5 Ways to Get Out of Debt Without Giving Up Everything You Love

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A young couple looking stressed while reviewing their bills.

Image source: Getty Images

Does being miserable have to go hand in hand with being in debt?


Key points

  • Don’t listen to anyone who tells you to cut absolutely all of your discretionary spending to get out of debt.
  • It’s better to make a concrete plan to spend a small amount of fun money.
  • Sleeping on potential purchases and saving up for more expensive items are also wise moves.

If you’re working on debt payoff, you might have resigned yourself to stopping all your nonessential and “fun” spending for the duration. Farewell, weekly takeout dinner. Goodbye, online shopping. See you later, daily coffee shop visit. Depending on how much you spend on the fun stuff that makes your life happier, this kind of severe cutback could make a big difference in how fast you can pay off those debts and whip your finances into shape. But at what cost?

Life is short, and if you attempt to cut absolutely all of the fun out of yours, it’s going to be a lot harder to stay happy and productive while you get your finances in order. I’m not alone in saying that money is to be enjoyed; for example, financial guru Ramit Sethi recommends creating a conscious spending plan with guilt-free fun money built right in. The key word here is “plan,” however.

As someone who has spent a large part of 2022 getting my finances in order (by bringing in more money and paying off debt), I know how difficult it can be to face your life honestly and make productive changes. But I’m here to tell you that you don’t have to completely cut all your discretionary spending to still make real progress on getting out of debt. Here are five tips to help you take control of your nonessential spending and still plan to indulge, just a little.

1. Honestly evaluate your spending

If you’re hoping to get a better handle on your finances and work on paying off your debt, you really have to spend some time thinking about how and why you spend money. Maybe you love wandering the aisles at Target, picking out cute housewares that are so cheap individually — with prices that add up. Perhaps you have a weakness for online shopping, and all the sales emails you get just don’t help. Once you’ve identified your spending triggers, you can make some changes, like only carrying enough cash to buy what you need at Target, or unsubscribing from those tempting emails.

2. Prioritize the things that truly make you happy

Maybe your truest love is books, and the thought of no longer adding to your library while you get out of debt is a heartbreaking prospect. You can make books your fun spending priority, and cut out spending on the things that don’t bring you as much joy.

3. Build a little spending into your budget

Yes, I am suggesting that once you have your fun spending priority, you should build your spending on that right into your budget. I recommend choosing a set amount of money that you can spend without guilt, say $20-$50 per week, depending on your income and your debt payoff goals.

4. Sleep on any potential purchases

If you find yourself tempted to blow your fun spending budget, take a deep breath and step away. It can be very easy to tell ourselves that if we don’t buy an item now, we’ll miss out on it forever. This is usually not true. If you find a sweater that you love in your local department store and you’ve already spent your fun money for the week, go back for a second look the following week, or check the store’s website. If the sweater is available, and you still want it, it’ll be easier to make a case for buying it if you’re not rushed into the decision. Another great technique for online shopping is to add the item to your shopping cart — and then minimize the window. Sleep on it, and decide another day if you really want to buy the item. Chances are, after a few days have passed, you’ll find the temptation has been significantly reduced.

5. Plan and save for bigger purchases

If you want to buy something for $100, and you’ve given yourself a $25 per week spending allowance, it’s time to do some math. Why not save up that $25 for four weeks and then make the purchase? As many kids already know, finally getting to make a big purchase using money you saved in your piggy bank is one of the most satisfying experiences in life. And hey, if in four weeks you decide you don’t want that item? You can take your fun money and spend it on something else.

These five tips have been a tremendous help to me this year, and I’ve been able to enjoy some of the money I make while also achieving my financial goals. Trying to cut all the fun spending out of your life might help you save money in the short term, but trust me – it’s better for your state of mind and motivation to enjoy some small indulgences even while you pay off debt.

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