Cutting expenses may seem challenging at first. But several categories can be eliminated without any loss to quality of life.

The journey to racking up credit card debt might have been fun for some people. Spending money you don’t have on vacations and eating out doesn’t initially hurt. But the pain certainly arrives like a locomotive train out of nowhere. Stress, shame and embarrassment take over your life when the pile of credit card debt looks as big as Mount Whitney.

Not everyone in credit card debt purchased luxury items to get into this mess. Some may have had a medical emergency or other circumstances beyond their control. But too many people end up in debt due to one common reason – overspending. After all, each time we swipe a credit card, we are likely purchasing something we can’t afford. Otherwise, we would be using cash.

Now that you are facing a large mountain of credit card debt, what is the best way to pay it back? Plenty of options and companies are available to help. But nothing works unless you change your behavior and tackle the root of this problem. And the root of the problem is likely overspending.

There is no quick fix to a financial hardship

Too many people want to simply click a button or swallow a magic pill to escape from their financial hardship. But the best solution comes from riding a pink unicorn toward the pot of gold at the end of the rainbow. Never mind, that only works in fairy tales. The real solution comes from hard work and a massive transformation in your spending behavior.

If you are struggling to make more than the minimum payments toward your credit card debt, increasing your monthly income and/or decreasing your expenses are essential. The journey will be tough but the end result will be worth it.

Here are 12 expenses to reduce or eliminate when facing a financial hardship:

1. 401K/Retirement Contributions

If you’re struggling to pay back credit card debt, you need to pause all contributions to retirement. Credit cards often carry interest rates in the 20-30% range. While your 401 (k) might return 6-8% per year on average.

Expedite your debt free date as quickly as possible. Then once you become debt free, you can resume contributions. Never borrow from your 401K or cash it out early. The penalties are severe and will cost you thousands of dollars. Paying off high-interest debt is often a guaranteed “return” that beats the market. Focus intensely and solely on this one goal. Trying to accomplish two goals at the same time can be a struggle. You might have better success juggling bowling pins while on a unicycle.

2. Contributions to Savings

Too often we hear people trying to build savings while possessing thousands in credit card debt. When it comes to financial goals, it’s imperative to focus on one goal at a time. Understand your priority.  And priority is defined as a thing that is regarded as more important than another. If paying off debt is your priority, then all excess cash needs to go toward the debt. It’s ok to have some savings while in debt, but no more than $1,000.

Take the example of someone with $30K in credit card debt that has $10K in savings. The 29% interest charged annually on credit card greatly outweighs the average .38% annual percentage yield.  Another example is someone with $20K in credit card debt with no savings. Would it be a wise decision for this person to borrow another $10K and then put that amount in Savings? Absolutely not.

 

3. Travel

We all love a good vacation. Especially to escape stress from working long hours. However, when you are significantly burdened by credit card debt, vacations should be eliminated. Dave Ramsey has a quote he repeats over and over with his audience when facing a financial hardship. “Live like no one else so later you live like no one else.” He implies that living a frugal lifestyle while paying off debt will allow you to enjoy the freedom later in life. Today’s sacrifices will lead to tomorrow’s fortune.

How to Cut Travel Expenses

Instead of spending money on lodging and airfare, discover cost-friendly activities within a 30-mile radius from home. For example, watch a sunset by a lake.  Have a picnic in the park. Refrain from spending money vacations until your credit card balance reaches $0.

 

4. Entertainment

Perhaps the most “common sense” category to cut out of them all. Entertainment needs to be zero right away when experiencing a hardship. This includes movies, concerts, sporting events, golf and any other hobbies deemed unnecessary to survive.

How to Cut Entertainment Expenses

It doesn’t mean you need to be miserable. Alternatively, you need to find free fun things to do.  Find free events in your neighborhood. Host game nights with friends.  Temporary sacrifice gives you more control, stability, and confidence. Once you're debt-free, you can spend on entertainment without worry.

 

5. Eating Out

The average cost of a fast-food meal has soared to nearly $12 per person. For a family of four eating out twice a week, that would cost $96 per week. That’s more than $400 per month. Now imagine throwing an extra $400+ toward your credit card debt each month. You would have your debt paid off in probably half the time.

