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Is Being Debt Free the New Rich?

have you ever considered “is being debt free the new rich?”

The world of credit is wildly popular – and dangerous. Maxed-out cards, unpaid loans, and money concerns may have some asking questions.

Want a jet ski? Use a credit card. Brand new car? Credit. Or even simpler purchases, like groceries – credit for that, too.

Being debt-free is trendy now, and there are a lot of pros to this lifestyle. But what are the downsides?

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Though people have bought into credit card schemes for some time, they may want to flip the tables and find out what life is like without it. Is being debt-free the new rich?

And if it is, how do you get there? To see if it’s time for a financial change, read on. 

What’s a Typical Financial Scenario?

Credit cards haven’t always been around, but they’ve been pretty popular for quite some time now. Because of these and other loans, carrying debt around for years is not just common but expected. 

Before we get into all the particulars, what is typical today in America? Hint: being debt-free is not normal. Check out what most of your neighbors, friends, and acquaintances are dealing with financially.

Credit Card Debt

The normal amount of debt for an American family is a little over $6000.00 on credit cards. American life seems to thrive on debt.

People love to spend with plastic. It’s fast, it’s easy, and there’s no waiting for money. You just swipe the card, and you can have what you want.

Since credit card debt is now considered “normal,” it’s easier than ever to get into debt and keep your payments for a long time. After all, now is better, right?

Looking Rich but Being Broke

Due to the current credit card craze in America, there are some serious fake rich situations. Because of credit, people can “buy” pretty much anything.

This leads to looking rich but being broke in reality. Designer shoes, clothes, and fancy haircuts are everywhere. Just keeping up with the trends is costing people a fortune.

And it’s messing with our values. When people are more concerned about looking rich than actually having money, there’s a problem.

This way of living conveys that people don’t care about how things really are, as long as they look good on the outside. This can negatively change the way we view others and ourselves.

High Payments

Monthly payments are everywhere. Buying something full price isn’t always the case anymore.

Instead, it’s common to make monthly payments over time to pay for an expensive item or even a costly mortgage. But there’s a problem.

If you buy something with a high monthly payment, guess what? You’ll be paying it off for a long, long time. It may feel like you’re never free of it, even when the purchase is no longer exciting or valuable.

But one thing is certain: debts will be collected. So you’ll keep paying and paying and paying for many years.

What is Debt-Free?

All of this credit card debt paints a pretty grim picture. Is there a better way?

Debt-free means that you don’t owe anything to anyone. No part of your paycheck goes towards paying off something because you buy it full price one time.

There is no payment process or monthly costs. Because of this, people are asking, is being debt-free the new rich?

What Does it Look Like to Have No Debt?

Having no debt is definitely out of the norm so it may be difficult to visualize. If you’re debt-free, it means:

No Loans

As a debt-free person, you don’t have any auto or personal loans. You own your vehicle completely, with no payments for a large loan each month.

When you make a big purchase, you save up and pay the whole thing right then. You aren’t paying off any personal loans that you took out to buy something.

That means that you’re only responsible for maintenance, insurance, and daily bills. You get to skip the car loan, the RV loan, the computer loan, the TV loan, etc. Your bills are lower, and you don’t have to think about debt.

No Credit Card Payments

Debt-free people do not make credit card payments because they don’t have any credit card debt. They may still use a credit card and pay it off in full each month, but they don’t carry a balance.

Not having anything to pay off means you don’t need to spend as much each month. This will give you plenty of extra for savings and investments, as you’ll have more cash.

No House Payment

This is a very extreme part of being debt-free, but you must pay off your house completely to truly have no debt payments.

When the mortgage payment stops coming each month because it’s gone, you have no house debt. When you don’t owe anything to anyone, you are on your way to being rich.

Related: What You Still Have to Pay Even Without a Mortgage

Getting rid of this enormous bill each month is a total game-changer. Your home is paid off! No mortgage and you will always have somewhere to live, no matter what.

There’s so much freedom with this that it deserves its own article. Living with no mortgage is a whole different world.

Why Does Being Debt-Free Matter?

There are many reasons why being debt-free is a good idea. You don’t have to think about payments as often, for starters.

You feel more freedom because you don’t need to pay tons of money for bills constantly. The pros can help us answer the question, is being debt-free the new rich? 


Peace of Mind

When you don’t owe money, you can relax. You will not find yourself working overtime to pay off things that you shouldn’t have bought in the first place.

You’re free to save up for the items you want and then forget about the payments. Because of this, you can experience great peace of mind and no extra debt. 

