Most everyone knows digging out of debt requires discipline, sacrifice, and some major lifestyle changes. But it is possible to still enjoy your life while you pay off those credit cards. Just because you’re spending less money doesn’t mean you have to live a dire existence!
Before you “declare bankruptcy” and get stressed out about your credit card debt, here’s how you can survive and thrive even while paying off credit cards.
Credit card debt and even living paycheck to paycheck can seem like an insurmountable challenge. Sometimes all it takes is a change in mindset, so why not set some of these financial resolutions or learn how to trick yourself into saving more!
1. Eliminate non-essential spending
In order to get out of debt, non-essential spending has got to go, or at least be cut considerably. You can make this a bit easier on yourself by highlighting all non-essential purchases on your last three months of credit card statements. Now make a list, prioritizing charges by what felt the most worth it. This will help you determine what really matters to you.
For example, you might notice that experiences top your list over material items. You wouldn’t take back that brunch with your old college roommate, but those clearance-priced boots are still giving you buyer’s remorse. Use this exercise to guide your future purchase decisions.
2. Challenge the average
There are a lot of expenses that are necessary but their costs can vary drastically. Groceries are a big one! Take a peek at those three months of credit card statements again and add up all the money you spent on groceries, then divide it by three. That’s your monthly average grocery bill. Now you can make it your mission to always come in under average and put the extra money toward paying off your debt.
3. Use the envelope system
The envelope system will help you beat the average and build a relationship with your cash. If you’re not familiar with the envelope system, it’s a budgeting method where you label envelopes with the different types of costs you have each month. For example, one envelope might be labeled “Rent” and another “Groceries.” You then allot a certain amount of money to each envelope, and when the cash is gone you’ve met the maximum amount you’re allowed to spend on that expense for that month. If there’s any money left over at the end of the month, it’s more that can go toward paying off your debt.
4. Cut or downgrade a major expense
Yes, every penny counts, but it also feels really good to cut a huge expense and those usually come in the form of bills. Go through your bills line-by-line and find out what you’re actually paying for. Switching from cable to a streaming service could save you more than $1,200 a year without sacrificing much!
5. Stick to staycations
Everyone needs a vacation once in a while, but they can cost thousands of dollars. If you’re in debt, the all-inclusive tropical vacation or even that weekend ski trip may have to wait. But you can still enjoy a staycation!
The key is to make a staycation feel different than a regular day. Pack a picnic lunch, visit a museum in a nearby town, buy a day pass to a community pool, or make hotel goodie bags with mini toiletry sets for the whole family.
6. Keep up with your fitness
There are plenty of ways to fit fitness into your day without a hefty gym membership. If you rely on the gym, consider a community college gym, which offers extremely affordable memberships. Two adults could save $850 a year by switching from a $55 gym membership to a community college gym. Another perk, in the long run, is that staying healthy can save you money on healthcare!
You may not even need to go to the gym to burn those calories! Find out how much of a workout your everyday activities are, then go on a bike ride with your kids!
7. Get a hobby
But not just any hobby! Make sure it’s one that spends time, not money. Reading is the ultimate frugal hobby. Libraries give you access to a world of free books. Join a book club to make it social. Hobbies like crafting and gardening can be great time fillers, too, but make sure you’re not using your hobby as an excuse to buy expensive supplies.
Keep an eye on the shelves for these 10 fantastic books written by modern female authors — or discover the stories that inspired the Oscar-nominated movies!
8. Increase your income
Spending less is not the only way to put more money towards your debt, you can also try to make more. Look for ways to earn extra cash — it doesn’t have to be a second job. It could be dog sitting, renting a spare room, or signing up for the occasional weekend shift at work.
You can even make some extra cash from the comfort of your couch! Try one of these 11 ways to make money from home.
9. Sign up for focus groups
Many online and in-person surveys and focus groups pay their participants with gift cards. They’re fun to participate in and even though you can’t put the gift cards toward your debt, they’ll give you a little extra spending money that you can use guilt-free.
10. Sell things
Create more income by selling things you don’t need. Cleansing your home of unnecessary items can also be a good reminder to think twice before spending on future items you don’t really need. Take your earnings and put 50 percent toward your debt and 50 percent towards treating yourself for a job well done.
11. Treat yourself (within reason)
Rewards can be incredibly motivating. Set goals and rewards for yourself, but make sure those rewards won’t send you too far backward. Maybe every time you completely pay off a debt, you go out to dinner at your favorite restaurant.
Or it can be something even smaller than that, like every month you spend below average on groceries, you reward yourself a pint of “premium” ice cream. A scoop of your favorite gelato may be just what you need to keep the fight going and conquer your debt once and for all.
Jeanette is a household savings expert whose work has been featured in everything from The Today Show to CBS 5 News. Jeanette was even listed as one of the best personal finance experts in 2014, according to GOBankingRates.