Pay Off Debt Faster by Lowering Your Budget for Each Spending Category


When you’re paying off debt, every dollar counts. Each dollar that goes out of your household for some other purpose — snacks, coffee, after school activities, membership dues — is one less dollar to get you to your ultimate goal: debt freedom. Of course, at ReadyForZero we always recommend a balanced approach that includes reducing expenses wherever possible while leaving yourself a little room for “extras.” You don’t have to eliminate every expense in your budget.

But still, the fact remains: every dollar you spend elsewhere is prolonging your stint in debt. Prolonging your debt increases the amount of interest you are paying to service your debt, so an extra $100 per month leaving your wallet will actually cost you more than $100 in the end. It’s a one-two punch: longer debt period, and more interest paid.

The way to stop this leak is by finding some new ways to tighten up your budget. Take each spending category in your household, and wring it dry of all of the excess dollars that you can use for debt payments instead. Here are my tips on how to save more in each category every month.


People in “gazelle-intense” debt-payoff mode sometimes find themselves feeling as if they are missing out. It doesn’t help that all of our friend’s and family’s outings show up on our Facebook walls throughout the week.

The great news is that you can continue being social, building relationships, and having fun with friends and family at very little cost to you. Instead of waiting for an invite from others that you cannot afford right now anyway (or you can, except that you are earmarking most of your entertainment budget towards a fabulous, debt-free future), invite people to cheaper alternatives. Chances are, others within your social circle will be happy that someone is finally inviting them out without it costing them $20+.

Substitute: Locate a cheap, student bar with great happy hour drink prices, host a potluck horror movie-fest (either a cheesy movie theme or a scary theme), and do a search for free local events where you can meet-up with others.

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Make a real commitment to debt repayment by challenging yourself to eat from home 98% of the time. This is the single biggest way to save money on food. While this will take time to achieve, there are ways to get more efficient in making every meal from home. For example, in our household we pack lunches the night before while cooking dinner (i.e. when we are waiting for water to boil, or when the main dish has gone in the oven for 20 minutes).

Substitute: By cooking all of your meals at home and not spending precious dollars at the restaurant, you can afford to cook pretty nice meals for yourself. Make sure you take advantage of invites to potlucks at people’s homes and catered lunches at work or other events as they pop up so that you still feel like you are eating out. Finally, make use of leftovers. Leftovers will keep you from feeling as if you are slaving away every night in the kitchen.


If you are serious about debt repayment, then you need to take a hard look at any memberships and subscriptions you currently have. This is because most memberships and subscriptions are in the “want” category and not in the “need” category. Look over your checking account for the last month and make a note of each recurring payment that you see. If it’s for a membership or a subscription, get rid of it. Think of it as taking a temporary hiatus, knowing that you can easily re-subscribe or re-up membership when your debt is paid off.

Substitute: For magazine and gym subscriptions, check out the latest magazines at your local library and challenge yourself to exercise in nature. You can set up a workout area in your home with either a small television or radio in a spare room, or for in front of your television for when weather does not permit you to go outside.


Make a note in your calendar (digital or paper) to shop around for insurance every six months. Why would you want to do this? Insurance companies offer their quotes based off of both your personal records and stats, as well as their personal pool of insured people. Six months is a decent amount of time to see a marked change in both your stats (i.e. your age, you get married, your credit score increases) and their stats. On top of this, other insurance companies run new promotions to reel-in new business. By checking with them every six months you may find a great deal to make it worth it to you to switch your insurance provider and save some money.

Substitute: When you shop around for car/personal/home insurance every six months, be sure to ask the new rep if you are over- or doubled-covered in a particular area. For example, most car insurance companies will automatically include something called PIP (Personal Injury Protection) in their quote. However, your health insurance may offer full coverage in the event of an accident. Double check with your health insurance company, and if this is the case, then ask for a discount on the quoted premium due to not needing the extra coverage.

Remember, the way to make this successful is by substitution, not deprivation. If you begin to feel like you are being deprived of the things and experiences you love, then you will not follow a plan. However, if you can find cheaper alternatives to substitute and still fulfill that need, then you are well on your way to throwing even more money at the real problem: your heap of debt.

Image Credit terrypresley

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  • Stapler Confessions

    Thank you for the reminder: I really need to quit the gym!

    • Frugal_Confessions

      Hi Stapler Confessions! When calling, they will probably really, REALLY try to convince you not to. Hold your ground and remember you are heading in the right direction. Besides, after your debt is paid off, you can always join again.

  • Lisa Kovac

    I have been eating home every night for the last 2 weeks which is a huge difference for me. Not only have I saved money, but I have also lost weight because it is easier to watch calories! When I am at a restaurant I feel I have to eat my whole plate so I don’t waste money. At home, I can serve up smaller portions. Unexpected benefit but I’m loving it!

    • Wow, that’s great Lisa! Good for you for sticking with your new plan. I know from experience it’s hard to make the switch from eating out, but sounds like you’re doing really well. Keep up the good work, and let us know how it goes.