Escaping the cycle of debt.

I’ve been carrying debt for most of my adult life, but since the middle of the last decade it’s been a huge weight. It’s my own dumb fault, of course – my IT contract ended but I couldn’t let go of the lifestyle of a freewheeling consultant as it was at the end of the 90s, when they told us the IT world was paved with gold. Two long years of minimal employment gave me a reality check, and I kept afloat using credit cards and lines of credit. Combine that with long-term student loans and I have way too much debt for someone without a mortgage. I’ve since found stable employment with decent wages, but far too much of each cheque goes to various banks and institutions. I managed to get a consolidation loan last year for outstanding credit debt, but I’ve found it impossible to avoid new charges which carry an additional burden. I’ve staunched the bleeding, more or less, but it’s still slowly building.

I remember well how bad it was just before I got this job, with the constant phone calls, juggling payments, etc. I’ve since repaired my credit rating to the point where I’m apparently one of the nation’s trusted, but I figure that’s because I’m an ideal debtor: I carry a huge balance but always make my monthly payments. I dread being laid off and returning to that life of call dodging and imminent bankruptcy, since I have no savings to speak of. I’m also 40 now, so retirement isn’t as distant as it used to be.

Anyone out there in the same boat or been there before, and/or have any advice? I’ve read books like the Wealthy Barber, but I found that mostly a statement of the obvious. In a world of credit and easy virtual payments for just about everything, tying it all to a concrete plan of saving dollars and cents has been very hard for me to do.

Sit down and determine exactly what you have to have per month/week (depending on your incomming paycheck). Then take the rest and throw it at the institutions. Nothing else is going to work in the long run. Within that you can budget small , I must have something fun bits but generally everything goes to the payoff. The sooner you get it done, the better you will live.

Let me make that more concrete.
Inserting virtual numbers..
Say rent is 1000 a month
power is 300
food tends to run around 150 a week say , so 600
cable/phone/internet whatever combination you have 100 or less.
car insurance, budget this like a monthly expense so that you have it when it is due
every single other penny that is not going to the basic needs goes to bills, sometimes you are going to put very little in because hey underware, shoes, tires..
sometimes you can put all the extra income, maybe some of the food. As much as you possibly can put in. Do not reward yourself for doing this, reward yourself for taking off significant chunks. If at all possible by NOT adding more to the pile.
So no reward for monthly deposit on the mess, but if you get things down by 5k , pay the minimum that month and use the rest for something nice.

That is how I work it, now if my other half would abide by the rules.

We will be debt free except for the mortgage in a few weeks. I've had some credit card debt since I was in my early twenties, mostly because of unemployment stints with inadequate savings, and occasional added to because I am too easily tempted by credit cards. There were times when it was really depressing, and I would just try to ignore it and pay the minimums, but I decided to get serious a few months ago. We have a windfall which will retire it, but we were paying it off in significant chunks each month before that.

I read Elizabeth Warren's book and it really stuck with me. It's simple but sometimes simple is effective. You figure out your legal obligations and basic needs: basic food, shelter, insurance, transportation. That should be 50% of your take home pay. Then take 20% and apply it to debt, then savings once the debt is retired. Then the 30% that's left can be spent on the fun stuff. If your needs cost you more than 50% of your take home pay, you need to figure out what you can do to reduce them. (Move, take in a renter, shop around for insurance, etc.)

She recommends switching to cash for most spending. I REALLY like doing this, even though it is a hassle. Your sense of your money is so much more finite, and you can always tell how much you actually have.

(Pre-edit: I see that my lovely wife posted in this thread while I was typing this. This is to expand on what she said, then.)

