My wife and I are still working to become debt free. In fact, we are now within a month of paying off her car. It will be the first time in our marriage we will be without a car payment (look for a celebratory post next month)! While working our way through debt repayment we have found that living frugally has helped by creating more disposable income to use to pay down debt. Let me use an example from this past weekend.
Can coupons help you get out of debt faster?
We have been members of The Grocery Game for some time now. It is a service that lines up coupons and store deals to notify you of rock-bottom pricing deals at your favorite store(s). We diligently collect the coupon fliers from each Sunday paper and file them by date in our filing cabinet. When planning a grocery trip, we print out the latest Grocery Game list and clip the coupons from the weekly flier. If you sign up for The Grocery Game, I would appreciate it if you would plug my email address jason[at]frugaldad.com in the referral box – I think I’ll earn a couple free weeks if a number of you do it).
Last Friday my wife headed off to take the kids to school and planned to do a little grocery shopping on the way home. Then she realized she forgot coupons. Dilemma. Return all the way home to pick up coupons, or just go on to the store since she was sitting in the parking lot when the missing coupon realization came over her. She decided to go shopping, sans coupons.
Despite her best efforts to find store deals and generic brands, she still spent a considerably more without our coupons. Normally, this wouldn’t be that big a deal – we would simply adjust the budget a bit and write it off as a lesson learned (we should really keep our coupons in an accordion file in the car for this very reason). However, since we are so close to paying off our car early, and set a goal to do it by June, every bit we can save goes directly towards that car loan balance.
A penny saved is a penny earned, or one you can use to pay off debt
Of course, this is just a recent illustration of something we’ve known all along. For every penny we spend it is one less penny that can be used to repay debt, or build wealth. This is easy to see when setting up a budget – an increase in one category means a decrease in the other. However, it is harder to recognize during the day-to-day grind.
We also recognize that living ultra frugal while in debt is extremely difficult, because your family is already making supreme sacrifices to get out of debt. Now you are asking them to not eat out, stay out of the movie theater, and skip the annual vacation. Don’t be surprised if you meet resistance.
If you can manage to live a frugal lifestyle while in debt, the payoff will come when you pay off those debts. We’ve already experienced this feeling with a couple credit card balances, and now it’s time to knock out this car loan. Who would have thought clipping all those coupons would help us pay off our car.