Jay Leno never carried debt, even before he was a big earner. He stayed out of the red thanks to one simple strategy: He didn't buy on credit.
"I rarely used credit cards," the comedian tells CNBC Make It. "I didn't buy anything I couldn't afford to pay for in cash. I always liked, 'Here is the money, give me the thing, transaction over.'"
Leno started his career with a minimum wage job at a McDonald's as a teen. A few years later, when he was jump-starting his career as a comedian, he had to supplement his comedy gig earnings with money he made working at a car dealership. At first, the paycheck from the dealership was the bigger of the two, so he banked that and lived off the other.
He started hosting "The Tonight Show" in 1992 at age 42, a job that reportedly earned him as much as $30 million a year. But even today, he prefers not to pay for anything in installments, he tells CNBC Make It: "When you own something and you don't have to write checks every month, you're just better off."
This conservative philosophy gives him financial peace of mind. "I own everything. I own my buildings. I own my cars. That way, if it ends tomorrow, I know what I've got," says Leno, who now hosts CNBC's "Jay Leno's Garage. " "It's a little old fashioned, I suppose, but it seems to work pretty well for me."
When you're getting started as an independent adult, it's important to establish good credit — that will allow you to make larger purchases in the future, such as a car or a home — and one way to do so is by opening a credit card. The good news is, if you stick to a few basic guidelines, you can easily use one without going into debt.
But if you find yourself not making payments in full, or if you have already racked up credit card debt, Leno's cash-only solution may work for you.
CNBC's " Jay Leno's Garage " airs Thursdays at 10 p.m. ET.
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