While there are many ways to come up with money each month to be used for debt reduction, one that comes to mind is to decrease discretionary spending. This is the money that is not really in the budget, such as that candy bar or the bag of chips from the vending machine. A $10 pair of shoes, purchased simply because it was on sale, a bottle of water from the vending machine bought because you got up too late and you were in too much of a hurry to fill up a bottle from home, and similar items belong to discretionary spending. Buying a new computer game when you do not play the ones that you already have would also qualify.
One way to counter this issue is to schedule debt reduction zero spending days. This is when you go through an entire day without taking anything out of your wallet. No money, no debit cards, and certainly no credit cards; you are after all trying to get out of debt right?
Debt reduction no spend days go beyond stopping yourself from making frivolous purchases. In order to truly have a debt reduction zero spending day, you must go without even spending any change. This means no quarters for a parking meter or a gumball machine, no ordering anything that you will pay for later and no signing up for anything that is not free as well.
An example would be ordering beauty products from Avon or Mary Kay, girl scout cookies, flowers, magazines and such for school fund raising events, signing up for a dance that will have a cover charge or agreeing to participate in the office order out lunch tomorrow. While the money won’t leave your wallet today, it will leave in the future and thus defeats the purpose of the debt reduction no spend day.
It’s not as easy as it sounds to truly escape an entire 24 hour period without spending any money or agreeing to future spending. If you are able to achieve perhaps just one such day per week or maybe aim for five or six a month, you will free up a bit more money to be added to your payment on your highest interest debt, or whichever debt you are striving to clear first. If you are a compulsive shopper, you will find the savings to be even greater as you reduce debt in lieu buying more clothes, shoes, accessories, CDs, or whatever your bane happens to be.
Adding a few zero spend days each month could be just the catalyst that you need to get better control of your budget and start paying off the accumulated debt. It’s important that you not simply spend more the rest of the month to make up for your zero spend days. Once you can master this, you will have the discipline required to focus the maximum amount of your resources toward, and increase the effectiveness of, your debt reduction. Without the discipline to maintain the lowest monthly budget that you comfortably can, you’re not truly committed to reducing your debt at the quickest rate and increasing the total savings possible in the amount of interest that you will pay.
Try adding a debt reduction zero spend day at least once a week, or even better have a zero spend weekend. This can be made even more effective if you curb the car and truly spend nothing – not even a gallon of gas during the weekend. Adding the debt reduction zero spend days to a few other budget reducing efforts (like eating more cost effectively, turning off lights and electronics that are not in use, etc.) can really overhaul you monthly spending. This new lower budget will be beneficial even after you are debt-free as this will enable your to spend a little more with high interest rates out of the way and begin saving for your future as well.
Working on Your Debt?
Join our FREE newsletter to get even more helpful tips straight to your inbox.