Pay Down Debt Faster: Part One – Cut Spending

During my yearly budget analysis, I’m never exactly how my finances will turn out. I try to spend my money wisely , but no one can account for every emergency or impulse purchase. This time I found some crazy spending categories that need adjusting. These are things I feel I overspent excessively and I won’t let myself duplicate that this year.

This post is part one of a series showing how I plan to pay down my debt faster. I will be using a few different methods, which will hopefully give you some ideas for paying down your debt as well. I’m more of a “earn more” type of person than “spend less”. But each aspect has it’s own set of benefits, and I plan to use as many tips as possible.

Categories I plan to cut spending

Clothing

I’m not a big fashionista and most of my wardrobe consists of black clothing, shoes and accessories. But apparently I spend more money on clothes than I realize.

I spent: $1,702.39 or $141.86 a month

I plan to spend: $600 or $50 a month

Potential yearly savings – $1,102

Gifts 

This category is tricky because I don’t believe in loaning money to friends or family. If they ask for money, I either say no, or just give it to them. When I allot for it in my budget, I categorize it as a gift. Sometimes I get paid back, sometimes I don’t.

I spent: $1,703.79 or $141.98 a month

I plan to spend: $720 or $60 a month

Potential yearly savings: $984

Traffic Ticket

Ugh, this expense I deserved to pay. I wasn’t paying attention to the speeding limit and I was driving 15 mph over. This was my first speeding ticket and I pray it’s my last.

I spent: $158

I plan to spend: $0

Potential yearly savings: $158

Interest Fees and Charges 

This is another expense that could have been completely avoided. When all the banks started charging monthly fees, so did mine. I also had interest fees from a credit card I started paying off. Thankfully I have switched banks, and now have no more credit card debt!

I spent: $179.75

I plan to spend: $0

Potential yearly savings: $179

Entertainment

This is kind of my catch all category. It includes buying coffee, seeing movies and other miscellanous expenses.

I spent: $1,135.56 or $94.63 a month

I plan to spend: $720 or $60 a month

Potential yearly savings: $415

Electronics

Last year one of my savings goals was to purchase a new laptop. Now that I’ve got that done, I don’t really need any new electronics or gadgets. There will be no more buying until I’m debt free!

I spent: $1,291.26 or $107.60 a month

I plan to spend: $360 or $30 a month

Potential yearly savings: $931

Total savings planned for this year: $3,769

Steps to pay down debt faster

My six part plan to pay my debt down faster includes:

• Part one – Cut excessive spending
• Part two – Increase income
• Part three – Sell Stuff
• Part four – Pause savings and investing
• Part five – Bartering
• Part six – Using found money

By cutting back on non-essential spending, I can get an even better jump start on my debt pay off program. But if I combine it with the other methods, I will become completely debt free even sooner than I originally calculated.

How do you pay down your debt faster?

Photo Credit: AR McLin