Planning to finally get out of debt this year? Want to know what to cut from your budget, first? Here’s a list of ten ideas that’ll get you started. Remember, in order to put the maximum amount possible towards paying down debt, you’ve got to lower your expenses. It might be uncomfortable at first, but it’ll all be worth it once you get those payments out of your life. Trust me!
The Debt Snowball method of paying off your debt, which is recommended by Dave Ramsey, is listing all your debts, smallest balance to highest, and paying only the minimum payment on all of them, except the little one. You attack that smallest debt with the intensity of a gazelle running from a lion. (In other words – as if your life depended on it). Once you finish it off, you move on to the next smallest, and so on.
In order to pay off your smallest debt as fast as possible, you need to put as much money as possible towards it. Therefore, it’s time to start cutting expenses.
Even if you can slash only half of the things I suggest from your budget, you’ll be off to a good start. Any progress towards a debt free life, is progress in the right direction. Don’t beat yourself up if you’re only able to convince your spouse to slash a few things at first. The point is to be considering what you can cut, and next month look for more things to cut. Keep at it. You’ll be a frugal family in a no time.
1. Restaurants
Stop eating out! Seriously. Each time you buy a sandwich, or a bag of chips, or a soda, from your office cafeteria you are extending the amount of time it’ll take you to get out of debt. If you can pack you own lunch, cook dinner at home, and brew your own coffee, you’ll be able to get back to your eating out ways sooner. So stop going to restaurants now, so that you can order whatever you want from the menu, once you’re debt free.
2. Annual Subscriptions
Costco, Sam’s Club, Amazon Prime, etc.
Amazon Prime might be convenient, but it’s likely causing you to spend more money than you would otherwise. When purchases are super simple to make, we tend to make more of them, without realizing it. Try cancelling those annual subscriptions. They may only be a few dollars a month, but every dollar adds up.
3. Monthly Subscriptions
Magazines, Newspapers, Apps, etc.
If you’re subscribed to a monthly subscription such as an exercise app (like I was), this is a good time to pause it.
4. Salon Services
Add up how much you’re spending on your hair and nails. Perhaps it’s possible to start doing your own (for a while) until you’ve paid off your debt. This can be a hard one for many. I personally have only dyed my hair once in my life, and therefore it’s not a big sacrifice to give this up. I understand, however, that this is an emotional one for many. So, just think about it.
5. Car Washes
If you live in cold area, and salt accumulates, this might be an item in your necessary bucket. But, otherwise, I’m sure you could grab a bucket and do it yourself, right? The kid’s will love it!
6. Lawn Care
While you’re trying to get out of debt, try to DIY as much as possible. I know it’s nice to have someone clean the house, mow the lawn, or pickup the pet doo doo, but you’re in a mess. It’s time to clean up your debt, and in order to do that, you might have mow your own grass.
7. Kids Activities
It’s hard to cancel stuff for ourselves, and incredibly difficult to cancel our kids extracurricular activities. We feel like we’re letting them down or they’ll fall behind by missing a season of sports. Honestly, I just don’t think that’s true. A short break might be good for everyone. If it’s too hard, try to simply reduce the number of activities they’re involved in. Perhaps one activity per kid, or do things seasonally.
8. New Clothes
I’m sure if you REALLY looked through your closet, you’d find that you have all you need (for now). Try to live with the clothes you have for the next year or two. Kids grow out of things, but try to shop second hand stores. New clothes may be a luxury during this time period. I have found many name brand items in our local Goodwill, and my kids have no idea they weren’t purchased new.
9. The Gym
If you go to the gym, this might be your year to exercise at home. Run outside, ride your bike or do old fashioned push ups. There are TONs of ways to get a workout at home, or with friends, without going to a gym.
10. Alcohol (or Coffee)
Yup, I said it. You might be spending more than you think in this category. Try adding it up, and try to limit it while you get out of debt. Whichever your beverage of choice, alcohol or specialty coffee, realistically analyze how much more you could throw at your debt if you cut back on it.
Am I a buzz kill?
It might sound like I don’t know how to have fun. And yes, my family might say that’s true. But, I challenge you to redefine your idea of FUN. To me the process of getting out of debt doesn’t have to be a grind. Make this a family journey, and have fun with it. Come up with new ways to spend your time, other that the costly ways you’re used to. This could be a time of renewal for your body, mind and spirit. Relationships could be strengthened via more quality conversations around the kitchen table.
In the end you’ll be DEBT FREE!
As you go through the process of cutting expenses, keep the goal in mind. It’ll help you through the tough parts if you can remember why you’re doing this. After you pay off your debt, you’ll have MORE money, because all your money won’t be going out the door to people you owe. Think of all the things you’ll be able to say YES to, because you decided to say NO now.
You got this.
