And then you pay cash for everything. Good luck with that on big ticket items like cars or houses.
It's not as difficult as you would think. My wife and I are on a five year budget plan to wipe out all of our existing debt. We have three vehicles; an old "work truck" that I paid cash for, her daily driver that she bought new before we started dating and still owes a few thousand on, and my daily driver that we paid cash for. Essentially, my debts will be satisfied within two years, her car and student loan (her only debts) within 18 months. We'll be snowballing all of the money we save from not making payments to finish paying off this house. A few years down the line we'll have enough saved up to pay at least half the note on a new house, maybe more if the market is right and we make back a lot on this one. Given that all three vehicles are in excellent mechanical condition and I'm meticulous about maintenance, barring an accident it will be at least ten years before we need to buy a new car and we plan to pay cash for it.
And we're not wealthy or upper middle class snobs; I work as an IT manager for a very small company and she works for local government. Our combined income is less than a lawyer just out of college. We've just learned how to manage money responsibly and not live beyond our means. We don't drive BMWs on a McDonald's salary like many people around here, and we don't have a six bedroom house with a 100 sq ft yard in an HOA neighborhood. We have a modest two bedroom cottage on half an acre of cheap land, a Chevy, a Toyota and a Nissan, and a whole heap of common sense.