Christopher Liew: The smart way to pay off debt without feeling deprived

This personal finance column by Christopher Liew offers some advice on how to pay off your debt without sacrificing your happiness or a social life. (Getty Images / MicroStockHub)

Christopher Liew is a CFP®, CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers at Blueprint Financial.

Paying off debt often comes with the expectation that you’ll need to cut out everything that makes your life enjoyable. This means no shopping, no dinners out, and no vacations.

While tightening your budget can speed up your progress, going to extremes can leave you feeling discouraged and deprived. And when a repayment plan becomes too restrictive, many people end up abandoning it altogether.

The reality is that debt repayment doesn’t have to mean putting your entire life on hold. It’s still possible to make progress while still enjoying small pleasures along the way. You just need to strike a balance between responsibility and life enjoyment that keeps you motivated, consistent, and focused on being debt-free.

Pay off debt without sacrificing your happiness

At the end of 2024, Equifax Canada reported that Canadians’ total consumer debt topped $2.56 trillion, and that mortgage delinquencies were over 50 per cent higher than pre-pandemic levels.

Economic fluctuations over the past five years have driven many to open new lines of credit to make it through temporary job loss, rising grocery costs, and increased cost of living.

Even those who managed to get back on their feet may still be faced with years of repaying debts they may have incurred. With the weight of this on your shoulders, it can be easy to avoid the problem, continue making your minimum payments (which often keep you in a debt cycle due to high interest), and seek reprieve in simple pleasures.

If you want to make a real impact on your debt, though, you’ll need to make some sacrifices. The more you’re willing to sacrifice, the quicker you can get out of debt. Here are some tips to help you get out of debt quicker, while still being able to enjoy the things that make you happy.

Automate your debt payments

Set up pre-authorized payments to withdraw immediately on payday, before you have a chance to spend the money. Automating your debt repayment removes the emotional weight of choosing to make a payment each month and reduces the temptation to skip it.

If you want to take it a step further, try automating a small additional amount like $25 or $50 per paycheque put towards higher-interest debts (made in addition to regular payments). With time, all of these automated payments will snowball and help you pay off debt faster with less stress.

Schedule outings and set limits

One of the things holding you back from paying down your debt quickly could simply be saying “yes” to going out too often. Instead of cutting out social spending entirely, structure it.

Whether it’s once a week or twice a month, schedule the days or events that you want to go out and have fun. Then, set a clear spending limit for each outing.

This approach allows you to maintain a social life, enjoy time with friends and family, and avoid impulsive overspending.

Turn debt payoff into a challenge

When paying off debt feels like punishment, it is hard to stay motivated. Instead, turn it into a game.

Try a “no-spend weekend,” a weekly savings goal, or a 30-day challenge where every time you skip a purchase, you send that amount to your debt. Use a simple tracking sheet or a debt tracking app to see your progress in real time. Small wins keep momentum going and make the process feel rewarding.

Improve your credit score to lower interest

Sometimes debt feels endless because interest keeps piling up faster than your payments. If you improve your credit score even slightly, you may qualify for a lower interest rate, a consolidation loan, or a better credit product. A lower rate means more of your money goes toward the balance instead of interest.

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You can take small steps to improve your score, such as making automatic payments, keeping your credit utilization low, and paying bills on time. It also helps to monitor your credit regularly.

Free tools like Credit Karma, Borrowell, and Mogo let you track your credit score, get updates, and receive tips without paying anything. Checking in monthly makes it easier to see progress and catch mistakes early, which can also help your score.

Audit your subscriptions

Most people are paying for several subscriptions they hardly use. Take a few minutes to review your bank and credit card statements and cancel anything you do not need.

Even cancelling two subscriptions can free up twenty to sixty dollars a month that you can redirect to debt payments.

Become a savvy thrifter

Enjoying nice things isn’t the problem; paying full price for them is. Thrifting allows you to maintain your personal style, hobbies, or home aesthetic without putting massive holes in your wallet.

Shop at consignment stores, liquidation stores, or online platforms like Facebook Marketplace, Poshmark, eBay, and Kijiji. Many quality items, from clothing to shoes, electronics, tools, and furniture, can be found gently used at a fraction of the cost.

Keep your goal in mind

Throughout your debt repayment journey, make sure to keep your goal in mind. Think of how much less stressed you’ll be once you pay off that personal loan or how you can continue to save even more once you pay off your credit cards and your credit score improves.

Making small sacrifices without giving up everything will help you stay consistent with your finances while allowing you to continue enjoying the things that make you happy and maintain an active social life with your friends and family.

More from Christopher Liew:

• Credit card habits that are putting Canadians deep in debt
• Benefits and drawbacks of renting versus owning
• How to catch up on retirement savings and secure your future
• Why lifestyle creep is hurting your savings more than you think