I have. I've been in pretty dire straights before, got my head above water at least just by starting to make a little more money, and stuck in a boat similar to yours for a number of years: carrying some debt, making payments, living comfortably enough. About six months ago we decided to get really serious about tackling our debt, and we'll be debt-free (mortgage excepted) by this time next week. That timetable has been accelerated a bit by a windfall, but it was on track for January anyway, still far less than a year. Here's how you do it:

1. Read this. Not because you necessarily have to be as ascetic as that guy recommends, but because you need to understand just how much of a screwjob credit is. I think most people understand intuitively that buying things on credit isn't great, but it's much worse than most people realize. It is basically the devil incarnate, and you need to understand that and fully commit to removing it from your life and never financing any purchase again unless it's a house.

2. Now read this. It describes a rule of thumb for what to do with your money espoused by Elizabeth Warren (aside: if you want to read more, her book on the subject is quite good as well) and others, which boils down to: a) understand the difference between something you want and something you need, b) try to get your needs down to 50% of your after-tax income or less, c) set a hard cap of 30% of your income to spend on wants, and d) save all the rest.

3. What if I told you that I had an investment opportunity for you that was risk-free and that had a guaranteed annual return of over twenty percent? Best investment in history, right? Well you're in luck, because that's what paying down your credit card debt is. There's no better thing than this that you could ever do with your money, because the outcome is one hundred percent predictable, and since you know how much they're costing you in interest you know how much you won't be paying in interest if you pay them down, which is just as good as actually earning that interest given the state you're in now. Because of that, all of the money that gets funneled into you "save" pile except for a relatively modest cash reserve for emergencies should go straight to your debt, where it will do by far the most good.

And that's it. It takes some discipline, but what's good about this approach as opposed to a more austere one is that it still does give you money to spend on whatever you want, it just forces you to do the math on just how much that really is, and you'll probably have to decide between things you want from time to time as a result. That won't really bother you much though, because paying off debt is one of the best feelings in this life. I've never played new release video game or eaten an expensive meal that made me feel as good as getting rid of debt has.

Pay down the highest-interest debt first. Don't buy the bullshit about "pay down the smallest ones first for a psychological boost," I've done the math and that can mean extra months and even years depending on how disparate your interest rates are.

If you have good credit now, don't be afraid to apply for a new card if it can offer 12-18 months interest free on balance transfers. Even with a 3% one-time fee on the transfer, you'll save money starting at the third or fourth month which means that the same dollar amount of payments in that duration on the remaining balances with interest will pay down a greater amount of debt.

If you have good credit now and a good payment history, call each of your creditors and request an interest fee decrease. It's a long shot but I've had it work for me before.

As extarbags said, paying down debt is an investment in your fiscal security. Every dollar you pay earns you 10%-20% in interest essentially by virtue of you having more money down the line from reduced interest expenses.

To be pedantic as hell, there's two ways to do it:

1. Pay off your highest rate (after including taxes; student loans are usually dead last) first.
2. The Dave Ramsey way of paying off the lowest balance first. No, I don't get it either.

Getting the spare cash every month to do this has three methods:
3. Refinance.
4. Spend less.
5. Get a higher paying job.

There's not really any magic. I got out of credit card debt by #5 + #1, but I got lucky. I thought tracking everything I spent down to the penny in Quicken was helpful - boy, did I ever spend too much eating out - but it wasn't absolutely mandatory.

1, is the mathematically correct method in order to pay the least that you possibly can and makes the most objective sense. 2, is for those who have anxiety or other psychological issues around their debt and having fewer debtors gets them some peace of mind and makes them feel their debt is more manageable. Yes you pay more but for some it does make the process more manageable and the peace of mind might be worth it. Also if it helps them get the process started and they feel like they're getting ahead they're more likely to continue and be successful.

My wife had debt issues when we first met, she used some sort of debt management service (I'm not sure which). No consolidation loan was done, they simply acted as a proxy so she made one monthly payment (possibly bi-weekly, I don't remember) to them and they managed payments to her debtors paying down the highest interest rate first and minimum payments to the others I believe. They didn't manage student loans though they did provide advice for managing it. They basically advised her to make the absolute minimum or even stop the payments entirely and put whatever she can against her other debts. I believe she started by suspending her student loan payments, which I believe you're able to do without penalty (though you do incur interest) for some amount of time (6 months or year maybe?).

