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4 secrets of debt-free people

For many people today, debt is an unavoidable reality. If you count yourself among those who owe money towards tuition, credit cards, mortgages and other loans, you definitely aren't alone. According to a report from the PEW Charitable Trusts, 80 percent of Americans were in debt as of 2015. Almost 70 percent of those surveyed were carrying non-mortgage related debt, and many said they planned to be paying off debt well into retirement.

But while the bulk of Americans owe substantial amounts, 20 percent of consumers are living debt-free. Most of these people didn't grow up wealthy or score a winning scratch ticket - they're simply savvy when it comes to spending and saving their hard-earned cash.

Interested in freeing yourself from beneath that mountain of bills? Check out these four secrets of debt-free people:

1. They check their bank statements ... thoroughly
When it comes to finances, the devil is in the details. Relatively small recurring charges that you may not notice can snowball over time, gradually draining large sums of money you could have put toward debt and savings. People who avoid falling into debt understand this, and take preventative measures to make sure they know exactly what is going in and out of their accounts.

Market Watch recommended going over every bank statement carefully, looking for any charges you don't understand or remember agreeing to. Being forced to look at all the transactions you make each month can also help you tighten your spending habits, allowing you to focus on repaying debt.

2. They use cash
If you feel like you're spending real money, you'll be less likely to spend real money. It's as simple as that. Forbes Magazine contributor Renee Sylvestre-Williams explained that people who live without debt are more likely to pay using cold, hard cash. Swiping a credit card or using an app to pay might be convenient, but when your budget is out of sight, it's out of mind, which puts you at risk for overspending. When taking out cash, remember to use ATMs that don't charge you any fees, or ask for cash back at stores that offer that service.

3. They pretend to make lower salaries
Take a look at your income. Could you still afford a nice lifestyle if you made $5,000 less per year? How about $10,000? If you're making more than enough to squeak by, chances are that you could still be comfortable with a reduction to so-called "disposable" income.

Credit.com contributor AJ Smith recommended examining your finances and drawing up budgets to see what your life would be like if you made 20 to 50 percent less of your actual income. If the numbers are doable, try living within a lower income bracket, and put the extra money toward paying off debt. If you have difficulty not spending your entire paycheck soon after its issued, make sure to transfer the "extra" income out of your primary checking account.

4. They don't take on debt lightly
People who live debt free are often able to do so because they don't saddle themselves with debt in the first place. Not signing up for multiple credit cards, attending less-expensive colleges and paying for cars with cash are all habits of debt-free individuals.

Of course, there are times when accruing debt is necessary, whether it's to make a major investment or to build credit. In these situations, savvy spenders do their homework before they sign. Whether you're considering applying for graduate school loans or switching from renting to paying a mortgage, Sylvestre-Williams suggested consulting with financial experts before collecting more debt.

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