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How to Live a Debt Free Life as a Young Entrepreneur

drop the debtAs a 17-year-old entrepreneur consistently making over $5,000 online every month you will find it difficult to believe that at the end of every month I’ll have very little to depend on save that which I will make the following month. Yet, I don’t see myself as a careless spender because a very small percentage of my income is “carelessly” spent on personal things. The truth is the same thing is applicable to a lot of us, and it is even easier to get into debt for some of us in more developed countries – I didn’t realize this until I started to read more on how to improve my financial life and this article will be giving you tips on how to lead a debt free life as a young entrepreneur.

Know Your Priorities – Forget the Rest

A major fact many of us fail to realize is that getting rich would hardly make a difference in your financial life except you know what you’re doing.

When I was only making around $200 a month I used to think it will be easier for me to save a lot more and have enough money to use if I start making more money, and now at $5,000 online monthly I can see clearly that the more money you have, the more likely you are to spend it.

The fact is people with less money are more careful with how they spend than people with more money because people with less money understand they can’t get everything but when you start having more money you start seeing a lot of cool things you can get, you start moving with people who live “exclusive” lives, and you start spending your money like it won’t ever finish, only to have a priority listsee one day that money has wings, and that it can fly.

A great way to ensure you have enough money to spend from that which you earn every month is to know your priorities. You need to understand that you can’t get everything you see and that money shouldn’t just be spent as you have it. You need to plan your spending carefully, and this also means you have to be careful about “impulse buying“.

What is it that you really need? What is it you can’t do without? Or as an entrepreneur, what will help increase the chances of your business succeeding? These are questions you should always ask yourself.

Once you know which things are the most important to get in a given month, put them on the top of your list of what to get and try as much as you can to weed out those things that are less important.

Don’t Use a Credit Card – Only Use a Debit Card, or Nothing

Do you know that as at 2010, in the US, each card holder has an average credit card debt of at least $5,100?

Do you know that as at 2008 a single card holder has an average of 3.5 credit cards?

Do you know that as at 2011 the average APR (Annual Percentage Rate) on a new credit card offer is 14.83 percent?

destroy your credit cardsA lot of things have simplified our lives, and one such thing is our credit card, but little do we know that things like our credit cards are simplifying our present and are compounding our future.

Credit cards are attractive, in fact, they are the norm but the truth is we can do without them. It usually seems like your credit card is always there to help when you are in need of something and just can’t afford it but the question is why do you even need what you can’t afford in the first place?

Our credit cards come with a lot of hidden charges, they make it easy for us to buy things we don’t need and the end result of this is us going into debt at the very first chance possible. Instead of having a credit card, why not restrict yourself to buying only what you can afford and why not save what you’ll otherwise be paying as interest?

If you want a card at all means, maybe to pay for online purchases and do some other related things, why not get a debit card that restricts you to spending the amount you have. By having this you will be sure you owe nobody and you will be able to avoid hidden charges at all cost.

Focus on Generating More Income Instead of Reducing Your Debt

generating more incomeIt’s good not to have debt.

It’s good to look for ways to reduce your debt.

And, it’s even good to learn as much as you can regularly on being debt free.

But the fact is, how can you be debt free when you have very little to live on?

Instead of thinking always about ways to be debt free, ways to plan your income and things like that why not give more attention to earning more money? This can be in various forms, which can include selling part of your time for money, working on creating passive income streams, leveraging the power of others who have the money you need and learning about other pretty cool ways to increase your income.

It is good to manage, but it is better to create.

It will be easier for you to live a debt free life if you have enough money to spend than if you only make a fraction of what you should be making.

Have a Monthly Spending Limit

If only everybody in debt could have a monthly spending limit, it would have been very difficult for them to get into debt in the first place.

The main reason for getting into debt is living on something other than ours, and this can easily be prevented if we could learn to manage what we have.

Always ensure you limit your spending every month as much as you can, which means you should NEVER spend more than you earn in any given month.

I will personally suggest that you do your best not to spend more than 70% of your personal earnings in a single month because by so doing you will easily prevent yourself from going into debt while at the same time having enough to save.

Educate Yourself

educate yourselfThere are countless ways to prevent yourself from getting into debt but the best thing you can do is educate yourself. There is a lot of free advice online in the form of blog posts, online articles, newsletters and the likes. Ensure you subscribe to reliable blogs and newsletters. Ensure you invest your money and time into reading highly informative books on money management.

You might not have a million dollars, and you might not be able to get the best financial planner or advisor but the little information you can read on many blogs and books will save you a fortune!

73 Comments on "How to Live a Debt Free Life as a Young Entrepreneur"

  1. Roy C.C. says:

    Nice one.

    This is very important. I think the Americans need to pay close attention to this.

