No one likes debt in their lives. After all, who would be willing to sacrifice a substantial amount of their paycheck to pay off debt? I believe no one. That’s why people who are reeling under debt are slogging to find a way to pay it off. If you are one of those people, you don’t need to worry. Because today we are going to discuss how embracing the concept of frugal minimalism can help you to pay off debt.
Have you heard about frugal minimalism?
Well, it’s an amalgamation of frugality and minimalism in your life. Frugality helps you to save money by reducing your expenses as much as possible. And minimalism helps you to save money by focusing on your basic needs or the minimum things that you need to sustain in your life. In short, you can cut down lavishness from your life and save those dollars for a better future.
So, being a frugal minimalist, you can cut down your expenses as much as possible and focus on the basic necessities in your life. And those saved dollars can help you to pay off debt.
But how can frugal minimalism help you to become debt-free? Let’s find out.
Frugal minimalism step one – create a budget
Have you planned your budget? If not, learn how to budget your money and work on your finances. Budgeting your money helps you chalk out a proper spending plan so that you can save more.
However, it’s time to create a frugal minimalist budget to cut down the unnecessary expenses and focus only on the basic necessities in your life.
For that, you have to distinguish between your needs and wants. Many ‘wants’ may seem like the ‘needs’ of your life. But you have to dig deep and cut down those expenses.
To get started, find out the categories where you can eliminate your big 5 expenses to save money for paying off debts.
Sign up for a loyalty program
Nowadays, you will find loyalty programs almost everywhere. Be it Starbucks or Kroger or Walgreens, you can sign up for their loyalty programs.
By doing so, you can accumulate reward points while making purchases. And later, you can redeem those points for getting discounts or freebies or any special offers.
Let’s say, you grocery shop at Target every month. If you enroll in their rewards program named Target Circle, you can earn 1% on all purchases. You can also receive a birthday discount of about 5%.
Initially, you might think that you are saving a very nominal amount. But if you calculate your savings annually, it might turn into a substantial amount. And you can dedicate those funds for paying off debts.
However, accumulating rewards is not an excuse to buy items you don’t need. Being a frugal minimalist means, you must focus on your necessities and reduce your expenses.
Consolidate your debts
The worst part of the debts is accruing interest. And if you have unsecured debts to pay off, the situation can be worse.
So how is consolidating debt related to frugal minimalism?
Frugal minimalism teaches us to own less and thereby, spend less. So, if you owe less amount of outstanding balance, you are likely to make lower debt payments every month.
For that, you can take out a personal loan to consolidate your high-interest debts.
By doing so, you can save money on your interest payments as the interest rate of the personal loan is usually much lower. Besides, you can bundle your multiple debt payments into a single payment every month.
Thereby, consolidating your debts can help you to pay off your debts with ease. And you can save money on your interest payments as well.
Ditch cable TV services and save money
Are you tired of your monthly cable bills? If yes, then the time has come to cut the cord at the earliest.
Usually, cable services cost about $60 to $100 depending on your provider and the package you select.
Still, spending about $720 to $1,200 every year just to watch TV is too much. You can cut down these expenses and use that money to pay off your debts.
However, if you love your favorite shows very much, then there is a frugal way to watch them.
You can purchase an antenna for about $50 to receive the major broadcast stations like ABC, CBS, etc. Besides, you can opt for streaming services like Hulu Live, DirectTV Now, etc. costing about $15 to $45 a month.
Go for a vacation during the off-season
A CNBC Make It report shows that about 74% of the people in our country have fallen into the debt trap to pay for their vacations.
You might be planning to go for a vacation to relax and spend time with your loved ones. But make sure that you are not overspending or spending on unnecessary things while going on a vacation.
For that, you need to do the right planning and follow some strategies to save money and focus on the necessities.
So, try to avoid peak seasons as much as possible. Traveling during the off-season can help you to get much cheaper airfares and accommodation costs. And thereby, it can help you save a substantial amount of money to pay off debt.
Besides, during the off-season, you will usually find a less number of tourists visiting that place. So, you can explore the place intimately as it’s likely to be less crowded.
Eat at home as much as possible
If you dine out often, try to change your habit and avoid it as much as possible. Dining out means you have to pay for the food costs plus taxes plus tips.
A Bureau of Labor Statistics report reveals that the Americans spend almost $3,000 a year on an average for dining out.
So, eating at home can help you to brace yourself from these expenses. And you can use that money through frugal living to pay off debt.
Besides, it can help you to stay healthy too as you are less likely to consume junk food at home.
Frugal minimalism final thoughts
So, undoubtedly, frugal living can help you to become debt-free. I hope the above tips for embracing frugal minimalism will help you to reduce your expenses and save more to pay off debt. But at the same time, you need to set up a debt elimination plan to chalk out how you can use those saved dollars to pay off debts.
Also, after becoming debt-free, following frugal minimalism will help you to gain control of your finances. And organize them in a better way so that you don’t fall prey to the debt trap easily.
But make sure that you aren’t compromising with the quality of your life. Constantly feeling deprived can make you frustrated in the long run. So, don’t be too restrictive.
Author’s Bio: Good Nelly is a financial writer who lives in Milwaukee, Wisconsin. She has started her financial journey long back. Good Nelly has been associated with Debt Consolidation Care for the last 10 years. Through her writings, she has helped people overcome their debt problems and has solved personal finance related queries. She has also written for other websites and blogs, such as perfection hangover, the savvy solopreneur, recovering women wealth etc. You can follow her Twitter profile.