scissors cutting money

How much should I cut while getting out of debt?

Recently a reader wrote me to ask my thoughts on how deep one should cut when getting out of debt.

I’d love to hear your thoughts on charitable contributions and media services (Netflix, Hulu, Spotify, etc) while paying off debt. It’s a constant debate in our household. While these are easy-to-cut costs, they are also pretty low amounts in our monthly budget, so trying to figure out what’s worthwhile to cut versus not cut.

We have certainly had those debates in our household during this process, especially since starting The Year of No.

Subscription services

Before starting The Year of No, I was signed up for a few subscription services that I really liked, which included:

  • Five Four Club (now Menlo Club) a monthly clothing subscription: $60/month
  • My local gym: $42.69/month
  • Apple Music (family membership), for streaming music: $14.99/month
  • iCloud (one for me, one for my wife) for backup of phone data: $2.99/month X 2
  • YMCA Kids Night Out (not a subscription, but a monthly expense), used as our “sitter” for monthly date nights: $60/month
  • Ipsy, (for the wife, not me), a monthly makeup subscription: $10/month
  • Netflix, movie subscription service:  $10.99/month
  • Sling, TV/movie subscription service: $24.99/month
  • Backblaze, a computer data backup service: $5/month

Note: With Ipsy and the gym membership, those were paid for by reducing the weekly stipend I and my wife receive. For example, I typically take $30/week for my weekly stipend, so I reduced my weekly stipend by $10 each week to pay for my gym membership.

Total monthly subscription amount: $234.64.

At the beginning of 2018, we took a look at what we were subscribed to and decided to cut some things. Our goal was to hit a certain amount of money per month going to debt so we could be done no later than October of this year, and that meant that some things had to go.

We cut Five Four Club/Menlo Club, my gym, YMCA Kids Night Out, and Sling. My wife eventually ended up cutting Ipsy as well, bringing the total we saved each month by cutting some subscription services to $197.68. That’s right: almost $200 per month saved by becoming boring adjusting our lifestyle.

In addition, when we cut out the YMCA Kids Night out, we cut our date night money with it ($100) and additional eating out money ($50), brining the total monthly money saved to $384.64. There are probably some others in there, but it’s easy to see that by cutting out lifestyle down to bare bones, we have freed up a lot of money to put on debt each month.

The things we didn’t cut were weighed heavily, but deemed to essential to our lifestyle to cut, at least for now. In an extreme, worst-case scenario everything outside of the Four Walls — food, basic clothing, transportation and shelter (which includes utilities) — would be on the table. We’re not anywhere near a worst-case scenario, but The Year of No is teaching us just how far we can go to reduce our additional expenses, if needed.

Charitable giving

This one is trickier. Some people don’t give at all. Some people give a lot, and for different reasons. Many religions have giving built into their cultures. I have a friend who used to give regularly to his local animal shelter. I certainly know many who give freely to people in need outside of any organized religion or non-profit organization. I also know many who give their time and money to organizations working to help others in need, find a cure for cancer, and a multitude of other causes.

Learning how to give is very important to the development of your character. I often encourage people to visit to see how well off they are doing compared to the rest of the world. If you are reading this, then you are likely at least in the world’s top five percent in terms of wealth on earth.

I would love to say that giving is one of the most unselfish things I do, but that would be incorrect. I find giving to be incredibly selfish. Giving makes me feel fantastic, and I love to encourage others who aren’t giving to find some way they can make a difference in the world with both time and money: contribute, and see what happens.

Since we’re talking money here, I think it’s important to think about where you’re giving your money. If you have been giving regularly to an organization, it has come to rely on you as a steady donor. If you take your funding away, that organization has to find a way to make up the difference. That could mean additional fundraising, it could mean laying off staff, or it might mean that someone doesn’t get a benefit because your gift isn’t there anymore.

So my ultimate answer to “Should I cut my giving when getting out of debt” is: it depends. It depends a lot on what you’re giving to, how much, and what the implications of cutting off your giving might be. It’s possible you might need to scale back if you’re giving a really large amount each month, but generally I think you could keep your giving in place if you cut enough from your non essentials as we did. That’s what makes the decision about if you should give so interesting: it’s truly a heart decision instead of being only a numbers decision.

How you spend your money now will determine how quickly you get out of debt. But it also will speed up the amount if time until you can start giving more, which is one of my personal goals. I look forward to freeing up more money to give to people and causes that are dear to me.

I am selfish, after all.

4 thoughts on “How much should I cut while getting out of debt?”

  1. Although I am debt free, I still cut corners on some things in order to have more for other things. If you have a family member on Netflix, piggyback for free. This also works for other movie services. Instead of gym membership, pick up weights, weight machines, and other items at garage sales for pennies on the dollar, and use them forever (you will wear out faster than they will). I liked my free satellite radio for a year, but didn’t sign up when it ran out. There is still FM radio. Monthly clothing subscription??? My wife buys my clothes at Kohl’s from the 90% off rack. Giving…..fortunately, I am at a point in my life where I can give more, and I selfishly do give more. Like you say, it feels so good. But I never really liked receiving that much, and that is also selfish, since you are denying others the great feeling of giving to you. We all have to find our own balance. I highly respect what you are doing and enjoy following “The Year of No”. I see many start such a journey, but few can see it through. But you’ve got this.

    1. Jack, of the things I’ve missed that we have cut, Sling and the clothing subscription would be the top two. And Amy really loves ordering clothes online; she hates shopping in person.

      Like you, I also don’t like receiving that much. I feel like I have more than enough. It’s tough to balance that out. I will always take an experience over a physical item, so that’s an option for those who like to give to me.

      Thank you for your encouragement. You are right: we’ve got this! 🙂

  2. You can give in other ways than financially. One of the easiest things to do is to donate your time. Find an evening to do some work for a non-profit you agree with. Find a weekend to help out at the food pantry. Find a day off where you can help habitat for humanity. Donate old clothes, used toys, etc. to places that can do good with them. Whatever the case, you can give without spending a dime, and that’s an important skill. I firmly believe that while you’re getting out of debt, it doesn’t make sense to give your *income* to others–your own house is on fire, and there’s plenty of bible verses (if you’re so inclined) to support the argument that you need to take care of your own first.

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