    I very good tips that I am going to read over and over again.

    Thank you Onibalusi for this.


    • Onibalusi says:

      Exactly Roy, not only the Americans but all developed countries using a credit card and even we without easy access to it.

      I am now able to save as much as 30 percent of my income by knowing the above tips and I hardly buy things I rarely need nowadays. I’m also feeling better about my life now (as I don’t ever have to worry about not having money) and I see my future crying EARN MORE SPEND LESS (which I think is a good sign).

      I’m really glad you loved the post!

  2. Tom says:

    You’re exactly right! we need to sit down and look at our own habits so we don’t pay someone extra money.

    I’ve never been a fan of having debt and if I do use my credit card I pay off my debt when it’s due.

    If you owe extra charges on your credit card, you might as well give the money to a stranger on the street because that’s exactly what you do when you pay finance charges.

    I also like you list, things we need. Thkishelps to focus on what you need and not what you want.


    • Onibalusi says:

      I totally love your point about it being like you dashing money to strangers on the street and the funny thing about giving strangers money is that you control that and it will hardly affect you but you have no control whatsoever of most of these credit card charges. There is really no point in having something you will otherwise purchase on credit.

  3. ragunath says:

    Awesome Post Oni! Every one must Read this one!

    • Onibalusi says:

      I thought the same thing when I was writing it. I’m really glad you loved it!

      • gaurav | making money online says:

        yes really awesome post

    • gaurav | making money online says:

      thanks ragunath

      this post is really awesome

  4. Like always on the point. I think you’re very correct. Sometimes I too think about it. When I was earning less still I was able to manage my spendings and now I’m earning more but still same situation. I mean I hardly make any saving. Solution is one I have to think what is important and neccessary spendings for me and should avoid rest spendings.

    • Onibalusi says:

      I’m really glad you got my point. You don’t need to earn more money to live sufficiently. You only need to learn to manage the little you’re earning.

  5. hmcahyo-belajar inggris says:

    thank for the tips… it’s very useful for us/

  6. Football Cash Without Betting says:

    you really made a important point in your post about the use of debit cards instead of credit card. using credit cards just help the owner get into debt they find add to get out of. i was very surprise when i heard that credit card owner sometimes have more than 5 credit cards just to meet up with there expenses

  7. LoveChic says:

    Everyhting what is written here is about me as now I have to pay out my mortgage and I need to save every dollar that I have and I understood that in fact I need so few things in my life and I can do without lots of things in my life. 1005 right that we need to know our priority!

    • Onibalusi says:

      I’m really glad this article could impact you and I hope you get your mortgage cleared soon. In the meantime I’d recommend you read the book “The Money Secret” by Rob Parsons for more information on how to get out of debt.

  8. Fisayo says:

    I love the part about focusing on generating more income rather than how to reduce the debts.

    P.S. Generally, I think the internet (there are ads everywhere you look), copywriters, advertisers and marketers (they are so good at what they do) are to blame for rising credit card debts 🙂

    • Onibalusi says:

      Aha, I agree with you at marketers knowing what they do 🙂

  9. good post oni. I have debts on my credit card and I need to be more careful!

    • Onibalusi says:

      Aha, I hope this post helps you.

  10. Tarrum says:

    Well, when I was earning $0, I thought of all the things I could buy to help me. Now that I’m earning a lot, I find it really hard to give that money away for useless things and only, but only try to use it for the basic stuff. I’ve also decided to change a few things – no more sweet stuff, candies and chips – it wasn’t a lot monthly, but now I spend that time & money in the gym.

    So yeah, money is a really risky thing when you don’t plan anything. And in my country, well use credit cards, spending more than we have just makes no sense.

    • Onibalusi says:

      That’s really great to hear 🙂

  11. Nice Story!, I like the part on concentrating on making more money rather than spending too much time getting back to zero. ;]

    All the best,

    David Edwards

    • Onibalusi says:

      I’m really glad you loved it David!

      Thanks so much and have a great day!

  12. i especially liked the thought that we have to focus on earning more instead of focusing of how to get rid of the debts! i believe this psychologically plays a great role in our conscious.

    • Onibalusi says:

      Sure! How can you live on $100 a month without going into debt? Focus on earning more and you will have a great potential of reducing your debt.

  13. dee oneal says:

    I definitely agree with you! Wow, it’s hard to believe that you are a young one but then you are so I’m hoping that those teens out there would be like you. Oh well, it’s really a hard thing to actually lessen your spending most especially if you know that you are earning well although you can limit it. I agree that you should know your priorities and learn to separate your needs from your wants since money is hard to earn so we don’t want to just waste it and sorry in the end.

    • Onibalusi says:

      Aha, thanks so much for the compliments!

