Dealing with Debt
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  1. Dealing With Debt
  2. 13 Money Saving Tricks to Pay Off Debt Quickly

13 Money Saving Tricks to Pay Off Debt Quickly

So you’re ready to charge full steam ahead at paying off your debt, doing everything you can to throw extra cash at your lenders until you’re officially debt-free.

The average Canadian’s non-mortgage debt is $29,312, including an average credit card balance of $4,154, according to credit reporting agency TransUnion. You could be paying off credit card debt, lines of credit, or tackling a debt consolidation loan or credit card balance transfer.

Either way, if you stay focused and plan strategically what you’re doing with your income, you can pay off debt faster. Here’s our list of key money saving tricks to deploy if you’re eager to attack your debts until your outstanding balance is $0.

Typewriter pay off debts

1. Budget

Our Credit Counsellors persistently stand by budgeting as the core component to understanding your finances and paying off your debt.

Carve out a budget so that you know where every dollar of your income is going, from your rent to your bills, groceries, entertainment and, of course, your debt repayments.

Creating a budget is half of the battle, you then need to stick to this budget every month to make sure you aren’t overspending. If your budget is realistic, it’s easy to get used to living on a budget.

2. Factor a No Spend Day Into Your Weekly Routine

A great way to get into the habit of keeping costs down is to enforce a weekly No Spend Day. Some people even enforce No Spend Weeks.

A No Spend Day means you can’t touch your cash, debit or credit cards – you simply rely on everything you already have around the home to get through the day. Sure, you may need to pay for your bus fare to get to work but you can use what’s in your pantry and fridge for the day’s meals, you have your closet to shop in for your outfit of the day, and you have your TV and your family’s company for entertainment.

No Spend Days are rewarding and a great reminder that you have everything you need; you don’t need to accumulate more.

How to Save Up to $70 Each Week

3. Apply Cash Windfalls to Your Debts

People committed to working towards being debt-free funnel every bit of extra cash they have at their debts, from their tax refunds to bonuses and even monetary birthday gifts.

While it’s tempting to use this extra cash for a shopping spree or a weekend getaway, when your priority is to wipe out your debts first, this extra windfall could accelerate your debt repayment progress by a month or more.

If you get a raise, you can use this bump in your salary towards boosting your debt repayment too – every little bit counts and will make a difference. When you’re out of the red, you’ll thank yourself later for your responsible decision-making.

4. Pay Yourself First on Payday

Once you’ve decided on how much of your income you can dedicate to your debt repayments, siphon off these funds on payday so they’re directly applied to your debt repayment plan. When these funds are out of sight, they’re out of mind. You won’t miss the money and it’s going to work for you, paying off your debt.

You can even automate these payments through your online banking. Then you don’t have to manually move your money around and payments are shipped over to your various credit card accounts, lines of credit, or your debt repayment plan.

Do You Think of Savings as An Important Expense?

5. Go On a Shopping Ban

Go through your closets, your drawers, and your storage boxes – you’ll quickly realize you own more than you need when it comes to clothes, shoes, toiletries, gadgets, and household items.

Go on a monthly-, quarterly- or even year-long shopping ban, committing to not buying certain things unless they’re essentials like food, household staples, and healthcare related. Some people take inventory of their closets and decide to go on a full-blown year-long shopping ban, opting instead to make use of everything they own already. Others start small and promise to stay away from the mall or online shopping for a month at a time or vow to buy only five wants for the year.

When you remove the option to shop from the equation, your savings will see a significant boost.

6. Unsubscribe from Deals

If a shopping ban is too stringent, declutter your inbox and unsubscribe from emails from your favourite stores, tempting you with sales and new season stock.

These advertisements pull you in when you didn’t need to buy anything at all. If you do buy anything, most of the time they’re impulse buys.

Another important step is to remove your payment details from your favourite stores. Sometimes online shopping is too easy – literally, a click away – and you don’t feel the sticker shock until your bank statement comes in. Instead, be mindful with your purchases: buy items that are needs and not wants, and factor them into your budget so you’re spending consciously.

Tips to Avoid Impulsive Spending

7. Cook at Home

If you’re guilty of splashing out on restaurant dinners, ordering delivery, and buying lunch during the workweek, it’s likely a sizeable chunk of your income is going towards meals.

Gradually transition from eating out to cooking at home – you’ll find that a grocery store-bought frozen pizza is just as tasty as ordering in and it’s about one-fifth of the price. Forgoing a Starbucks coffee every morning will save you about $20 a week or $80 a month.

