When you hear the word, “millennial” you probably think of a few things and among the top is probably the gross amount of debt facing more young people than any other generation.  With student-loan debt being the biggest source of debt for young people, it is hard to think that twentysomethings will be able to build a good life for themselves, let alone manage the bills and payments they have. But take it from a millennial who is debt-free: anything is possible.

Here are a few tips I incorporated into my finances to become debt-free and financially sound.

1.) Don’t take on more debt than you have to.  This means you, credit card debt! Never, ever, EVER pay for something on a credit card that you won’t pay off in full right away. This means, don’t get stuck simply paying the minimum payment on a credit card bill and accruing more debt. If you aren’t willing to fork over the cash right then and there why would you make a different decision with a credit card? That deal that you just scored suddenly becomes not-so-hot when you only pay the minimum on your credit card bill and the interest rate basically brings that sale item back to regular price, or even higher! If you can’t pay off credit card bills in full, then you simply shouldn’t have a credit card. I’ve never had the issue of credit card debt because I pay my credit card bills in full every month. This is a simple tip to ensure you don’t get yourself into more debt. This leads me to my next tip.

2.) Don’t live beyond your means. This goes for things big and small. I’m currently looking at a house and my deciding factor is finding one that will provide me with a mortgage similar to what I would be paying in rent (and factoring property taxes into that figure, too). I’ve narrowed in on options that will allow me to live comfortably and not be desperate to find a roommate to help cover the expenses (and by the way never factor in a potential roommate as a relief to a mortgage payment). Being young, I don’t need to find my “forever” home right off the bat.  What I do need is a house that gives me close to what I’m looking for and realizing there are certain things I need to compromise on. Having a real estate investment is a smart move, but choosing the house within your means, will set you up to reap the rewards of that investment long-term. When it comes to big purchases like a home, or car, be smart and don’t live beyond your means.

The same can be said for small purchases. When I look at my monthly credit card statement, I have to say what’s most embarrassing is how much I spend on eating out. It probably consumes about 50 percent of my spending. But trust me, there’s nothing more sobering than seeing hundreds (yes, I will admit it) of dollars being spent at restaurants. I can easily meal prep and save lots of money while actually being healthier, too.  I will say seeing those monthly credit card statements being taken up by restaurant orders can be sobering, and also helps me realize what is easy to cut back on.  That’s not to say I should never eat out again, but an every day occurrence is completely unnecessary.

3.) Give your credit cards a purpose.  Credit cards are great for building up a strong credit score, but in doing so I feel you should only use certain credit cards for certain reasons. While many credit cards can entice you with certain cash back incentives, I found a good way to manage my credit cards and not fall into the rabbit hole of credit card debt is to only use certain cards for certain reasons.  For instance, I use my Discover card only for filling up my gas tank, while I use my M&T Signature credit card for my regular spending. The reason I do this is so that I’m not tempted to double dip and be making similar purchases on different cards. To me, it’s a recipe for disaster. I’ve learned what I typically spend in a month on gas for my car, so it’s built in a routine that helps me be more cognizant of my spending habits.  There is an exception to this rule. Discover’s Cash Back Bonus awards you 5% back on any purchases on Amazon during the holiday months. This means I’ll do my Christmas shopping for those months using my Discover card. When this exception happens, I try to be even more in tune with what I’m spending and on what.

4.) Always pay more than the minimum amount. Some debt you can’t avoid, like buying a new car, for instance. But that doesn’t mean you can’t be smart about the debt you have to manage.  I, personally, think leasing a car is a trap. Think of always having a car payment – yeah, that’s what did it for me. Sure there’s nice things like never having to worry about  repairs, but there’s also more headaches like mileage limits. I decided to purchase my car and finance it on a 48-month plan (looking back, I should have done a 36-month plan and that’s what I recommend). But paying over my minimum payment each month has brought that 48-month timeline down to 30. That’s a year and a half that I avoided making car payments. Sure, I’d still be paying the same amount just over a different time period but paying more has allowed me to get payments done sooner, and for me to focus on other financial priorities. A great example of this is that I recently finished paying off my student loans. Let me put the disclaimer out there: I did not have the tens of thousands in student loan debt that many of my friends had, but it was still a decent amount to pay off.  I ended up paying it off in about two years, but what I ended up doing was transferring the amount I was paying to my car payment, which helped me almost double down and get my car paid off sooner.  Now that I have just finished paying off my car, I’ll be keeping that total amount to help with a down payment for a home. When it comes to a house purchase my goal is to hit a 20% down payment to avoid paying private mortgage insurance (PMI) while also helping increase my chances of getting a mortgage, having my mortgage payment be more affordable, and potentially a lower interest rate.  So pay more than the minimum you’ll get out of debt faster and get to those big, more exciting purchases sooner!

5.) Make a budget. One of the biggest factors that has not only curbed my spending but helped me prioritize things like a retirement account and a savings account has been a monthly budget.  I plug in my monthly income but factor in every expense I have, including what it would take to cover a retirement contribution each month (Yes, I think you need to be considering your retirement NOW!). This helps me see what I’m really focused on, and while I don’t always make the ideal retirement contribution goal that I want, it helps me realize when I do or do not need that burrito bowl from Chipotle. A monthly budget can help you figure out how long you have to pay off certain debt, while also rearranging figures to making sure you are making the smartest decisions with your money.  It also holds you accountable for what you are actually spending and keeps you on track to ensure you are meeting all your financial priorities.

So to my millennial friends, there is hope and financial freedom at the end of the tunnel and I hope these tips can help get you there!