  14. ikenna says:

    Quite insightful. It really matters for one to prioritize ones spending.. I’ll always go for a debitcard.

  15. DiNaRa says:

    As usual, great post from you, Oni. I have my own strategy dealing with my money and savings – after getting each salary (or some other incomes) I save about 15% of it. All the rest I spend as I wish. But I will never take these 15% only in case of ‘life and death’. Hope it will never happen and I will be able to save for what I’m going to buy in the end.

    • Onibalusi says:

      Aha, I’m really glad to hear that and it’s very certain it will be difficult for you to go into debt 🙂

  16. PauliusR says:

    Great read Onibalusi. All those facts you’ve put in front about Americans and their average debts are mind-blowing. The topic has to be discussed over and over again.

    There might be many valid reasons why people get into debts, but I’m sure there are some people who spend more than their monthly income on casualties and stuff and that is what I don’t understand.

    My income has increased significantly in recent years, but I can’t say that I’ve started living a different life. To live high is fun for a while, but achieving long-term goals is a lot more delightful.

    I have a credit card, but I have never payed a percentage for my banker, just the annual charge. I’m sure that 90% of credit card users doesn’t actually need it, as you said, debit card will do the same job for many of them.

    However, at least one credit card is a must in my family, because without it, I would get in trouble when booking cheap flights, renting cars in foreign countries and similar things. I use credit card around 5 times a year and there is no other option.

    • Onibalusi says:

      You’re right about that and it seems you’re very good at managing your credit card.

      Thanks so much and have a great day,

  17. Excellent tips, Onibalusi! My new friend, Stella Anokam, recommended your blog and I’m blown away by all the valuable info you share. I downloaded your free eBook right away and absolutely loved it!

    I totally agree about using cash and debit rather than credit cards. Credit cards aren’t popular here in the Central Andes of Peru, so I’ve been forced to use cash everywhere and it has made a world of a difference! I also love the idea of having monthly spending limits! That helps us budget better.

    Great post, Onibalusi! Looking forward to learning more and to staying in touch! =)

    • Onibalusi says:

      Hi Samantha,

      I’m so glad to hear that and I’m more than happy to have you as a reader 🙂

      You’re right about the monthly spending limits and by implementing it this month I was able to save enough money to last me for a whole month even if I didn’t earn any.

      Thanks so much and have a great day,

  18. Bojan says:

    Best thing in preventing debt is not getting into one. I would sum entire of this article in one sentence:

    Don’t spend, what you didn’t earn.

  19. The Debt concept is very simple. When someone spends more than he OR she actually makes, they fall into the debt trap. The key to stay away from this is to be able to change your life style whenever it’s required. Thanks for the tips

    • Onibalusi says:

      I couldn’t say it more than that 🙂

  20. gaurav | making money online says:

    very useful… really a good information…

    thanks a lot….

  21. red says:

    We can open business to make much money and free from debt.

  22. At 17 you are already earning that much? Wow! That is really sweet. I hope I can do that online every month as well. You got yourself a great talent in writing Oni. I have been reading some of your old posts.

    I totally believe that the lesser your money the fewer expenses you are going to make. But with much money you are likely to spend on so many things. Wants will over flow. Thanks for sharing my friend.

    • Onibalusi says:

      I’m really glad you loved my posts and I’m so glad this one could help you too.

      Thanks so much and have a great day!

      • Ernest @ unique wedding favors says:

        Sure Oni! Most posts that I read really mke sense to me. You have a good one yourself. Thanks a lot!

  23. I was really impressed of the tips that you gave Oni. I’m kinda guilty also because I am an impulsive buyer. It’s good to read blogs like this, it’s an eye opener for us.

    • Onibalusi says:

      I’m glad you gained from this article and I’m sure you’ll make the best use of it.

  24. Awesome Article Oni and it’s great to know that a Young Entrepreneur like yourself sees the value in Financial Intelligence.

    I have found that in all cases, more money is never the solution whether you’re an entrepreneur or an employee, IF you have no financial intelligence.


    Because regardless of how much you make, if you have no concept of how money really works, more often than not people will spend more than what they earn.

    Im not a huge fan of budgets. Personally, I dont think they work and feel like they create an unconscious mindset of scarcity rather than abundance. I do however, pay myself first with all income I receive and put that money straight to work for me in my investment account. ALl else, is used for Business, living expenses, saving, etc.