How to Cut Eating Out Expenses

Obviously, you will need to buy groceries and cook at home. But the savings will be significant. Pack a lunch everyday to work. It’s one of the easiest lifestyle changes that can make a big financial impact.

6. Clothing

We all need new clothes at some point. Otherwise, we would eventually be walking around naked.  But do we have to purchase trendy, high-end clothing? Absolutely not. Take a glance at your closet. And then ask yourself is it worth staying in debt or getting into more debt to replace these clothes? Maybe what you have is good enough. Many people forget what they already have.

How to Cut Clothing Expenses

Wear something you forgot about. Try new outfit combos with existing pieces instead of buying something new. Children constantly outgrow shoes, shirts and shorts. And they need to move up to the next size. Swap clothes with family and friends. Send your child’s hand me downs to one family and receive some from another family.

Reducing clothing expenses is about being intentional - buying less, avoiding impulse purchases, and getting the most out of what you already own. It’s one of the easiest ways to free up extra money for goals like paying off debt.

 

7. Gifts

Gifts are typically listed as a discretionary expense category. This means they’re not essential but are common and expected. Perhaps the majority of the spending on gifts occurs during Christmas. Additionally, you have birthdays, weddings, baby showers and graduations.

How to Cut Entertainment Expenses

Spending less on gifts doesn’t mean being less thoughtful. It means being intentional and creative. Communicate with everyone that you have credit card debt you intend to pay off. And let them know you can’t afford gifts right now. Hopefully, in a couple of years though.

 

8. Cash Donations/Tithing

Our faith has led us to give back. Tithing has become part of life. Ten percent of our income goes to the church with no questions asked. But when your credit card debt has you stressed, it’s time to hold off on cash donations. Most religious and spiritual leaders understand that seasons of financial hardship may require adjustments. Tithing is typically based on your ability to give. It should prevent you from becoming debt free.

The Bible references debt in various forms more than 70 times. Many verses address borrowing, lending, and owing money. Proverb 22:7 says “The rich rule over the poor, and the borrower is slave to the lender.”

How to Cut Cash Donation Expenses

Have a conversation with your church leader. Tell them you feel like a slave to your lenders. Many will support your decision to focus on becoming debt-free while still honoring your faith. Instead of cash donations, offer other ways to help. Volunteer a couple hours each month. Donate some unwanted items to your church. But most importantly, maintain your values and your faith while becoming debt free.

9. Gym Memberships

Exercise offers a wide range of physical, mental, and emotional benefits. Many of which kick in quickly and build over time. The relief from your financial hardship might be a requirement for some people. However, there are other ways to exercise without the monthly expense.

How to Cut Gym Membership Expenses

As an alternate solution, consider exercising from home or in the park. Do some research on exercises that do not requirement. Push ups, planks, jumping jacks and sit ups are prime examples of equipment free workouts.

 

10. Cable/Streaming Services

Back in the 80’s and 90’s, we only had one cable bill to worry about. Of course, we had the Blockbuster or Hollywood Video rental fees as well. But now, the video rental store have been replaced by streaming services. Examples include Netflix, Disney +, Hulu, Amazon Prime and Max. The average person household subscribes to about 3-4 of these services. That adds up to an additional $70.

How to Cut Cable/Streaming Expenses

Consider cancelling multiple streaming services to escape from your financial hardship. Anything you haven’t used in a couple weeks should be cancelled. Also, look into free ad-supported platforms such as Tubi, Pluto TV and Crackle.

 

11. Purchasing (or Leasing) a New Car

According to Experian, the average new car payment came in at $745 in Q1 2025. This hefty payment plays a vital role in causing too many people to live paycheck to paycheck. Too many Americans believe they need a new car. And if by any chance the dealership will approve them for a loan, then what a victory it is. Not really.

The reality is when you have thousands in credit card debt, you need to transition to a frugal lifestyle. Buy a used car instead. Save up and pay cash for it.

12. Purchasing a Home

If you are looking to worsen your financial stress when it’s already bad, then purchasing a home will do the trick. Homeownership comes with hidden cost. Air conditioner repairs, tree trimming services and replacing the hot water heater are prime examples of new expenses you will occur as a homeowner.

Having a healthy emergency fund and $0 credit card debt comes highly recommended for first time homeowners. Don’t rush into a new home because a friend tells you that you are missing out on the investment. Instead, wait until you are credit card debt free.