4 Ways To Pay Off Student Loan Debt Without Sacrificing Your Entire Paycheck

The average graduate finishes college with over $30,000 in student loan debt, and many Millennials are underemployed and working in low-paying jobs that don't require a college degree.

If you've done everything you can to increase your income and you're still struggling financially, a spending ban might be a wise choice for you.

Spending freezes are often used to help kick-start debt payoff, build savings or declutter a home (or all of the above). A spending ban is difficult, and many people might be tempted to give up.

Follow these tips to ensure that your ban is successful:

1. Create a realistic plan.

What is realistic for one person isn't necessarily realistic for another. Maybe you want to do a week-long spending ban, a month-long one or a five-year spending freeze.

Do what works for you, and don't let anyone tell you that your plan is too extreme. Everyone has his or her own unique situation, values and preferences.

What you decide ultimately depends on how much debt you have, what your income is, what your goals are and how much you're willing to sacrifice. Keep those factors in mind as you create your plan.

2. Make a list of necessities and nonessentials.

Once you have decided on the length of your spending ban, the next step is to decide which items you consider “essential” and which things you aren't willing to buy.

The “essential” list will likely include non-negotiable items or bills such as rent, utilities, insurance and your phone bill.

It's OK to also include some items that aren't actually “needs”. If you aren't willing to give up your iPhone, Netflix, hair dye or whatever it is that you value, you don't have to.

Next, make a list of the nonessential items that you are going to cut out of your budget. This might include items like dinners out, new clothes, purses, expensive haircuts or manicures and new electronics.

3. Determine whether you are an abstainer or a moderator.

The distinction between an “abstainer” and a “moderator” is an important one.  An “abstainer” is someone who chooses to abstain from things (such as junk food or spending money) because this person has a difficult time handling things in moderation.

An abstainer who is on a diet may prefer to eat no cookies at all (rather than having just one cookie) because she knows one cookie could easily lead to 10 cookies.

Similarly, she prefers to avoid spending money altogether because she knows that spending $10 could quickly lead to spending $100.

A moderator, on the other hand, feels restricted when given such strict rules about spending or dieting. A moderator who tries to avoid cookies completely or spend no money will feel frustrated and may end up binge-eating 20 cookies or going on a shopping spree.

The moderator would rather eat one cookie and spend $10 here and there. This satisfies her, and she is not tempted to eat (or spend) more.

A spending ban is a good option for an abstainer, but it probably isn't the best choice for a moderator.

If you're a moderator, it may be smarter to simply reduce your spending. With the more extreme approach of a spending ban, you might be tempted to “binge” and go on a shopping spree.

4. Communicate your plan to others.

It's tough to stick with a spending ban if your friends are constantly inviting you to go out to dinner or bars every weekend. Be upfront with them and explain the situation to them.

If you're willing to make some exceptions (for example, grabbing coffee once a week), tell them. If you're going to be more strict about your ban, be clear about that.

Let them know you still want to spend time with them and that you value your friendship. Initiate get-togethers that are free, such as going for walks, hikes or bike rides, having a board game night or checking out a free class.

A Final Note

Spending bans are an awesome way to drastically cut your expenses so that you can pay off debt, kick start your savings or simply learn how to live frugally.

Spending freezes are challenging, and you may be tempted to give up. To ensure your ban is successful and you are able to meet your debt payoff or savings goals, follow the steps described above.

Create a realistic plan, outline which items will stay in your budget and which you will cut, determine whether you are an abstainer or a moderator and clearly communicate your plan to others. You can do this.