5 Methods i use to stay out of debt - pic

5 Methods I Use To Stay Out Of Debt

My Strategic Dollar Budget, Debt 17 Comments

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Sitting on the floor my freshman year eating chips and salsa with my best friend is a memory I’m quite fond of. It’s not something I want to feel forced do to save money now that I’m out of college. However, sometimes being a responsible adult means making tough choices. Luckily, chips and salsa are not something I HAVE to eat these days, they’re something I enjoy eating.

When I was helping a friend of mine form a strategy for paying off student loans recently, they asked me how I could make so much progress with my personal finances. I told them that I made sacrifices. And that I said “no” to invitations, often. In reality, it was much more complicated than that. So how did I make progress in my personal finance journey? With these 4 things I do to stay out of debt:

I Started Saying No To Things I Didn’t Want To Do

I’ve worked hard for my money and I don’t want to spend it on something I’m not comfortable with. With that I’ve established a certain threshold for what I feel comfortable spending on certain things.

A few examples:

  • Dinner – if I’m not cooking dinner myself, which I prefer, I’d rather have a meal that’s less than $10, quick and somewhere I don’t need to add 20% in the form of a tip.
  • Movies – I go to a lower-cost theater where tickets are $6.5 max (matinees are $4.5) instead of the slightly closer movie theater that’s $14 for the standard showing and $20 for the Dolby Digital. INSANITY!
  • Alcohol – I don’t often drink at restaurants. I prefer to pre-drink and go to cheaper bars where drinks are $5 instead of $12.
This is about being true to your values and not letting other people make decisions about your money.Click To Tweet

I Created And Stuck To A Budget

Budgets suck, you heard it here first! But that doesn’t mean they’re something you can do without. If you’re serious about getting on the right foot financially, you MUST, and I repeat MUST do the following:

Personal Capital and Mint are both great options for tracking expenses and managing your budget. Check them out they’re 100% free!

I Increased My Salary

I worked my a$$ off day after day, week after week, trying to get ahead at work. With every big success, I’ve asked for a raise and often I’ve gotten one. Increasing your salary isn’t rocket science. It’s about building a case for why your productivity is worth more than what you’re being paid.

Once you receive the pay raise, you can’t just blow the extra cash. You need to take another look at your budget and adjust things. Maybe there are areas that you’ve been skimping on, it’s ok to add a little there. What you don’t want to do is inflate your life to adjust to your new salary with a more expensive car, home or clothing.

Don’t be a victim lifestyle inflation, it’ll take you years to dig out of it.

I Decreased My Expenses

Earning more money is a wonderful thing, it really is. However, the power of earning more money is far less than reducing your expenses. A dollar earned is worth $0.75, whereas a dollar reduced in expenses is worth $1. Focus on reducing large expenses like housing and transportation. Then cut out the remaining waste from any expense that doesn’t bring your life value or is frivolous. Eventually you want to get to a point where your income (W2 income & passive income) will cover your recurring expenses. That’s where your sweet spot for increase your investments and net worth is.

5 Methods i use to stay out of debt - pinterest pic

I Automated My Money

Bill Pay

It’s easy to setup automated bill pay these days. This is an simple way to ensure you never miss a payment. Rent, utilities, credit cards, car payments. You name it, you can automate it.

If you travel often or you’re on the go frequently (hey millennials!), the water bill might not be top of mind and you could miss it. Things happen sometimes, but miss enough bills and it starts to kick you in you’re a$$. You don’t want to destroy your credit because of personal oversight.


If you’re funding a 401K through your work sponsored plan, you’re already on the right track. Now take it a step further – commit to investing a certain amount, even if it’s small. Setting a recurring payment into your brokerage account is an easy “set it and forget it” method. Other options include using automated investing apps like Acorns or Digit that invest your spare change from your banking accounts.

Make sure you’re taking advantage of your tax-advantage accounts and invest wisely in a way that supports your financial goals and increase your contributions over time.

