Dropping All Your Fun Spending Isn't the Best Way to Deal With Credit Card Debt

If you are in debt, and especially credit card debt, it can feel stressful. Since credit cards have high interest rates, you may want immediate credit card debt relief. You may also feel pressured to try to cut all fun spending from your budget to send extra payments to creditors. 

The reality, however, is that dropping all of your spending on things you enjoy may not be the best way to deal with credit card debt. 

Here's why cutting all of the fun out of your life often won't work—and some tips for what to do instead. 

Why Cutting All of Your Fun Spending Won't Work

First things first: It's important to make all of your credit card payments on time if you can. Otherwise, you could damage your credit score. This would make borrowing in the future harder. It would also affect other business transactions, like renting an apartment. You need to prioritize on-time payments over any fun spending.

Once you have paid the minimum, though, it is a good idea to pay as much extra as you can on your credit card balance each month. Doing so could help you get out of credit card debt sooner. Each extra payment you make can reduce the principal balance faster and give you quicker relief from credit card debt. 

That said, stripping most or all of the fun spending out of your budget to make big extra payments isn't likely to be very effective. You may be able to do this for a short time. However, you are going to get tired of the constant sacrifice. 

Just like when you are on an overly restrictive diet, being too restrictive in your budget makes it much harder to stick to. You'll most likely start breaking the spending limits you've set for yourself. You could even end up splurging and charging more on your cards because you're so tired of depriving yourself of everything you enjoy.

When you make an unrealistic bare-bones budget that leaves no room for fun, you are setting yourself up for failure. You don't have that wiggle room to do little things, so any indulgence ends up setting you back. When you can't succeed in sticking to your budget and you do go backwards and miss some extra payments or even borrow again, this could kill your motivation.

All of this just makes getting out of debt harder, which is why it is not the best way to deal with credit card debt. 

That's especially true if you have a lot of credit card debt and it will take a long time to pay it off. You might be able to live on a bare-bones budget for a few months to make big extra payments on your card balance. But if it will take you years to become debt-free, living without fun spending for years is just not doable for most people.

What Can You Do Instead?

Instead of forcing yourself to constantly sacrifice to pay off your credit card debt faster, there is an easier approach. You should try to cut at least one big fixed expense. 

The big benefit of cutting one fixed expense is that you make the change one time. For example, say you decide to downsize to a cheaper used car. Or you opt to rent a cheaper apartment. Or you switch to a bare-bones cell phone plan. 

You only have to make that change one time. Then it is done. You don't have to constantly keep depriving yourself or saying no to going to get a drink with a friend or having a morning coffee. You move or get rid of the car or make another sizable change, you adjust to your new reality, and you send the money you are saving toward your credit card payments.

Cutting one or two big fixed expenses can also make a bigger impact. If you move to a cheaper apartment or get a car that costs you $100 or $150 less per month, you have freed up a lot of money to go toward your debt. You have to give up a lot of fun spending to free up so much. For example, is it easier to downsize to a cheaper used car once or to give up 20 days of a $5 coffee drink you love?

How to Decide What Cuts to Make

Now, there may be some situations where it makes sense to cut some fun spending. That's especially true if you are devoting too large of a percentage of income to little splurges. And there may be certain circumstances where your fixed expenses are already really low. You may not be able to find anything to cut.

However, for many people, it's the fixed expenses that are going to make all the difference because fun spending isn't that large a percentage of your budgeted spending anyway.

The best way to decide what makes sense for you is to take a look at where your money is going. If you already have a written budget that you are sticking to, take a look at it. If you don't, track your spending and review credit card and bank statements.

Once you have an idea of what you are spending money on, you can look at the changes you can make. If there are fun purchases you are making that you don't value that much, by all means, cut those out. But if there are things you really enjoy, it's better to budget for them from the beginning. 

Look for the big one-time changes you can make, rework your budget to put that money toward debt, and make a plan for a reasonable amount of fun spending that you can stick to over the long term. This is far more likely to make debt repayment a success and can be the best way to deal with credit card debt for good.