5 money moves for leading a debt-free life

"Individuals will only end up piling payments. Also, if they have credit card points, they should use them to shop things they would have purchased anyway, or earn cash back," he said.

The other thing to remember in order to lead debt-free life is by aligning spending and values, said Narain.

"Individuals should always pay attention to indications of overspending to avoid becoming a large spender. One may be overspending if he/she finds himself/herself falling behind on financial objectives, buying stuff out of boredom, or breaching own spending guidelines. However, by creating a healthy budget, examining credit card accounts, and attempting to develop new habits, such as cooking at home instead of eating out, one can break the pattern," he said.

Everyone is pleased when they receive a promotion or a bonus at work. However, it is not a good idea to keep the additional cash in a bank account that pays 2 percent or 2.5 percent interest each year. One must use the additional money wisely in order to grow it by investing it, Narain said while talking to CNBC-TV18.

Individuals should make debt repayment the top priority by opting for an auto-debit option. Also, borrowers should try paying the outstanding amount on a credit card by the due date, and avoid rolling over the bill amount to the next billing cycle.

Those who are already under a heavy debt burden can create a sensible debt repayment strategy. The first thing would be to avoid any new debt, particularly credit card debt. If it is getting difficult to pay EMIs, one can plan to sell some of the investments or non-income-generating assets and use the proceeds for debt repayment.

Many a time, lenders also offer debt restructuring options that would help borrowers to accelerate debt repayment.