How to Save Money Fast and Pay Off Debt

Could you save a lot of money quickly in one month?

As a household we pushed ourselves to cut expenses and make extra month to increase our savings for one intense month. We wanted to get into better spending habits. One of our goals is to pay off off our non-mortgage debt in the next two years. We owe about $80,000 in student loans, credit cards and some debt my husband assumed from his business. To do this we will need to save money quickly each month.

We’re a household of three and I’m a stay-at-home-parent to my toddler. My husband travels for work quite a bit. I didn’t realize until this month of trying to save more money that when he travels, I spend more. I find being a solo parent lonely and tend to eat out more and socialize.

The two main ways we are trying to save money fast is by cutting our spending and selling things. Cutting our spending means that we can put more of our monthly income towards debt. Selling things we aren’t using or don’t really need will put some much needed extra payments on our debt.

Spending for a month of trying to save money quickly.

I’m sharing our spending for a month that we tried to save extra money. It doesn’t include our recurring bills like utilities and mortgage. These are just the our non-fixed amount bills. These are the things I can try and save money on by doing less and spending less.

Grocery spending:

• Budget: $600
  
• Total for March: $555.03

I did pretty well eating at home to save money and avoiding grabbing coffee or lunch out too much. I wasn’t perfect of course and what threw me was our weekend away. I ended up using some of our grocery budget for our trip to Seattle. It was a last minute thing and I’m so happy we went and I saw some old friends. But I had to be creative to stay on budget.

We got a free breakfast one morning at an event and then brought a few things for a potluck at a friends. I was pretty happy with our frugal travel spending.

Where could I have done better? Trader Joe’s.

We stopped at the Bellingham TJ’s for wine and a few groceries before the border. It wasn’t really in my spending plan but I a) got sucked in by the amazing deals on wine and b) got sucked in by the amazing deal on nuts, dried fruit and cheese. And there went $53 I wasn’t planning to spend this month.

Still under budget by $45 but I know I can do better next month.

Casual Spending:

• Rachel – Budget: $75
  
• Rachel – spent: $60.79
  

As I said, I was away for a weekend and did some coffees out and casual eating using our grocery budget. I was pretty good about it, nothing excessive and where possible I got food from the grocery store. I spent $2.95 on a latte at Starbucks because we were out of coffee pods near the end of the month. Not sure of the logic of that as the pods are much cheaper than a coffee out. But I really wanted the victory of sticking to this budget.

Could I have done better? Yes. I went out with friends one night that wasn’t planned. I spent $13 on a beer and then chipped in for nachos.

Do I regret it? No! Takes some ninja skills to get a group of six mothers of very young children out on a Thursday night. Glad I was there for it particularly as it will be one of my last with these friends for quite a while.

Tip: don’t make yourself miserable when you’re trying to save extra money.

One thing I have learned about myself from trying to save more: some things aren’t worth it to cheap out on. Specifically for me: cheap food. I’m not going to eat instant ramen and skip fresh vegetables and fruit to save money. Sure, I can not buy expensive cuts of meat or out of season vegetables and fruit. Those are easy wins in keeping a lower grocery budget.

Eating really cheap food and making yourself tired and unwell just isn’t worth it to save money. I’d rather take an extra six months to pay off our debt and not get scurvy!

Some things are much easier to give up to save money. I don’t really enjoy shopping for clothing so that’s not a spending problem for me. I can get my hair cut and coloured twice a year instead of four times. It doesn’t bother me too much to have some dark roots and I end up saving several hundred dollars.

Transportation:

• Budget: $100
  
• Spent: $173.49

We had some unexpected Skytrain trips to visit my mother-in-law who was ill. My husband and I both used ZipCar for errands and visits this month. So yes, I was wildly off our original projection of $100.

We’ve always said we wanted to continue to lead our life as if we owned a car, meaning not saying no to social engagements or forcing ourselves into a three hour walk to run an errand. While our costs were higher than we projected, we’re still well below what we were averaging with car ownership.

