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BellaOnline's Home Finance Editor


Saving Money While Paying Off Credit Card Debt

Guest Author - Reshma Vyas

Nothing is more frustrating and stressful than carrying around a heavy debt load. It impacts virtually every aspect of your life. It keeps you from enjoying friends and family or even a simple outing. In some cases, it can exert a debilitating toll on your physical health and well being. Breaking free of credit card debt requires tremendous resolve and patience. It also demands us to make the necessary adjustments in our lifestyle. For many individuals getting started is the hard part and far too many individuals, overwhelmed by the size of their credit card debt, often give up without even trying. What are some of the strategies we need to implement while making the transition to becoming debt-free?

1. Stop using your credit cards. That sounds simple but almost impossible for many of us. However, for anyone struggling with credit card debt, the top priority is not to pile on additional debt. Put your credit cards away temporarily. If you do not carry them, you will not be able to use them.

2. Accept the fact that the debt was not accumulated instantaneously and it will take time for you to pay it off. We need to be kind to ourselves and not get caught up in mourning the money mistakes of the past.


1. Take inventory of your credit debt? How did you accumulate the charges? Analyze your spending habits. Were most of your charges a result of “impulse buys?” Or, did you use your credit card to finance vacations that you otherwise would not be able afford?

2. List each credit card, the balance, the interest rate, credit limit and the minimum payment due. Determine how much you can realistically pay off every month. Are there smaller amounts you can pay off immediately? Break down your debt in manageable chunks. Pay off the card with the highest rate of interest first.

Saving Money–Lifestyle Adjustment

Review your lifestyle. Becoming debt-free will require you to not only make adjustments in your lifestyle (depending on the level of credit card debt) but also in your overall attitude towards money.

Make a list of your “fixed costs.” Fixed costs are the costs that you have to incur for running your household. All other expenses should be kept to the minimum or completely avoided. Eliminate any unnecessary expenses. It may be prudent to temporarily discontinue cable television service, magazine subscriptions and entertainment expenses until you are on more secure financial ground. It may also be helpful to consider opening multiple savings accounts in order to track spending and allocate financial resources towards paying off credit card debt. Do not tap into your emergency fund. Your emergency fund should not be used to pay off credit card debt. Develop a pay yourself first plan and stick to it.

Additional strategies:

1. Buy groceries in bulk and avoid frequent shopping excursions. Use a price book and shop with coupons and rebates. Plan menus ahead of time. Emphasize frugal recipes and casseroles. Cook from scratch and avoid convenience foods. Prepare meals in advance and freeze them. Buy fresh produce that is in season as it is less expensive. Avoid name brands unless you can save money by using coupons and/or rebates. Focus on generic products. Take advantage of “freebies” from name brand manufacturers.

2. Exercise at home. Discontinue gym membership (this may be an individual preference).

3. Cut down on energy usage. Conserve water and electricity.

4. Find ways to increase your income by working overtime (if possible) or securing a part-time weekend job. There may be opportunities to work from home or become an independent contractor. Even working an additional five to eight hours a week can make a difference.

5. Take your own coffee, carbonated beverages and snacks to work. Avoid going to drugstores and retail stores during your lunch break.

6. Put all plans for home remodeling projects, vacations and “special” purchases on hold. Make paring down debt your sole concern. Even investing goals will have to be delayed until you become debt free. Put any “windfalls’ such as bonus checks, commission checks or work raises towards paring down your credit card debt. Once you have paid off your credit card debt, you can tackle your savings and investment goals.

7. Practice preventive care, eat a sensible diet and take solace and enjoyment in your work, hobbies, friends, family and life itself.

8. Keep your FICO score in mind. For those individuals who have not only accumulated excessive credit card debt but also must grapple with a damaged FICO score, they should carefully consider the impact of every potential purchase on their credit score.

Breaking free of debt is only the beginning. The most difficult part will be to stay debt-free. Minimizing the usage of credit cards requires being able to understand our spending habits. It is essential to take the time for constructive introspection with regard to our spending habits. Before making a purchase, we should ask ourselves, “why do I want this” or “do I really need this?” Every time we buy something, we are exercising our freedom of choice both as individuals and consumers. Some individuals may find it helpful to maintain a journal in order to track expenditures. An alternative strategy for tracking spending is to save all sales receipts for weekly review.

For informational purposes and not intended as advice.
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Content copyright © 2014 by Reshma Vyas. All rights reserved.
This content was written by Reshma Vyas. If you wish to use this content in any manner, you need written permission. Contact Sandra Baublitz for details.


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