How To Free Up Money to Pay Off Debt Faster

If you're frustrated with credit card balances that aren't going down fast enough, or maybe they're not going down at all, it's time to change your approach. Let's free up some more money every month to become debt-free faster. Welcome to Under the Median, where every week we talk about practical frugality. Before we talk about where to find that extra money, regardless of why you're freeing up that extra money every single month, you wanna start with three important principles. The first one that you wanna do is create written goals that include your why. Every goal, including your goal to pay off loans, includes the amount of money that you wanna put toward that goal and how quickly you wanna pay it off. However, there's an important key that a lot of people miss, and it will actually supercharge that goal. That is to write down your why. We often call it our so that statement. Here's what something like that might look like. By the end of 2025, I will pay off my $5,420 Visa credit card bill so that, what is the payoff, the real payoff for you, so that you can sleep better at night, so that you can know every time the phone rings, it's not going to be a debt collector. What is it that you are looking for emotionally? That is your so that statement. It's your why you're doing all of this. That why statement will keep you moving forward even in the midst of setbacks. I think one good reason for paying off debt is to have more money in your budget to work with to do more with. And speaking a little bit more about that debt payoff, the second thing you need to do is have a debt payoff method. There are two really popular ones. The avalanche method is where you list your debts in order from the highest interest rate first down to the lowest interest rate, and that's the order that you pay them off in. The second method is the snowball method, where the lowest amount that you owe goes all the way at the top of your debt list, and the highest amount that you owe goes at the bottom of your list, and you pay them off in that order. Both methods work, but you probably need to go ahead and pick one before you get started. And thirdly, and very important, is you want to track your goals and your progress toward them. This will give you some encouragement because you'll be able to see all the work that you're doing is paying off. Whenever we've been going toward goals, we have charts that we put on our refrigerator. We have images we put on our refrigerator. We may color in lines to show how close we're getting to that goal every single month. It's super helpful because it does significantly increase your chances of reaching that goal. Now, if you're looking for a set of debt payoff trackers that you can print off and put on your very own refrigerator, we have a free set of them, and I'll make sure that I link those goal trackers in the description of this video. If you're enjoying this video, give it a thumbs up, and that way others can enjoy it as well. Now, let's get on to the nitty gritty on where to look in your budget for extra money. The first place, not surprising to anyone, is to drastically cut down or cut out completely eating out. The average family of four in the United States of America spends $500 a month going out to eat. Listen, if you just cut that back by half, you have immediately given yourself about 3,000 extra dollars every single year to work with. Here's our tried and true method for taming the restaurant fever. Get out your calendar and mark four days in that month that you can get together with friends for dinner, for drinks, whatever you wanna do where you can spend some money. You'll need to budget your money in order to have that available to you. Once you've got those four dates circled, here's the next step you should take. Decide in advance where you're going to meet with friends. As soon as you know the location and the name of that restaurant, you're going to pull up their online menu before you ever set foot in the restaurant. Pick out ahead of time what you know is affordable and will fit within your budget. It saves time at the restaurant and it saves more than a little bit of anxiety that you may have knowing that you're sitting there and your friends are waiting for you to order. But don't put that calendar away yet. Take a look at it and circle some places on it where you can go out with your friends and do some free things. Idea number one, check out activities of your public library. Just in the last few weeks, here are three things our public library has had and these events were specifically for adults. There was a puzzle challenge where you got together with groups of four other people and you had a certain amount of time to try to put together a thousand piece puzzle. Well, the group that got the farthest on that thousand piece puzzle got a very cool prize. They also recently had a 1920s themed murder mystery night. Costumes were of course encouraged. Your library, check it out. Another thing you can do is play some board games with your friends. There are all kinds of really fun board games that get a whole group of people engaged with each other. These are really fun and you'll have a good time passing an evening doing that. And everybody brings along their favorite snack food. Here's one we've done a lot. Attend free days at your local museum, maybe your local zoo or your wildlife park. All three of those are in our area. Just recently we found out the third Wednesday of every month, our local museum has a free brunch for senior citizens. Age 60 and over, they feed you brunch and then you get to go through all of the exhibits for free. Go for a hike and take a friend with you. I did this just this week. My good friend from high school, he