When you are in the process of paying off your debt, one of the most important steps you can take is to reduce your spending. You want to minimize the money you spend so you can use that towards debt payment instead. This does not mean that you have to hide yourself inside the house and forget the outside world ever existed. You do not have to stop living your life while you are paying off your debt. Even if you can’t afford a gym membership or you cannot dine at your favorite restaurants (as often as you used to, at least), you can still maintain your lifestyle.
The first step to becoming debt free and to follow the life you want is to create a budget plan. You can use a spreadsheet on your computer or write it down in a journal. It is important to have a concrete reminder of what you should and should not be spending on. It also lists down your debts according to the order of priority. Organization in your finances will save you a lot of money. When doing your budget plan, list everything – from the major purchases to the smallest ones. If you’re unsure about the cost of each one, over-estimate. That way, you will have something extra to use for other important expenses or use it towards debt payment.
As mentioned above, you probably won’t be able to eat out as often when you are getting calls from creditors. To put it simply, you might be spending $10 for each dish when you dine at a restaurant. That is just one dish out of several in one meal at a restaurant. At home, that $10 could feed 2-3 people. You get the idea? Practicality is key to becoming debt-free. You can be creative when cooking your meals and diversify them to make it more fun. Eating at home should not be boring at all.
Aside from dining out, your fitness lifestyle is also directly impacted when you are paying off debt. You can’t afford a gym membership because you would rather use that to pay off your bills. That does not mean you should give up your fitness routine altogether. Instead, you can try working out at home. It takes a little creativity and a lot of motivation to maintain your healthy lifestyle without spending more. You can try jogging or walking every morning. Instead of hiring a cab, you can also walk or ride your bike on the way to work. These are healthy alternatives if you can’t afford a gym membership.
In addition to food and fitness, clothing is another area that most people struggle in when it comes to money matters. Do not feel sorry for yourself for not being able to buy new clothes while in the process of debt payment. This would be a good time to look at your entire closet and find items you haven’t worn in a long time. You will be surprised at how many (new) items you can find!