Definitely track your expenses in quicken or mint.com or whatever; like Jason I discovered I was spending a ridiculous amount of money eating out. Like, I knew I spent money eating out (a few lunches per week, maybe a dinner with friends on the weekend; or that's how it seemed) but it turned out to be way beyond what I'd imagined.

I'm sure I spend far too much eating out, even though I make an effort to bring my lunch to work 3-4 times a week. It's amazing how fast it adds up. I noticed this years ago when I was living in Toronto and working for a shitty game company that required 60-80 hour work weeks. It was incredibly hard not to eat out daily (often twice) in those conditions. When I said fuck that and started going home at a reasonable time and making my own dinner I was saving quite a bit of money. I needed it too as I was soon fired for not working the mandated hours (and generally being bitter about the place). Best thing that could have happened to me though.

Back when I was working zany hours on Zune, they at least catered dinners for those of us who were working late. So there was that!

We're doing a Dave Ramsey hybrid to tackle Mr. Alligator's student loans. He's got three different lenders, and each lender has several loans, so we're paying off the lender with the least amount of money owed first (it also helps that our lowest-rate loans are through Fedloan, and Fedloan also carries the highest total balance, so it gets paid off last no matter what method we use). We 'accidentally' paid off one lender already (a one-time large payment was set up incorrectly as a recurring payment... whoops), and it felt great to have one less institution to pay down to. The monthly payment to that lender now goes to the next lender we're trying to eliminate, so our total monthly payments for loans haven't actually changed.

My favorite method for keeping credit card debt from re-accumulating after paying it down is to freeze it in a cup of water. That way if you REALLY need it, you can still get to it, but you have to let it thaw out on its own to keep from damaging the card. Then you have that thaw time to consider whether you really do need a line of credit to pay for whatever it is you think you need (emergency car repairs vs. OMG NEW VIDEO GAME/PAIR OF FANCY SHOES/HUGE TV).

The most drastic savings for us, as far as variable monthly necessities, has been in groceries. I went through a program last year that budgeted $4.50/person/day for groceries. It works! You can't always buy frozen food, soda, large amounts of meat, or other nonsense, but once you get onto it and make it work, you'll find that it's actually pretty easy to spend even less than that (and your savings from that budget can then be used on treats at the end of the month--that lobster dinner you've been craving, or maybe something as simple as your favorite salty snack or an extra cut of meat). The hardest part on that plan is if you are starting from scratch, but presumably you already have a fairly well-stocked pantry. Hubby thought I was crazy when I came home to live with him again; he was averaging $70 a week just for himself. We're down to about $50 for both of us, and the extra $13 goes towards a bottle of wine or liquor every once in a while.

Hubby also uses Mint.com to track all of his accounts. He likes it because he can see his loan debt decreasing over the long term. He hates it because we still exceed the 'dining out' budget we've set for ourselves. That's probably the hardest habit for us to break.

We're really bad at saving, though. We like to travel, and our family is pretty far from us, so we indulge in that probably too often. However, when he travels for work, he pays up front for his expenses and then gets reimbursed by his employer. Those reimbursement checks for some reason can't be direct deposited like his salary is, so those go straight into our savings account.

Not sure what your Zune project was like but I'm sure it wasn't the same as your Zune project. First, this was an independent game developer, not MS. Second this wasn't an odd case of crunch for a few weeks or even a few months, this was the daily work policy, it had gone on for years. The company was still trying to sign a publisher and there were no external deadlines that needed to be met, hell there weren't even any internal ones. The whole place was a cluster fuck. We were literally coming into work each day with no goals and just throwing the proverbial shit against the wall to see what stuck.

