Lately, I’ve become more interested in minimalism as I’ve been consuming Joshua Becker’s stuff. My first revelation of how little I need to be happy occurred while I was paying off my debt. During that time, I made many sacrifices such as living with my folks in my early 40’s, reducing my spending and consumption, and plowing most of my income to my debt.

I recognized I was making all of these so-called sacrifices and yet I was no less happy. The most important things to me, relationships, were still a part of my life. I simply removed the spending money factor from the equation. Sure it required some creative thinking on how to foster these friendships in new ways. However, spending time doesn’t have to cost anything

Over the past several years, I’ve enjoyed a minimalist Christmas. Additionally, as I’ve moved into apartment living, I’ve learned to live in smaller spaces and reduce the number of things I own. BTW, I’ve moved to a new apartment recently and it’s phenomenal. I owe you a post about the sweet deal I struck up!

Additionally, I’ve reduced the amount of clothing & shoes I own and am embracing a minimalist wardrobe. I love, love, love it. 

So this article talks about how you can embrace minimalism & frugality together in an effort to pay off your debt. I think we are all a little stressed right now with the COVID-19 pandemic occurring. It’s unlike anything we’ve ever been through before. It’s hard in so many darn ways!

I would imagine that anyone who currently has debt and/or little or no savings and might be feeling the heaviness of this. I used to feel that heaviness, Every. Dang. Day., when I lived paycheck to paycheck.

However, now with the huge downturn in the economy, many folks are additionally facing layoffs. Ugh.

Good Nelly has written the following guest post for my readers on how she sees the intersection of minimalist and frugality being useful to use in paying off debt. Let’s face it, none of us is spending a lot of money right now. So, if you are able to engage in any of these strategies now for future freedom, more power to ya!

Enjoy and happy freedom to you. I’ve added my commentary in blue below too. 🙂

Good Nelly’s post is in black and Deanna’s commentary is in blue…

Debts can add stress to your life. So, you should try to pay off debt as soon as possible. To do so, you need to save and have a good debt repayment strategy.

Have you heard of frugal minimalism? Well, it can help you to repay your outstanding debts. It is actually a marriage of frugality and minimalism. A Minimalist approach to life is about is owning less. Practicing frugality is about spending less. When you combine the two you get frugal minimalism and that can be used to help repay debts.

How to embrace frugal minimalism

Here are some ways to practice frugal minimalism.

Plan a frugal minimalist budget and focus on what you’re saving

Budgeting is an absolute necessity. Focus on saving first and then allocating the rest of the amount to meet your daily necessities.

It is not always about income. You have to focus on your daily habits and your daily spending to save what you want to.

In this regard, I would like to say that it is important to distinguish between your needs and wants. One of the primary reasons many people experience debt problems is a prioritization on wants. When your focus is to pay off debt, curb your wants. Oftentimes we don’t realize and consider our needs as wants.

Therefore, embrace the basic principle of frugal minimalism and divert your focus from wants.

Deanna here – This was huge when I was paying off my debt and remember it’s a process. As the months went buy of budgeting and paying down my debts, I began to tighten up my budget. The more my balances went down, the more I was motivated to weed out my wants. 

Here is a post on detailing how to do zero-based budgeting.

Make your money decisions consciously and focus on goals

When you plan a budget and allocate money for each item, make sure you spend it for that purpose only. Do not use money which is set aside for one item for any other purpose.

Have your primary goal in mind and when you get enticed to buy something. For the time being, set a goal of becoming debt-free within a particular date and highlight it in the calendar. Every day look at it at least once to stay focused.

This can be fluid. Once I got on a debt payoff plan, I knew approximately how long it would take. Don’t beat yourself up if it takes longer. The point is to keep going towards the goal. 

Take small steps for attaining your long-term goal

Often it becomes difficult to keep yourself motivated if it’s a long-term goal. So, break it into small attainable goals. It will help you to assess it properly.

Set a frugal minimalist challenge for yourself. How can you do it?

Select an item that you haven’t worn for a long time. Likewise, do this for 4 weeks; that is, select one such item every week. You can donate it if it’s in a good state.

