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