was taking care of his son's dog and he needed to take him out for a hike. So we got together and that is exactly what we did. Very fun. Here's another idea that we've done a lot of and that is take a picnic at a local park. And when you're taking a picnic, it's a really fun idea to maybe make sure that you are taking a little walk after the picnic and it's okay. You could end up at a local ice cream stand or something, particularly if that ice cream stand offers very, very tall ice cream cones for a very good price. Plan a potluck. And not only that, give your potluck a theme. We've done this many, many times and it really helps. Hope, what are some of the themes that we've chosen for our potluck? Oh gosh, we have done appetizers, we have done all breakfast foods, we have done soups, we have done salads, and we have also done like a baked potato bar where everybody brought their favorite baked potato topping. Very, very fun thing to do with friends. Wasn't there a Taco Tuesday that we did as well? And Taco Tuesday. I can't believe I actually forgot that. Guys, these are ideas just to get you sort of started in the direction of figuring out what you can do with your friends that is no cost or low cost. While you're looking at trying to put more money aside, limit your travel. Go to places that are close to your home. That will save you a lot of money and gas. You can go on day trips or you can go on maybe two or three day weekends. When you do a couple of those sprinkled throughout the year, it really does kind of break up the monotony, but you can do that in lieu of taking that long one or even two week vacation. The next thing you can do is place a moratorium on buying new clothing. Yep, that means no new clothing. Go take an honest look at your dresser drawers and also at your closet. Look and see how many outfits you can wear without repeating that outfit. How many days or how many weeks is that? Ask yourself honestly, do I need something new to wear? Let's just say that you're looking, particularly if you have kids, I will say that's a caveat here because kids do tend to outgrow things very quickly. Make sure that you always have a list of what you are in need of and then use what we call our hierarchy of frugality. The hierarchy of frugality says the first place that you look is free. You are asking family and friends and letting them know that you are in need of clothing for your kids. We had friends that always pass down clothing for our kids. Then if you can't find something free, you're going to look at thrift stores, very low cost thrift stores, Goodwill, Salvation Army, or a local mission store. The next thing on the hierarchy would be looking at a little higher price. Clothes Mentor, a place that is going to, Plato's Closet is another one. They're a consignment store. They're going to be a little higher quality and a little bit higher price, but sometimes it's worth paying that little bit higher price. You can also shop online. There are several opportunities online to shop for both adult clothing and children's clothing. Just make sure that you know what the rules are for returning those items if they don't fit properly. And then finally, yeah, you might have to look retail for something that you really, really need. But once again, even though you're shopping retail, you're going to look for sales. You're going to look for coupons. You're going to look for cash back. So make sure even when you're buying retail that you're not paying that retail full price. You're always paying less. That is the hierarchy of frugality. The next idea is to look for a subscription cleanout. That means you want to look at any subscription services that you're signed up to. Are you getting the full maximum benefit of those services? If not, it's time to eject them and maybe go with some free ones. If you are signed up to subscription services that you are using, there are cheaper versions of the real expensive ones. You might have to watch some ads or that kind of thing. There'd be some limitations on it, but we have found them to be really worth it to go with their cheaper service instead of paying full price. And although it should go without saying, this next tip is really essential, and that is you should be tracking all of your expenses. It's amazing when people estimate what they're saving and stack that up against the reality, pen, paper, actual amounts of money from your bank statements that show what you have been spending. So make sure that you're tracking things daily and weekly. We use Dave's Ranzi's every dollar. We use the free version, and then we transfer once a month all of our totals to spreadsheets, which I have created for us for that purpose. Now, if you want all of our spreadsheets, they are available, by the way, and I'll make sure that I leave a link to it. It's called a Frugal Finance Planner. I'll leave a link to it in the description of the video. But however you're doing it, make sure that you know exactly how much money's coming in, how much money's going out. The spreadsheets that Hope is talking about represents a summary of the total amounts that we're spending in every category. So we can take a very quick look over those areas and see how we're doing, compare them to last month or even last year's totals. Ultimately, you may decide that you need a little bit more money to work with, especially when you see those debt balances dropping. That might mean taking overtime, taking on a part-time job, or maybe doing a little bit more of a side gig. If you want some ideas on side gigs, 40 of our Under the Median subscribers sent us all of their fantastic side gig ideas, and we did a video. We think you might find some super ideas in there that might benefit you as well. That video's right over there.