A few months ago we sold our car and it not only helped us save a bunch of money very quickly, it reduced our monthly transportation costs. We no longer pay a $100+ monthly insurance premium and we’re renting our our parking space for $80/month win!

Miscellaneous spending:

• Budget: $200
  
• Spent: $72.28

Nice to see we were well below this budget amount.

Extra Income:

• Total for March: $399.88

Silver lining to the finances this month was the income generated from Craigslist, eBay and a Swap Meet. Earned another $50 selling my snowshoes in the last week of March. I’m sure I could’ve made another $10 on them but I get tired of the Craigslist emails and buyer no shows. Price it for a good deal and it sells quick and easy.

Sure, selling things around the home is a finite way to make extra money but, when you’re paying off debt, every snowflake (Dave Ramsey term) counts.

Things I learned from a month of trying to save money quickly.

Creativity: I like making meals out of odds and ends. Sure, there was a disaster (pulled pork salad) but there were also some wins: Parisian Coconut Macaroons (wanted to use up dried coconut), a slaw with avocado dressing and a well received pork and veggie stir fry. Using up items in my kitchen forced me to get creative and I liked it.

Reduce your food waste to save money on your grocery bill. 

I did a great job reducing produce waste and started freezing vegetable odds and ends. In a few weeks I had a bag of frozen broccoli and cauliflower stems that I turned into a soup (thanks for the tip, Vanessa). We ate leftovers until they were gone or I froze them and ate them a few days later.

Groceries are expensive living in the city.

Even with cleaning out the freezer, meal planning and reducing waste, it costs a lot to eat in this city. It’s going to be a challenge to eat well and save money but I feel confident I can do it.

Keep fewer groceries in your fridge for less food waste.

Keeping a simple and not overly full fridge, fruit bowl and pantry works for me. The visual of being able to quickly and easily see what is on hand really helped me use things up.

There are merits to bulk buying and keeping a well stocked fridge and freezer. If you are savvy and organized (and have the space), bulk buying and purchasing on sale items can be a great way to save money faster. Just remember to keep track of your spending and what you have so that you don’t waste money.

How much money did I save this months?

My tally for the month is $511 in extra saved money. I’m really proud of this accomplishment and excited to keep working on paying off debt and save more money. With our other debt payments this month we are really getting traction on our debt. I’m excited for the day that the debt is gone and we can actually just save this money for retirement or to put on our mortgage.

Tip: figure out what makes you impulse spend or overspend.

If you want to save money fast you need to know what your triggers are.

I don’t like to cook when I am stressed out. When my husband was away, and I kept overthinking the possible move to Europe, I really wanted someone else to make lunch. Stress = kitchen inertia for me. I soldiered on and mostly shook it off but it’s good to understand where the spend urges come from.

Remember: your quick savings can be quickly undone by an impulse buy or trip to Target. I highly recommend writing every purchase down in a notebook for a month if you are trying to save quickly. Keep the notebook on you and write the purchase in it immediately after paying for it. This one simple habit will keep you on track and saving money fast!

UPDATE: it’s almost eight years later and I wanted to share an update on how we have paid off debt quickly and saved money faster.

Learning to save money quickly has helped our family live our dreams.

It took us close to two years to pay off $80,000 in non-mortgage debt. We got some help from a $25,000 inheritance that was very unexpected but gave us big momentum. We sold our car, my wedding dress and the torch I ran with in the 2010 Olympic Torch Relay to pay off debt. It was all worth it and I have no regrets.

After we had all of our debt paid off we started to save money quickly. We were living off of a portion of our take home income and saving the rest. We put a lot of money on our mortgage and invested in our retirement accounts. Travel and vacations were now possible and we saw a lot of Europe while we were living overseas.

The lessons I learned from trying to save money quickly over that month many years ago have stuck with me. It also helped us take the leap into Geographic Arbitrage and move from the city to a small town. We’re working our way towards financial independence less than a decade after being in a lot of debt. You really can change your life and your finances.