to pay off. If you don’t pay enough to eliminate your debt over the long-term, you could find yourself paying off more interest in the long-term than you were in the short-term. By managing your debt using tools like the one we have discussed here, you can help ensure that you don’t fall behind on your bills and hurt your credit score in the process.