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Editor’s note: Please see the updated version of this story — 5 Painful (But Effective) Ways to Cut Debt.
If you really want to pay down your credit card debt quickly, let’s face it, you’re going to have to make some sacrifices. As often in life, the things that create the greatest discomfort in the short run, can end up conferring the greatest benefits in the long run. And so it is with credit card debt. If you cut back on some of your largest recurring expenditures, you will free up money to pay down your debt much more quickly.
This will, inevitably, be a painful affair. Most of us have gotten so used to our creature comforts that we think we cannot live without them. However, if you’re really struggling with credit card debt or other types of debt, the consequences of defaulting on the debt will be much more painful than foregoing some of the comforts you currently take for granted. Plus, you don’t have to cut back forever! Once your finances are back under control and you have wiped out your debt, you will have money left over to scale your lifestyle back up. So take a deep breath, relax, and sit back. Here goes.
1. Cable TV. Yes, we feel your pain. After all, cable is like the holy cow of American households. However, if you carry high credit card debt, you don’t have the money for cable. Just because you can charge it, doesn’t mean you can afford it. So, take a deep breath, and get rid of that $80-100 monthly charge. That money will go a long way towards paying down your debt each month. Once the debt is paid off, you can always reevaluate whether or not to get cable again, unless, of course, you decide that having a cable subscription is not a life or death matter after all.
2. Dump your cell phone. It’s hard to imagine that less than ten years ago we all got along just fine without a cell phone. But in fact, we did. So, take a break from the mobile; or cut your subscription to the most basic, enroll in Friends and Family programs, and talk mainly on free minutes.
3. Get a Cheaper Car. So what if your car doesn’t look like it’s straight off the assembly line. There are plenty of reliable, low-maintenance, ten-year old cars around, costing you a fraction in monthly costs.
4. Start Cooking. Okay, so you don’t have to become a Julia Childs, but cooking your own meals instead of eating out isn’t just healthy for your wallet, it’s good for your body as well. And while you’re at it, junk those expensive, unhealthy habits. Stop smoking; scrap the junk food, avoid sinking money down the drain guzzling soda pop or expensive lattes. It’s a great way to tighten the belt, so to speak, and free up money to pay off your credit card debt.
5. Take a Shopping Break. With the exception of groceries, put a moratorium on spending for six months. Most of us have plenty of stuff, much more than we need. Avoid going shopping for six months; postpone major purchases; avoid purchasing new clothing (unless it’s for your kids); pass up on gadgets, thingamajigs, and irresistible sales offers; shun the mall. At the end of six months, make a list of the things you absolutely do need, and purchase those. Rinse and repeat. If you keep taking six-months shopping breaks; you’ll be surprised how quickly you can wipe off that debt.
Let’s face it, radically changing your spending habits in this way won’t be pleasurable. However, treat it like an experiment in reevaluating priorities and trying out some new lifestyle habits. At the end, you may find that you haven’t just succeeded in wiping out your credit card debt, your old habits may have been replaced by some new hobbies and interests in the process. Good luck!