Automating my finances allows me to focus on sticking to my budget, making better choices and staying strong to my financial values.

What methods do you use to stick to your financial plan?

-My Strategic Dollar

Comments 17

  1. I agree with you about saying “no” more often. Just because everyone else buys something or chooses to spend their money a certain way doesn’t mean I have to. People often forget that something as simple as having the courage to do what you want with your money can be more useful and powerful than trying to find some magic investment strategy that doesn’t exist.

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      Absolutely! I should have included what you just said in my post! LOL

      But it’s so true, courage is an important thing in personal finances. Thanks for stopping by!

  2. I’m another fan of the “saying no to things I don’t want to do” to help avoid debt and save money. It is amazing how much can be spent by joining friends at the dinner/concert/night out or feeling pressured into being part of other activities that are not top on your personal priority list. The more I stay home and enjoy the simpler things (like a great ice cold beer in our yard on a sunny day vs. a $12 drink in a dark bar) the more I realize I just need to do what I truly want to do!

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      Oh I so totally agree! The more I say no to the things I don’t want to do, the more I feel empowered about my finances!

  3. The alcohol thing has been a huge life-saver for us financially. It is insane how much money you can spend on alcohol, even drinking at home can get pricey! It wasn’t uncommon to spend $40/week on alcohol for us JUST drinking on the weekends! I don’t even want to come to the realization of how much we were spending when we drank during the week 🙂

    That, and meal prepping, has been our two big ones. I just wrote about meal prepping this morning 🙂 but the big thing there is not only are we healthier, but we don’t go out to lunch at work – ever – anymore. At my old job I’d go at least once a week, and I’d typically have 1-2 drinks during lunch due to the work environment (it was encouraged, haha). That REALLY added up.

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      So true! I rarely drink when I go out anymore, it’s just not worth it to me.

      And yes, meal prepping is awesome. I save so much time and money.

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      Love Zero Day Finance and the methods he uses. I do a very similar challenge to keep myself from over spending or really spending at all. Thanks for the comment!

  4. All of this is great advice!

    The one I like the most is the “just say no” idea. If it doesn’t give you a good Happiness Return on Investment (HROI), then what is the point, right? It’s just a waste of money.

    Also, automating investing always worked really well for me before I FIREd. I didn’t even think of or miss the money going into the investment accounts.

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      Definitely! Saying no is a powerful tool. I’m working on further automating my investing so I’ll have to go dig into your site more and see what I can find! Thanks for stopping by!

  5. These are all spot on! I find that many of my peers indulge in lifestyle inflation. When they find a higher-paying job, they also get a nicer apartment and a nicer car. Before you know it, that additional bump in income is gone!

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      oh absolutely! Just because you get a raise doesn’t mean you have to spend it! Take that raise and put it to work. Thanks for stopping by!

  6. Saying no to things that you don’t want to do is huge. A few years ago, I used to always be available. I rarely said no and my finances showed it. When I got serious about paying down my debt. I knew I had to make some changes. Saying no to people was one of those changes. Things have been better ever since I started doing that.

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      Yes! Love this. Glad you were able to overcome the pressures of spending your money based on what other people want you to spend it on. Thanks for stopping by!

  7. Pingback: Journal Club 7-8-17 | Passive Income M.D. | Passive Income for Physicians

  8. Great post! Becoming or staying debt free requires no magic pill. It encompasses all these things you outlined. Investing is always a good tip as we millennials have time on our side. I’ve tried Acorns and had some good success. I was able to get it for free when I used my student email account! Otherwise, they charge you a $1 fee monthly. I haven’t tried Digit, but I keep hearing about it, how do you like that?

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      I really enjoy acorns more than Digit. My only problem with Acorns is the fee. $1 doesn’t seem like much, but in reality it’s a huge % of the “change” that you’re investing. Once you get to $5000, the fee drops to 0.25%.

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