I’ve been trying to cut back on the junk food and generally eating out (for health as well as financial reasons), but it’s difficult to sustain. We generally do several pizzas a month and weekly fast food trips, and I often pop into various places in the Ottawa Market while on my lunch break. It all adds up rapidly, as pointed out. Last night I forced myself to go out to the grocery store to put together cheaper foods for the week. Today I have hunks of bread and fruit for lunch, heh. I’ve bought too many gadgets this past year as well, which certainly stretches the finances. If I were to switch to cash only I’d be horrified at the outlay on these things, I’m sure. It’s very difficult to do though these days. So many things are tied to credit, it’s like a modern stake in the ground. That's especially true for any kind of online shopping - I used to walk into an EB Games with cash in hand, but in the world of Steam it's credit all the way.

Paying down the highest interest rate is logical, for sure. For me, that's also the company hounding me the most about this or that special offer – 3% back on every purchase for six months, etc. They’ve offered a balance transfer to a new card as well, but I’ve been sceptical of that. Even if I have an interest free period the cards always seem to always have significantly higher interest rates once that time expires. I’ll see if there’s any exceptions to that though. I hadn’t heard of the Warren book either, but breaking down my finances in that way is a good first step.

A test for me right now is that I’ve topped out my Canada Pension Plan and EI tax deductions for 2012, so my pay cheques are higher for the remainder of the year. The temptation is to spend spend spend (that new Xcom looks pretty good…), but I’m going to try and be sensible about it.

Thanks for the advice all, I appreciate it.

This argument has been had a million times by a million people but this is a really cold way to look at it. Not everyone is a mathematical robot like us and psychology matters. Paying down smaller debts can add months or years, but if the morale boost is the difference between sticking with it or giving up then what is accomplished by stubbornly sticking to the mathematically optimal method?

Oh, I'm sure it was different! I wasn't clear enough in my post: I was commiserating with you and approving your decision to stop staying at work and buying your dinner out. If MS hadn't been buying me dinner I probably wouldn't have stayed late to work nearly as often.

I use a fairly elaborate Excel spreadsheet to manage my student loan debt. It is set up so that I can put in a repayment period for each loan individually or one standardized period, which spits out the monthly payment necessary to hit that period, the aggregate amount of which is included in the overall budget calculation that starts with monthly take-home pay and subtracts budgeted amounts for other expenses. Occasional checking on Mint reveals that I am overspending some of those budgets in most months, but they are pretty aggressive (as is the repayment period target). It also shows the total amount paid over the life of the loan depending on the repayment period, which I find useful as a way of discouraging backsliding on the aggressive repayment strategy. It also also shows the minimum amount I need to earn after taxes each year to keep on a given repayment schedule, which is useful when evaluating job alternatives.

For those of you with significant student loan debt: is that private debt? Or is it like gov't loans?

And this is why I throw everything into Excel: as psychologically tempting as it might be to knock off the smaller debts first, the cold, hard reality is that doing so adds (for me) tens of thousands of dollars to the amount I'm paying back on the whole, and extends the amount of time necessary to complete repayment by at least a few months.

There wouldn't be a morale boost if people were shown how much they would save if they pay the exact same amount of money but do so optimally.

People get into these situations because of varying reasons, among them often is not realizing the consequences of compound interest. Teaching them the correct way to do things is better than giving them a bullshit feel-good bubble that ends up costing them thousands of dollars more in interest over the long term.

Mine is all government loans, thankfully. Slowly but surely they are all being consolidated into Sallie Mae.

Yep, and that's the point.

We still buy a few things online. Amazon is too convenient to give up. But let's say I get $1000 in my paycheck. Here's how I manage the nuts and bolts:

$500 goes into a joint account that we use to pay the bills.
$200 goes to debt or savings

That's before I even get my grubby hands on it. Then, if I know we have some online purchases planned or recurring fun stuff like Netflix, I'll leave some money in my checking account. So maybe $260 comes out in cash, and we divvy it up. I hide a $20 in my car and a $20 in my sock drawer in case, whoops, I forgot about a baby shower at work. Then I spend it with NO TRACKING (which I love) on whatever I want. Including lattes and eating out, if I so choose. But once it's gone, it's gone.

