I've written a lot about becoming debt free. Soon I will have met that goal. It sounds as if many Get Rich Slowly readers are also nearing this state, too. A lot of people have begun to ask me for advice about living debt free.

On one level, I assume that becoming and living debt free require a similar skill set. I suppose that it's natural for each of us to relax a little once we've paid off our debts, to allow ourselves a few more indulgences (though paid with cash rather than credit). I wonder if there are other techniques one can use to live debt free. Are any of you doing this now? What suggestions can you offer?

One thing that springs to mind is Dave Ramsey's Drive Free, Retire Rich presentation. I just watched that again yesterday, and it renewed my resolve to wait before purchasing a new car.

An abundant emergency fund seems like a natural fit, too, as well as fully funding retirement accounts.

Any other ideas on how to live debt free?

The only debt I have is for my mortgage.

I just buy stuff I need. If I don't need it, I don't buy it. If I can't pay for it, I don't buy it. I don't really use a budget, because I try to live simply. If I do look to increase spending (e.g. when we upsized our home), I run the numbers. I have a budget, but it's a guide, not a prescription.

I have a good emergency fund, which, if I needed it to do so, would cover up to a year of expenses. I've only ever needed to use my emergency fund once, in 2001, when the market crashed, there was no work in high tech to be had and I was struck with illness. However, when I recovered, I tripled the fund and then some.

I think the best thing once you are debt free is to to live as you were doing for debt reduction. You don't want lifestyle inflation to take over. Assuming you are adequately funding retirement, take the money you were using for debt reduction and put it towards a a mid term goal (car, house etc).

Often, increased earnings come with increased trappings. I think it's okay to have some lifestyle inflation, as long as it isn't equal to the increase in pay.

I think its hard because you have to do things in moderation. Its unlikely that you'll have the same intense financial goal again, so you have to make decisions about what to spend your money on - rather than just not spending it. Sensible can be so boring without the thrill of reaching a target.

I think its about how to manage lifestyle inflation properly, doing some but not too much. Its about emergency funds, saving up for the things that you want, investing for the long-term.

Most importantly, its about no longer focussing on money, but on living.

We've been thinking about this one since we are $14,400 away from our goal of paying off all our unsecured debt. What do we do next?? If we reach our debt paydown goal, we come away with the idea that we have $45,000 in unallocated funds to play with (our thinking is if we are able to pay off $55,000 in debt that means that we should comfortably have $45,000 in 'extra' funds. We've got a lot of ideas for that money. In no particular order: (1) fully fund our emergency fund, (2) save for a nused car for me, (3) put extra money aside for planned upcoming baby, (4) invest money in short term investments so we can build our vacation/retirement home, (5) save for new furniture/home improvement projects, (6) pay down mortgage on primary home, (7) pay down mortgage on investment home, 8. pay off mortgage for land/lot where vacation/retirement home will be located, 9. save for a nused car for husband.

Most likely we will do some combination of the above. I think its important to fully fund our emergency fund which for us (we own three investment properties) is a good size chunk of cash. We should also start an ING saving account for baby expenses since we are moving towards having a baby. I also really want to buy a nused car next year but want to pay cash for it (I've started an ING savings account).

We plan to continue fully funding our 401k accounts and we also will put $8000 aside to fully fund IRAs for both of us next year.

I want to continue living a debt free life once we are debt free. My husband and I talk about the rules for this new life. For example, if we had some Home Depot expenses would we want to put it on a Home Depot credit card when HD is running a 0% for a year special, and then put cash aside each month in a high yield savings account to earn interest on our cash while letting the 0% ride until pay off date? What about a car purchase, if I save up $10,000 by June of 2008 for a $20,000 car purchase and my car dies or gets too expensive to fix could I go out and buy a $20,000 car with my $10,000 down payment and finance the remaining but pay it off in 6 months?

I am debt free. I have no credit cards. I own both of my cars. And I have a house worth around $400,000 and it's fully paid off.

I'm 37 years old.

I can't begin to describe how great it feels to know that I am living within my means, and to me that's what drives me to stay away from debt as much as I do. For me, all it takes is me reminding myself that not having a huge monthly nut to cover means that I am not tied down to my job. I find it easy to pay my bills on one salary (my wife no longer works). We don't worry about money to pay the bills (although I'm now obsessing a bit over retirement savings). And I am taking the money I would have been using to pay off my house, credit cards, and car payments and investing it once a week into our IRAs, mutual funds, and savings account.

Everyone else I know has huge debts and they all tell me how they can't afford to save. When I suggest that by eliminating their debt they could have lots of money left over they just stare at me as if I'm insane.

My brother bought his house around the same time as we bought our old house and he still lives in an 1100 square foot house for which he pays $1500 a month in mortgage. He paid $160,000 and the house is now valued at over $500,000. He has about $100,000 left to pay off. I tell him he could sell his house and move to a cheaper area and he could be rid of his payments and quit the job he hates, but he just doesn't see it.

