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Step 4: Make Some Sacrifices to Get Out of Debt

Now that you’ve made your budget, you might be in one of three places by the end of the month. You either have a little money, no money, or even in the negative.

In all likelihood, if you use your credit card a lot, you probably go over budget. After all, that’s how you ended up in this position!

So you might wonder, “What on earth can I do? All the things I have are things I need!”

For some people, that may be the case. However, experience has taught me that there’s always something you can cut out of the budget.

Let’s take a look at some things you can do to free up some cash flow:

1. Cut Out Cable or Satellite

Did you know that the average household cable package cost is $217?! Okay, if you’re in debt you have no choice but to cut this out of your life.

In all seriousness, most TV shows are available via online streaming services these days. Instead of traditional cable or satellite, go for something like Amazon Prime, which includes their Prime streaming service. By the way, my readers can get a 30-day free trial to Amazon. Please read the terms and conditions.

There are also other options like Disney Plus or Netflix. However, I recommend just choosing one that works for you and your family and stick with it. After all, we don’t want to go too overboard!

2. Cut Up the Credit Cards

If you’re deep in debt, credit cards are NOT your friend.

“But what about my reward points?”

You carry a credit card balance. Therefore, your reward points don’t even come close to making up for the interest you pay. Seriously, you’re not outsmarting the credit card companies on this one.

Plus, keeping them around won’t help you change your attitude about getting out of debt. This is especially true if you find yourself depending on them every month.

For real, though, cut them up tonight.

3. Sell your car

How much car debt do you have? If your total car debt comes out to be nearly half your annual income, you probably need to get rid of the car.

For example, let’s say you have a household income of $60,000 a year. But you have a car loan for $34,000. My friend, that means you have too much car.

You can sell that car to a private party and use the proceeds to buy a beater. Your car doesn’t need to be anything fancy. It just needs to get you from point A to point B.

So, where can you buy a reliable used car? Check out Facebook Marketplace, Craigslist, or check out a few dealers. Also, research makes and models that have strong reputations for reliability. You can find cars like Hondas or Toyotas for as little as $4-5,000. And they last forever!

Once you get out of debt, you can look at buying a nicer car. But for now, you just need some basic transportation.

4. Put off investing (temporarily)

This is only a temporary measure, but for now, you need to free up your cash flow! Yes, investing is valuable and contributes to your future. However, I want you to think of how much you could invest without having any debt!

Therefore, I encourage you to stop your contributions and clean up your mess. And no, stopping for just a year or two won’t make that much difference. This is especially true if getting rid of your debt will allow you to contribute more to retirement later.

5. Stop the gym membership

How much is your gym membership? $50 a month? $100 a month?

Not too long ago, I coached a girl who called me about her monthly budget shortfall of $200. As I reviewed her budget, I instantly found her shortfall. Her gym membership was $230 per month! Therefore, I encouraged her to cut it until she increased her income.

While you’re trying to get out of debt, you need to cut out the gym membership. Instead, work out at home, run around the neighborhood, do pushups, watch YouTube workout videos, or anything you can think of!

6. Stop going to restaurants

Sorry, honey, we can’t go out to eat right now. At least not while you try to get out of debt.

That means you’ve got to cut out the Chick-fil-A at lunchtime. And the Panera Bread on the weekends. Oh, and forget about Domino’s on Friday night. Because you’re broke.

I want you to crunch some of these numbers. Let’s say you eat out around 5 times per week. You might average around $12 each time. That means you spend $60 per week or about $240 per month. Or $3,120 per year.

And guess what you can do? You can put that towards your debt! Therefore, ditch the pizza for a while. Use that place in your house called the kitchen and cook at home!

7. Change your grocery shopping habits

Do you only shop at high-end grocery stores? Well, it’s time to put that to a stop for now. From now on, you’ll shop at stores like Aldi, Lidl, and good ol’ Walmart!

Also, instead of junk food and sodas, you’ll need to buy fresh veggies and meats. You can buy plenty of foods like eggs, oatmeal, beans, and brown rice in HUGE quantities for cheap! And yes, you can eat pretty healthy even on a budget.

I made a list of more than 60 budget-friendly foods and ingredients you can buy. To get it, just enter your email address below and I’ll send it to you!

This also means you need to plan out your meals. Yes, you’ll have to make a grocery list and stick to it. Do this and you won’t overspend.

I also recommend checking out Ibotta. This is a completely free app that offers rebates on grocery store purchases. You can use the app at multiple stores and get cashback just for buying groceries! The average user earns more than $150 per year! And don’t worry about them trying to upsell you a subscription or make in-app purchases. They don’t have those. Download the app today!

8. Learn this magic word: “NO!”

If you want to get out of debt, you have to learn how to say “NO!” Otherwise, you’ll end up buying a steak dinner and drinks every weekend with your friends or coworkers.

Learn how to say no to your coworkers and friends. They might think you’re weird, but that’s because you are. You’re weird for going on this debt-free journey.

Just think, if you get out of debt you’ll have a lot more cash to have fun with your friends and family. Plus, you’ll have fewer restrictions and you won’t have to worry about it burning a hole in your wallet later!

This is short-term pain for long-term gain. Keep your vision and your “why” in mind and learn how to say no for now.

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