By David Auten of the Debt Free Guys
When my husband John and I realized our lives were on a collision course to bankruptcy, we knew we had to cut back.
But we didn’t want to stop having fun. So instead of eliminating any “fun” spending categories altogether, we slashed expenses across the nine key areas below—for a total monthly savings of $2,158.
That gave us a huge boost as we worked to pay off $51,000 of credit card debt in just two and a half years. (Of course, we also funneled all extra cash—tax returns, work bonuses and holiday gifts—to our credit cards, too.)
Here’s how you can do the same.
1. Brand-name products
We used to be the kings of brand names—until we realized cheaper store brands are often just as good. Shop at The Dollar Store, Big Lots or similar retailers for basic products like dish detergent, soap, shampoo, household cleaners, kitchen supplies and more.
Even if you’re not ready to cut the cord completely—which isn’t hard, thanks to services like Hulu and Netflix—you can probably still save $50 per month by downgrading to a cheaper plan. If you really can’t stomach losing your sports package, try Sling, where you can stream ESPN and other cable-only channels for as low as $20.
The Internet is full of recommendations to entertain yourself for free (or for very little money). If you’re lucky, your city or state lists things to do, too, like on Denver.org. We built a calendar and planned our activities around budget-friendly events.
One IMAX movie ticket these days costs $16. But for $8, you can access tons of movies on Netflix. Another option: Spend $65 on a third-generation Apple TV, where you can rent current movies for just $5.
Bonus: Homemade or store-bought popcorn and other treats are cheaper and healthier than what you can buy at the theater.
5. Phone bills
A cheap smartphone plan can easily save $100 or more, which goes a long way when you’re paying off debt. We delayed upgrading our phones for two years, which saved about $30 a month ($360 a year!).
6. Credit card interest
If you don’t religiously pay off your credit card, putting it on ice for a while can save a lot. In addition to not using credit, we transferred our debt to new cards offering 0-percent interest for a limited time. Even with the transfer fee, this saved about $10,000 in interest charges.
Creating a weekly menu and grocery list saved us $30 to $50 a week. We also avoided expensive prepared foods, like marinated chicken or pre-made pizzas. In addition to being in control of your costs, remember that almost anything you cook is healthier than what you can buy out. And eating healthy can reduce long-term medical care expenses.
Starbucks isn’t an evil empire to be avoided at all costs—but it can cost $5 per trip. By contrast, a $12 pound of coffee made at home yields 45 eight-ounce cups, or $.27 per cup. If you’re hitting Starbucks three times a week, making coffee at home saves more than $700 a year.
If you’re still buying books from a bookstore, you’re overpaying. The library has free books! You could also consider buying a used Kindle for about $50 and perusing Amazon’s millions of free eBooks.
A version of this story originally appeared on Debt Free Guys.
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