I’m on my twelfth month with debt. Twelve more months to go and I will be free (hopefully)!
For the past year or so I’ve done my best to save up money. My frugality has verged between the extreme (two months only eating dime ramen) and the reprehensibly irresponsible (VIP tickets to Magic Mike XXL; I couldn’t help myself). From my adventures, or misadventures, with money I’ve learned that for everything in life there’s a smarter and a better way to do things. This is never truer than when it comes to paying off debt.
We are so often told that the only way to pay off debt is to be frugal. True, when one owes so much, one has to cut back on indulgent expenses like this season’s Prada stilettos. Such cutbacks may make sense on the surface. The problem is that they can go too far. So the first step in being much smarter about expenses is to ….
Stop Paying Attention to Self-appointed Pundits
That’s right. You will end up hearing debt advice from the television, the radio, relatives or basically, everyone. Do not listen to all of it. I repeat, do not take each and every piece of debt payback “advice” from just anyone. You will never hear the end of how you basically have to be an ascetic and shun all worldly pleasures to pay off your debt. There’s a fine difference between being frugal, and being stupid. Starving yourself is not being frugal. That’s being stupid. Cancelling your Netflix subscription until you can afford one is being frugal. Not buying physician prescribed medicine when you are sick to save money to pay off loans is being stupid.
Learn to Prioritize
I knew this girl once, who, like me, ended up with a massive amount of student debt. Luckily, she had a job that was enough to pay off a monthly sum as long as some cutbacks were made. Her solution was to make deep cuts to her food budget, while her clothes budget remained pretty much the same. A couple of months later, she looked positively anorexic (I am not kidding). We all have our little vanities, but they should be kept in check when budgeting for a debt. Health is never something to compromise on. I learned the hard way the benefits of eating healthy. After years of buying low-cost instant meals, now I am at risk for heart disease. Don’t make the same mistake as me and try not to be overly frugal when it comes to shopping for healthy meals.
Develop Good Habits
Do you know how much money a tenant can save by turning off all the lights in rooms that are not in use? I do, twenty to thirty dollars a month for a small, two-room house or apartment. Yes, I did the calculations. It turns out that being frugal is largely about developing good habits, like turning off the tap when brushing teeth and controlling compulsive buying. You may already have heard about this before, but pay attention, it actually works!
Ultimately, you are the one who best understands your situation. Now go do a self-assessment and see if your frugal methods are actually smart, or plain stupid.
What tips do you use to be frugal?