I’ll never forget a conversation I had with an acquaintance many years ago. We had been talking about money and debt, and she said, “well, you have to have debt if you have three kids.” I didn’t really engage, but I remember being taken aback, if not completely surprised by the comment.

Yes, debt-free living is possible

Why do people convince themselves they must rack up debt to live a good life? I think it’s because we live in an immediate gratification culture, and one where we’ve confused wants versus needs. We justify expenses to ourselves, saying that they’re important, yet we don’t have the money to pay for those important things in the first place. And no, this is not a “millenial problem.”

Our parents and their parents and their parents’ parents all lived in cultures where having debt was perfectly normal, if not encouraged. And while we can blame it on wars, or on recessions, the truth is that at the end of the day, it’s usually our own fault that we end up spending money we don’t have. More often than not, we could have made different choices.

How to live debt-free

Living debt-free is simple: purchase your food and pay your bills. If you have money left over, donate some. If you still have some money left over, save some. And if you still have money after all of that, that’s when you purchase the extras. And yes, a university education is an extra. Save the money first. Attend university when you can pay for it out-of-pocket, so you don’t start your adult life already under a mountain of debt.

Learn to be frugal when you’re not making a lot of money, or get an extra job for pay for the extras. Don’t be afraid to buy things second hand. It saves you money and helps the environment. Don’t be afraid to accept hand-me-downs. Buy your cars used and cheap.

Get rid of debt you already have—and don’t make more

Let go of the idea that you must have debt to live a fulfilling life. If you do have debt and you’re living paycheque to paycheque, remember you’re one job loss away from disaster. Change the tune now. Pay off the debts, and don’t make any more. Be sure debt repayment is your first priority after paying your rent, bills, and buying your food. And once you’ve paid off the debt, don’t make more debt. As Dave Ramsey says, “stop spending money you don’t have, to buy things you don’t need, to impress people you don’t like.” Remember to spend your money on what’s important to you, and to only spend money you’ve already earned.

If you’re making debt because you’re not making enough to get by, use the resources available to you: food banks, gifting groups, clothing exchanges and depots, and the generosity of your community. Then be on the lookout for work you can do to supplement your income. Yes, I realize that for people on disability this is not always an option. Again, if that’s the case, make use of the resources available to you—don’t be afraid to reach out and show vulnerability.

Credit Cards aren’t evil if you know how to use them

Many money management gurus will tell you not to use credit cards at all, to cut them up and swear them off for life. I don’t subscribe to this way of thinking. I’ve had a credit card since I was in my 20s, and I have never carried a balance past the payment date. I missed a payment exactly twice due to oversight, and both times I talked to the credit card company and wasn’t charged the interest.

Having a credit card is convenient and can offer you rewards. My credit card paid me over $600 last year, as it’s a cash back card. I outfitted our whole apartment in London with that cheque. Now, if you can’t control yourself, you refuse to create a budget, and you just put everything you like on a credit card even when you don’t have the money to pay it off, then yes. Cut up the credit card and pay for everything with debit or cash.

To recap: no, you don’t have to live a life full of debt. Only spend money you already have. Understand the difference between wants and needs. Don’t justify purchases when you don’t have the money. Set aside savings to cover unexpected expenses. Say no to too much credit, and pay off credit cards at the end of every month.

Best of luck on the debt-free living journey.