Attacking Debt and Embracing Frugality: 6 Steps to Take

attacking debt

Embracing frugality for the first time is not always easy or simple. It can create unwanted stress when approached incorrectly. It can also feel too restrictive rather than a new way of living. 

Making smarter decisions around money is what thriftiness or frugality means. Whatever term that you’re most comfortable with, it’s about making sensible choices (both large and small) to improve your financial position now and into the future.

Here are six steps to take to become more money conscious and to attack debt. 

  1. Take Debts Seriously

Debt will hang around in your life for as long as you tolerate it. 

There are various options to pay off debt. These include using the debt snowball method where you pay the smallest debts off to get early wins on your journey to becoming debt-free or the avalanche method where the highest APR debts are repaid first. Using an app like Tally can make light work of juggling multiple credit cards, payment dates, and credit bills. It offers debt consolidation options that could save you money if your FICO score is 580 or higher. 

  1. Reduce Your Active Subscriptions

Subscriptions used to only be the cable bill and not much more. However, now it’s likely that you’ve acquired several other subscription plans to supply additional services. 

Some of the most popular ones include Netflix and Amazon Prime, book clubs, music streaming services, the local gym, and a whole lot more. 

When totting up how much is paid every month on subscriptions, it can be surprising. Usually, if you are tracking spending at all, these expenses fit into different categories and go unnoticed. But it’s time to pay attention to them now. 

See which ones are no longer needed. If you’re keen to repay off your debts sooner, then consider what you’ll save in further interest costs versus keeping an active subscription for another year. Also, look at downgrading a subscription to a cheaper plan temporarily to retain the service with fewer bells and whistles. 

  1. Cut Food Expenses

Most of us spend way too much on food and drink. We all have our favorites snacks, drinks, and meals. These can increase the weekly cost of groceries and other extras when the basket is added up. 

Meal Planning

Planning meals ahead of time cuts costs, reduces food waste (around 30% in most U.S. households), and avoids impulse buys at the supermarket. 

Also, preparing more dishes yourself rather than relying on microwave meals and other shortcuts will make a difference too. Use coupons if you have some available.

Additional Cost Savings

If you need to reduce expenses drastically, consider changing to a different supermarket.

Costco, Walmart, and discount retailers are cheaper. Alternatively, try less expensive or supermarket brands instead of consumer brands at higher prices. 

  1. Choose Less Expensive Entertainment

Reducing the number of times that you dine out with a partner will substantially cut needless spending. Prioritizing debts over luxury eating will leave a good taste in your mouth!

Takeout is less than restaurants in most cases but watch out for those delivery fees. Also, a premium meal option from the supermarket aisle is still cheaper than takeout. It’s lower calories with less sugar and fat, so the waistline won’t suffer either. 

Find other entertainment options to replace expensive ones. Switch from pricey hobbies to ones that are cheaper and/or can make you a little money on the side. Wait for a movie to reach the streaming platforms inside of heading to the movie theater. 

  1. Track Your Income and Expenses

Operating blind is likely where debt and trouble with money began. 

While having a budget is useful, tracking how you spend the money is even better. There’s often a significant difference between where money is spent and your thoughts on the subject.

Tracking every cent you have spent for at least 30 days is illuminating. While it won’t highlight period payments every quarter, bi-yearly or yearly, it will still provide some clarity over your finances that perhaps wasn’t present before. 

  1. Set Fixed Amounts for Different Categories

To avoid the temptation to overspend, set fixed amounts for different spending categories.

Use a system that works for you to prevent the habit of spending to excess. Identify where your most common areas of overspending are. Look at how to prevent that from happening again. 

Some options might be using a cash-based system to limit what you have available or to make purchases at the start of the pay period and no more after that. 

By taking a firm stance with debt to not add more and actively reduce what remains by cutting expenses, it’s possible to get debt-free sooner. Also, by carefully pruning spending while keeping the fun in the budget, it won’t feel restrictive when embracing frugality for the first time. 

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