Having lived on the other side, I can't imagine ever wanting to go back to the debt I once had.

I think it's important to set new financial goals for yourself every year. Think of it as a New Year's resolution. Instead of trying to maintain a state of being debt-free, strive to improve it... raise your net worth. That can keep you motivated and aware of your fiscal habits.

I'm not in debt, and yes, that's what I do... I sort of estimated a monthly budget for myself and projected it out for one year to determine a reasonable amount I could save. Set that as my baseline, and proceeded to work towards it every month. Since I use one credit card for everything (and pay it off in full every month), I can easily monitor my expenses. If I feel that I've been too loose one month, I resolve to tighten it up the next. So far it's been working out decently. I will be just about where I want to be come December 31, maybe a little short, but I'll give myself that margin of error since I just rounded up during my goal planning, the markets haven't been so hot, and I didn't account for a few lavish gifts for my parents when I first came up with my budget... =]

Absolutely agree. Your financial goals should never end. You should always have a goal list that you're tracking and working towards so as soon as you're out of debt that money should transfer to the next goal on your list. Goals should be reviewed every 3-6 months to make sure you're on the path you really want to be on.

You guys are awesome.

I third or fourth the suggestion to keep setting new goals. When I paid off my credit card debt, I started saving to buy a car with cash, which I did. Once that was done my goal was to save for at least a 20 percent downpayment on a house--and if I'd had my druthers I would have paid for the house with cash, but that would have meant renting for another 10 years or so, and my girlfriend really wanted a house...sometimes you just have to make compromises

Now I have by far the biggest debt I've ever had (about $290K in a mortgage), but my goal is to pay that off in a decade or less while still maximizing my retirement savings. I do have more expenses now that we have a house, and we have a few trips planned (my girlfriend's family lives in France and they're getting old so we go over every year or two, plus I'm long overdue for a trip to Ireland to play music with friends there), so I may have to be flexible in terms of those goals but they do guide my behavior. I also set goals for donating to charity; those will slip this year because of all the expenses involved in buying and setting up our house, but once things settle down I intend to contribute about 10 percent of my income to charity each year.

A good thing about maintaining goals while debt-free is that it allows you to see how much you need to get by with reasonable comfort; right now I plow most of my income into the mortgage and my retirement savings, and it's amazing how little we need to live on beyond that without feeling like we have to pinch our pennies. So this allows me to plan the next step: once the house is paid off, I intend to change jobs and/or work less. At that point I should be able to take a more than 50 percent paycut if necessary in order to do work I love doing. Happiness is way more important to me than money, and my girlfriend and I both like to live well but simply.

I second the giving goal mentioned in someone else's post. Charitable giving is already part of our budget, but being debt free will allow us to do more giving. I'd like to think about making a multiyear commitment to give a set amount each year to my favorite charity.

It's sort of amazing, looking back on the days when we watched TV, how much time we spent on that and how much we shopped. The farther away I get from the mainstream culture-- a kind of collective insanity about what's reasonable in lifestyle and spending habits-- the wealthier and usually happier I become. Living one's life hand to mouth, which is what so many unhealthy things in life, including TV and debt, are all about, is an awful way to live.

I really liked this post. I love the parsimony and elegance, and I couldn't agree more. Welcome to the forum! (I did just disagree with you on an investing thread, but as you said, to each his own.)

To cross the streams a little bit, I think money management is one of those things you can only learn by experience. Telling people in their early 20s to stay out of debt and start saving for retirement is like yelling into the wind. All the graphs and anecdotes and pithy sayings aren't worth spit when the person you're talking to doesn't want to listen. There are some lessons that you just have to learn the hard way.

My mom certainly tried to teach me about money when I was growing up. She told me about the 10% plan and compound interest and even went so far as to set up a bank account for me, but it didn't matter because when I was in highschool I fully expected to die before I was 30.

But I was lucky. I was so bad with money, I got into debt doing a paper route. That experience of being in debt as a kid, even though it was only around $700, immunized me against ever going into debt again. I hated the feeling of owing someone money, and knowing that even if I paid $X per month it would take years to pay off.

Because of that experience the only time I've been in debt as an adult was when I wrecked my car, and decided to go into my line of credit a little to get a really good car that would last a long time. And even though I didn't get serious about saving until I read The Wealthy Barber a year and a half ago, aside from the one time I've always had a positive bank balance.

Maybe part of the lesson is getting out of debt, and experiencing the huge sense of relief. Whatever the reason, I think the earlier you get burned the better off you are. A lot of people go into debt in college and take years to get out from under it, but once they do they stay out. If you keep piling up consumer debt as an adult and add on to your mortgage via HELOCs, refis or just "trading up" to a more expensive house, it may not matter whether you ever learn the lesson because by that point you're in too deep to really fix it.

If I were running a personal finance course in highschool, I'd try to get all of my students credit cards with $500 limits. Let them learn the lesson of debt with a small amount of money when they're young, so they don't waste more time and money learning it later.