Pay Off Debt and Enjoy Your Luxuries

June 5th, 2009 | Posted in How to Start Paying Off Debt

It’s so easy to make the mistake of planning a budget that only covers the absolute essentials - mortgage, utilities, groceries, car payments, etc. Why is that a mistake? Simple: nobody can live like that for very long. Crash diets are healthy. Crash budgets are impractical.

So this is what to do. First, determine all the luxuries that you usually enjoy. Don’t hold back. If you need help remembering, check the receipts from your credit and debit cards for the past few months.

Some examples would be:

stylist appointments

eating out

museums

pay-TV

movie night

gifts

holidays

toys for the kids

business lunches

membership at the gym

videogames

Don’t worry, this isn’t a masochistic exercise. You’re not compiling a list of everything you’re going to have to say goodbye to. First, for anything on the lists you can’t afford but can’t live without, come up with a low-cost or free alternative. Once you get started this can be a really good time. Think about how you can still do your favorite things, but on a budget.

So suggestions would be:

For stylist appointments, consider the local beauty school. This is a great place to get everything from a haircut, to coloring, to manicures and pedicures. Don’t worry that a student will be providing the service. The students typically operate with the supervision of their instructor. Also visit the salon every three or four weeks instead of every other week.

Many museums will offer free nights or afternoons at some point during the week or month. Take advantage of these opportunities to appreciate your local culture without paying a dime.

You want to be prepared for birthdays or Christmas? Start a gift drawer. All through the year be on the lookout for excellent deals. Even if you find a gift almost a year in advance take advantage of a deal when you can get it. This helps prevent last minute scrambling and saves money in the long run. If things are really desperate, you can always give friends and family handmade coupon books with things like “one back scratch” or “no chores one night.” This is both inexpensive and highly personal. What a gift like this lacks in monetary value, it more than makes up for with love.

When it’s time for new wardrobe, find it through thrift stores, consignment shops, or during end of season sales. Children’s consignment stores and used toy stores can be a great place to find toys for the kids.

Make a movie afternoon instead of a movie night - the matinee price on the ticket can save a lot of money.

If you can’t afford a gym membership, quit. It’s too easy to do things like walk during your lunch, take the stairs, or bicycle with friends and family. All of these things can help you burn calories without costing a penny.

And that’s it. Just like that you have found a way to include your luxuries into your budget. Now you can pay off your debt and enjoy a fulfilling lifestyle at the same time.