Able to Afford Your Lifestyle

Some people are incredibly stressed, trying to look like they can afford things that they can’t. That new TV or designer handbag can quickly become a trap.

But if you are debt-free, that means you’re able to afford your lifestyle, which is fantastic and a huge relief.

While you may not always have the nicest things immediately, you always know that the things you own are yours. And you don’t have to pay for them anymore.

You Don’t Overpay

You don’t have to overpay when you don’t have any debt that you’re bringing along with you in life. Since you haven’t borrowed any money, you aren’t having to pay it back in addition to interest.

Interest can really add up and cost you thousands or more, so it’s best to avoid it entirely. People that are debt-free understand how much interest can throw off their plans, so they stay far away from it. Paying more than necessary is a bad financial plan.

You Don’t Have to Keep Up

While you may feel a little excluded when saving up for things instead of buying into the pay later mentality, you also don’t have to keep up.

Did your neighbor get a new car? Good for him. It doesn’t mean you need one.

When you commit to living debt-free, you don’t have to worry about buying things to impress others or to help your self-esteem. 

Being debt-free is so great for your mental health that you will not want to go back. You can be happy for others when they have nice things. You can also be content about what you have, knowing that your lifestyle is affordable and keeping up with others is an illusion.


Not having the newest things all the time

You will not have every new item immediately when you choose to live debt-free. That’s because you’ll be saving up for things to pay for them once, and then never again.

So when that brand new laptop comes out, others may rush to the store, but you’ll be hoarding cash in a savings account. 

This isn’t too bad of a thing because it helps you be patient and keeps you from going into debt. So yes, you may have to wait a while for things, but that doesn’t mean that you’ll miss out entirely. 

Possibly looking like you aren’t rich

Is being debt-free the new rich? Maybe. But that doesn’t mean it will look like it is.

The chances are, you’ll look pretty…normal. It’s just that everything you own is paid for, and there’s no extra stress associated with debt. 

So yes, being debt-free can make you look like you aren’t rich, especially if you aren’t willing to live above your means.

But the good news is, this can help you in many ways. You don’t have to keep up or live with a shallow mentality focused on material items.

Is Being Debt-Free the New Rich?

The big question. Is being debt-free the new rich? Does living without payments, in fact, mean that you have more money and are better off financially?

For the most part, I’d say yes. But there’s more to it than living without payments. Here’s what it looks like to live debt-free.

Might Not Look Rich but No Payments

Sure, being debt-free may look normal on the outside, with an average house, an older car, and clothes that aren’t brand new. But guess what? You own all of it!

Any money you make goes straight towards your goals – retirement, savings, and things you value. It is no longer important to think about what others have, and you can focus entirely on what you want with money. This can make you feel pretty wealthy.

Related: Essential Wealth-Building Habits

Focuses on How You Feel Not How Things Look

That leads to the next point. Being debt-free creates a mentality of freedom and peace focused on security with money, not security with things.

The items you own aren’t what you focus on. Instead, you can turn your attention to your bank account and growing that as large as possible.

Basically, being debt-free gets all the nonsense out of the way so you can really achieve as much as possible financially. You won’t be held back by any payments, and you can reach your goals faster.

Full Control of Your Assets

Not having debt is outstanding, but if you don’t have any assets, you aren’t rich. Assets are things like homes, investments, and anything that goes up in value or brings you money.

The more stuff like this you can acquire, debt-free, the richer you actually are. So while you are becoming debt-free, you should also focus on creating more income and buying assets that appreciate.

Related: Income Streams All Millionaires Have

That way, you’re not at zero when you become debt-free. Instead, you’ll have money in many places. Seek to own assets that don’t own you.

What do you need to be debt-free and rich?

There are a few things that are needed for you to consider yourself debt-free. First of all, you should not owe anyone anything.

That doesn’t mean you don’t pay your electricity bill. Regular bills for basic needs are not debt. But things like credit card payments, loans, and mortgages all need to be gone for you to truly be debt-free.

Next, you need to have money. How much is a matter of preference, but the amount should be growing and afford you a retirement that you are comfortable with.

You should own assets free and clear and be continuously making and keeping your money.

Is Being Debt Free the New Rich? –Conclusion

Is being debt-free the new rich? Yes, as long as you have money and assets, in addition to no debts. Living loan-free is a fantastic way to stay financially secure, and it is possible for anyone. 

While there are a couple of downsides to being debt-free, they are minimal. For the most part, being debt-free is an incredible advantage.

You can achieve it by working hard to pay off debts and then building up income and assets over a period of time.

Remember that being debt-free is only half the answer. You still need to have a high net worth to be considered wealthy, and you can do it with some time and focus.

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