Similarly, pick one habit that is not good for your financial health. For example, buying a cup of coffee every day. Get rid of the habit and you have just one week’s time to do that. Doing so, you can get rid of 4 such habits in a month. And, the amount you’re saving, put that into a jar. Use that amount to repay debt.

I had fun seeing if I could increase my payments towards my debts each month. Because I paid off my debt while working on a salary, the only way I could do this was by spending less. However, by working hard I did get a few raises in the process.

Manage your mortgage and reduce your house expenses

Perhaps you can refinance your home loan with a lower interest rate? Or maybe you can move to a smaller home which will help you save money? Or, maybe you can also rent a portion of your house that you don’t use? However, make sure that your privacy is not hampered.

And, try to decorate your home with less expensive items. Use your imagination to decorate your home your way instead of giving money to professionals.

I realize these are big decisions here and hence harder to make. Although, maybe it’s worth, at least, considering. 

Focus on being content with what you have

When you practice frugal minimalism, you realize how you can be happy with fewer things in life. It is not so easy to stop comparing yourself with others. But, look at your belongings and feel what makes you happy. It is the most important thing.

Paying off your debts can give you that happiness. So, be content with what you have, save as much money as you can, and enjoy a debt-free life.

I found when I was paying off my debt, I was happy. Partly because I learned creative ways to focus on the relationships that mattered to me. Also, because I was working towards a goal that would change the trajectory of my future forever. 

Ways to get out of debt

Now, let’s discuss a few ways to use your saved amount to get out of debt.

Go for professional help

If you think you need professional guidance to repay your debts, then you go for debt counseling. The experts can review your financial situation and suggest whether consolidation or settlement will be best suitable for you.

If you enroll in a consolidation program, then you can repay your debts in full. However, if you can’t pay off your debts in full, the settlement program will be more suitable for you. Whatever option you choose, you’ll have to make a single payment to the debt relief company every month. After a certain time, you’ll be free from your debt obligations.

I will add there a plethora of free resources out there. I listened to the Dave Ramsey podcast daily and heard how others were doing it. Right now, he’s offering his financial peace course for free so take advantage of it!!

Opt for the balance transfer method

If credit card debt is what is bothering you the most, then you can opt for the balance transfer method. By choosing this option, you can transfer your high-interest rate debts to a card with a lower rate of interest for a certain period.

It will help you a lot to repay your outstanding credit card balance with ease.

There is nothing wrong with transferring balances to a lower-interest-rate card. However, don’t take this as an opportunity to add more debt. Stay focused on the goal at hand. 

Additionally, if you do this read the small print, please!! If it’s an introductory low-interest-rate offer, they can back charge you interest if the balance isn’t paid off in full by the end of the introductory period. 

I would only embrace this method if I knew I could pay it off by the end of the intro period.

Debt snowball versus the debt avalanche

Sure you can employ a few of the things mentioned above but I’ve found that the real payoff comes from plowing money towards your debts. 

The debt snowball method is when you line up your debts smallest to largest and pay the minimum payment on all; however, you start to throw extra money at the smallest one. Once you’ve paid them off, you add that payment to the next biggest debt and so on. If you continue this until you finally get to your largest debt, your snowball will become rather large. It works!

The debt avalanche method is where you line up your debts from the highest interest one to the smallest interest one. Then you start attacking the largest interest one first. Likewise with the snowball method, once a debt is paid off, you roll that payment into the next one. 

I’m a fan of combining the two methods!

Closing Thoughts

Gather knowledge about these ways to get out of debt and choose an option that suits you the best.

I would like to add that frugal minimalism doesn’t mean depriving yourself. Instead, it means valuing things you care about. For example, don’t deprive yourself or your children of an item you/they truly value. However, at the same time, don’t gift your child every single toy available in the market, or don’t purchase every garment that is in the current fashion trend.

I think you can understand my point. Follow this and enjoy life! Value on quality instead of quantity and focus more on emotional aspects instead of material things. Life will rock!!

Thanks, Good Nelly, for your input! 

Author’s Bio: Good Nelly is a financial writer who lives in Milwaukee, Wisconsin. She has started her financial journey long back. Good Nelly has been associated with Debt Consolidation Care for a long time. Through her writings, she has helped people overcome their debt problems and has solved personal finance-related queries. She has also written for some other websites and blogs. You can follow her Twitter profile.