8 Important Differences Between Those With Debt and Those Without

8 Important Differences Between Those With Debt and Those Without
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There are two types of people in the world: those with consumer debt and those without. While many of the differences in behavior are subtle, the differences in results are staggering.


Considering the amount of stress and serious financial struggles that debt can cause, it’s important to be knowledgeable about this topic.  Do you tend to lean toward the behaviors of a debtor or those of someone without debt?

If you are currently adopting debtor behaviors, changing your behavior in several small ways will enable you to become the type of person that avoids debt naturally and easily.

Consider these differences:

1. Debtors spend more than they earn. It’s difficult to get yourself into debt if you spend less than you make. It doesn’t matter whether your salary is $25k or $250k. If you spend more than you earn, you’re going to wind up in debt.

2. Debtors use money to make themselves feel better. A big part of getting into debt is purchasing services and products you don’t need.

3. Debtors avoid the use of cash. You can’t get into debt if you only use cash. That assumes you’re not borrowing cash from others! Commit to using cash as much as possible. It’s a little harder psychologically to hand over $100 than it is to spend $100 on your debit or credit card.

4. Debtors are poor savers. Only those that make an effort to save are rewarded with a growing savings account. Save a percentage of each paycheck before paying your bills.

5. Debtors try to be lucky. Those that accumulate debt hope and plan for the best. Those without debt plan for the worst. When the worst happens, debtors face real financial challenges. Those without debt have the necessary funds in place to find a solution. With an emergency fund, it can be easy to handle being unlucky.

6. Debtors lack a long-term plan. Staying out of debt requires a plan. Eliminating debt requires a plan. Getting into debt doesn’t require a plan. Having long-term financial goals is enough to keep debt from entering your life. Create a feasible plan and stick to it.

7. Debtors lack self-control. In fact, self-control is the root of many debt issues. Learn to deny yourself that which you don’t require. Before making any purchase, ask yourself whether the item is something you need or merely something you want. Does it fit into your budget?

8. Debtors avoid their bills. You’ll notice that people with debt open all their mail, except their bills. It’s only after the mail has sat for a week or more that the bills are finally acknowledged. Those without debt are very conscientious about paying their bills in a timely manner.

Is debt detracting from your life? Focus on the habits of those that avoid debt like the plague. Successful people leave clues that allow the rest of us to become equally as successful. Study your friends that are able to avoid debt. What can you learn from them? Small changes can make a big difference.

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As seen in Forbes Magazine, Karla Dennis is an expert tax and business strategist. As an enrolled agent, Karla is licensed to represent taxpayers in all 50 states. She holds a Masters in Taxation and Business Development and is the author of two books, Tax Storm and Against the Odds.

Karla, CEO of consultancy firm Karla Dennis And Associates, Inc.™, has saved her clients thousands of dollars and has been featured in various media outlets such as Forbes, MSNBC, KTLA, Yahoo! Finance, and SmartMoney, marking her as the ultimate tax expert.

As of 2014, Karla became the new host on the “Mind Your Business” radio show, KTLK AM 1150, sharing her financial and business knowledge with the greater Orange County and Los Angeles areas. As a supporter of women’s rights and issues, Karla is part of the Women Network, an organization built to educate and mentor women. In addition, Karla is the radio host for Women Network Radio, a show that aims to uplift and empower women of all walks of life.

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