You could buy a week’s worth of groceries for the same price as a single dinner out. Slashing your budget for meals will mean you can attribute much more income towards your debt.

25 Tips to Save on Grocery Shopping

8. Track Your Spending

Paired with budgeting, tracking your spending is a cornerstone to great personal finance management, whether you’re not in debt or not. Whether it’s pen and paper, an Excel spreadsheet, or a smartphone app, document each time you spend money and what you’re spending it on.

Piggy bank debt payments

The only way you’ll know if you’re sticking to your budget is to track your expenses. Through this exercise, you’ll gain invaluable insight on your spending habits too. At the end of the week or at the end of the month, you could be shocked to learn you’re throwing away $50 on eating lunch out at work and that your gas bill is $100 a week and you’re better off taking the bus.

9. Earn Extra Income

Despite all of your efforts towards saving your income to put towards debt, you may want to bump up your monthly payments by earning an extra income.

  • Get a part-time job, put your skills to use with tutoring, or offer up babysitting, dog-walking or other services around the neighbourhood.
  • You can also consider selling electronics, gadgets, and clothes that are used but in great condition on Craigslist, Kijiji, or eBay.
  • Another option? Rent out your spare room or basement suite for a steady secondary income stream.

Any extra cash you earn will bring you closer to your debt-free dream.

10. Put Away the Credit Cards and Go On a Cash Diet

While you’re paving your way to being debt-free, give up spending with plastic and stash the credit cards away. This step will bar you from adding to your balance and undoing your progress.

Instead, go on a cash-only diet – place cash into separate envelopes according to how much you’ve budgeted for each category of spending, such as entertainment, groceries, and bills.

When you head to the supermarket, for example, you’ll bring cash from that envelope with you. The money comes out in the transaction and it’s replaced with a receipt in the designated envelope to account for your purchases.

Once the money in the envelope is gone for the week or the month, you’ve tapped out. However, you may use leftover cash in other envelopes if it’s available.

11. Downgrade Your Monthly Plans and Memberships

As you’re reining in the spending, good place to examine are your subscriptions and memberships. Do you have a gym membership that isn’t worth the $60 bill each month or do you use Amazon Prime so infrequently you can ask to borrow your sister’s when you need to make a purchase?

Save on your fixed expenses by scaling back on your fixed bills. You could shave $100 off your monthly bills by cutting cable and sticking to Netflix, getting a bundle pack for your Internet and phone bill, and forgoing the faster speed or extra minutes on your monthly packages.

Another option is to call your providers to ask for any promotions.

75 Ways to Save Money on Household Expenses – Free Webinar

12. Pay Off Debts With the Highest Interest Rates First

A money saving tactic when it comes to debt repayment is to knock out your debts with the highest interest rate. This is known as the avalanche method. As you pay down your debt, you’re dealing with less interest so more of your money is being applied to the principle debt.

After that, you can apply the snowball method, which is when you address your smallest debts first. As you eliminate, and close the account, you gain more momentum to keep pushing forward.

Snowball vs Avalanche, Which Works Better?

13. Look for Free – and Fun – Entertainment

Your life before might have included going to concerts, buying movie tickets and planning date activities that led to expensive nights out. Now that you’re prioritizing paying off debt, you can think outside of the box when it comes to entertainment.

Turn your world into your playground with outdoor hikes, exploring new neighbourhoods around your city, and taking advantage of free resources like libraries to borrow movies, books, and magazines. Set a budget for entertainment and get creative – you’ll find there are plenty of things to do that don’t require emptying out your wallet.

Don’t Let the Rising Cost of Living Stress You Out as You Work to Pay Off Debt

When you’re trying to pay debt off quickly, the rising cost of living can stress you out as you start watching where all your money goes. If after trying your best to achieve your dream of debt freedom, only to fall short, you might need more than a DIY – do it yourself debt repayment plan. It might be time to get professional help with your debts. One of our Credit Counsellors would be happy to review your situation with you – contact us to arrange your free, confidential appointment. There are no strings attached, just honest feedback, guidance, and information. Your dream might not be as far fetched as it feels right now.


Worried about debt?

Get help to overcome it.

The sooner you start dealing with your debt, the sooner you see an improvement in your credit report If you need some help getting started with a plan, or if you’re not sure if your budget is realistic, contact a non-profit credit counsellor for free, confidential help. Typically, the earlier you contact us, the more options you’ll have.

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