    You definitely had some great points here Oni! I’m looking forward to seeing you progress in building your Financial IQ 🙂

    • Onibalusi says:

      Aha Hector,

      It’s one thing to make money and it’s another to manage it. In fact, having little money and managing it well is better than having a lot and not managing it well. I’ll sure invest a lot into improving my Financial IQ 🙂

  25. Jake @ Fort Wayne Internet Marketing says:

    Thanks Oni, these are very useful tips. I always keep my money in the bank and keep a daily budget just enough for me to survive the week LOL! This gives me enough savings to treat myself after 4 months and send money to my parents every week 🙂

    • Onibalusi says:

      That’s really awesome to hear and it seems you know how to plan things well 🙂

  26. It helps me a lot setting up a spending limit and moving the rest of the income to a savings account. So I only count with what I have in the current account. I have two kids so I can’t reduce the monthly spend that much 😉

  27. Chidi says:

    Beautiful piece.This goes not only for countries applying credit cards but for all. You must learn to think and act lucratively. Be able to convert liabilities into assets. if you must go on credit (OPP) then it should be to create more wealth and increase your assets.
    Nice one Oni!!

  28. great post mann

  29. Atlanta Psychiatrist says:

    I like your suggestion on Don’t Use a Credit Card – Only Use a Debit Card, or Nothing … true to this.. I need to stop abusing my credit cards… and learn to use the money I have in the bank.
    you are an inspiration to me mate. Congrats on your success as a 17yr old marketer.

  30. Once again a young dynamic entrepreneur is on it. Oni never fails to strick at the right time. One might say this has nothing to do with me since am not rich. But i tell you the pour spends much unnecessary. Great for advanced country also.

  31. More Control says:

    I agree, having a monthly spending limit and focusing on acquiring additional funds as opposed to sole working on reducing costs is definitely the way live debt free. Many people when they first get credit cards falls into the trap of spending everything right away rack up a bad credit rating.


  32. Miriam says:

    I like the point you make of focusing on increasing your income instead of focusing on decreasing your debt though I think you should focus on both to reap larger profits.

  33. This is really a great article. You used to start more luxorious lifestyle once you start getting more money. You wrote that you don’t spend on your personnal things and I checked your Article at http://www.youngprepro.com/april-2011-report/ where you mentioned a very little expenses on webhosting and other technical part then where the most of the money goes. I really liked your article and it will be a lesson for the people to start saving money for the future.

  34. My income goes directly to my bank account. I only use my credit card for buying things I need for a month. I set the limit just enough to for my needs so I won’t be spending much. This works for me and I can save almost half of my income every month 🙂

  35. Some times , I wonder whether credit card is more of a disadvantage than an advantage, We can not deny the fact that credit card system has brought in much progress to the economy, In fact it is hard for the economy to thrive without credit system, but my point of arguing for the credit card is that ” If an individual can apply enough discretion, then, He / She will greatly benefit more from credit card system than the debit card”.

  36. Daniel says:

    Nice article. You seem to have an old head on your shoulders for such a young chap! fair play to you!

  37. I just learned than blogging is really a great job and good business if you just know how to do it. Thanks for sharing Mr. Onibalusi

  38. I only have limited cash in my wallet. I usually use credit card for shopping. It’s more effective and efficient because I could manage the limit. 😉

  39. Credit has it’s value if you know how to leverage it properly

    Also, I get 1% cash back + extra bonuses for buying specific things from using my CC

  40. Ron says:

    if you cannot afford to pay for it now, you probably will not be able to pay for it later..especially with interest..thanks for a great article..
    Congratulations on your achievements thus far..keep on keepin on!

  41. HP CE278a says:

    The simple financial dogma: don’t live beyond your means.

  42. I’ gotta lot to learn from you. my goodness you are only 17…

  43. Yanna Felix says:

    That’s precisely true! Often than not we neglect the idea that money should be spend on necessities. We should forget or limit ourselves in spending on wants. There’s no harm in being a wise man but we always get blind simply because if we have money we always think on how to spend them.

  44. Danielle @ Clickbank Auto Profits says:

    I think another point is that when starting an online business don’t fall into the trap of spending more than you can afford or racking up credit card debt to be able to start your business. I think it is very easy to think “well I need this to make money and then I will pay it right off…” but the truth is you don’t have to have money to make money online. Yes, it makes things a lot easier but there are so many stories of people who made it big by starting with bum marketing techniques and no budget. So try not to use this as a rationalization!

    Thanks for sharing these tips with everyone!

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    Please Please i need it… can anyone help me… my site traffic come to 5-10 visits daily from 1000-3000 visits in a day… please help me

  46. I agree! We must set our priorities. We should have a plan, and we need to stick to that plan no matter what. We should avoid any distractions, be it be a positive or negative distractions. Great article, I included this post on my list of best personal finance articles on the web in my blog.


Welcome! I'm Bamidele Onibalusi, a young writer and blogger. I believe writers are unique and highly talented individuals that should be given the respect they deserve. This blog offers practical advice to help you become truly in charge of your writing career.

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