That's an interesting way to do things. I'll have to see how it breaks down for me and what would be left over (if anything). Mint.com looks like a good tool for that, I'm going to set that up.

Congratulations to you and extarbags for beating the debt monster, btw. That must be a great feeling.

I lucked out and had only gov't loans. My repayment was mostly covered by my job last year; there was a (taxable) education award that could be used towards school or qualifying loans. The rest of it was covered by what I had saved up out of my stipend. I paid it all off just 14 months after graduation.

Hubby, on the other hand, was not so lucky. His debt is sizeably larger than mine was, and because his mom is self-employed, her taxes were always late, and he missed the FAFSA deadlines every year. So he has a mix of private and government loans; half of his debt is in his name, and the other half is in private loans his mom took out in her own name (he is paying down on all of them, though). We're trying to get through the private loans in his name first, because they're less flexible about consolidating versus the government loans. We're debating putting the loans his mom has in his name, since he's the one paying them, but our credit report looks better without them there, and if we look to buy a house before he gets them all paid off, we're in better shape with those not showing up.

And not paying any of it is the worst case.

I'll agree making the optimal repayment scheme is the best but psychology is a reality and making any payment is better than no payment. Most people operate more on feeling than on purely mathematics. Just because you can see the forest through the trees doesn't mean others are the same. Little victories to build confidence and reduce the size of the perceived mountain works for a great number of people. Once people feel they have a handle on the situation they can change up their strategy. Paying off one or two debts can go a long way to making people feel like they can handle what seemed insurmountable and were afraid to start

I think the psychological impact is overblown, and if people are educated properly and shown mathematically how much they will save using the two different methods, then they will opt for and succeed in the optimal one. It's not very hard to use an interest calculator to show how much can be saved in either scenario.

My wife and I work out things very similar to Marged and Extar. We split our finances like this: I take care of rent and utilities, anything after that is mine to do whatever with. I have my work take a percentage off the top for my RSP, so that goes right into the bank without me even seeing it first. My wife covers all the food expenses (she makes less than I do), other stuff like the dog, and any larger-ticket items. She's not a financial child like I am, so she ALSO saves a bunch into RSPs.

So it breaks down like this: I pull about $120 a week out of the bank (because I love cash, and looking at money in a wallet is a much stronger indication of "spending money" to me than looking at numbers on a receipt), and out of that I spend it on anything I want. Work lunches, CDs, blurays, games, whatever. I never have to track it.

Now, granted, we are very clear about living a lifestyle where we can basically live like giant manchildren. We don't have kids, we don't have a car, and we have zero debts. If I spend anything on a credit card (which has an ABSURD limit on it, which makes me laugh every time I see it), I IMMEDIATELY pay for it through my bank's online banking stuff.

Right now, we have literally one whole year's of expenses saved up. As in if I were to a) lose my job, b) not be able to collect unemployment, while c) at the same time my wife's store went bankrupt and she was no longer bringing in money, we could live our exact same lifestyle for ONE FULL YEAR before we had to worry about getting a job. That's a nice place to be, for sure.

Oh, and in case anybody's curious, weed falls under "utilities".

This rings true for me. I'm actually very sympathetic to the psychological argument, but I changed my tune based on a simple thought experiment courtesy of (iirc) Elizabeth Warren again (I apologize if she isn't the real source for this; Marged can correct me if not). She basically recommended a similar approach when applying a small windfall to debt, only she rephrased it as "whichever debt you hate the most." That made me rethink what it meant for me to hate a debt, and I realized that the best reason to hate a particular debt more than the others is that it's costing you more money than the others.

Thanks. extarbags is over the moon, I am ... I don't know, mixed about it. Not the being out of debt part, obviously that's a huge relief. It's more fear of backsliding and worry that I won't be able to save the same way we've been able to pay down debt. It's easy to say "Never again!" but I know people say "never again!" and end up in debt in five years.

I think money is so emotionally complicated. At least, it is for me. Learning to face it and not stuff your head in the sand is half the battle.

I do really recommend doing that, though. We use mint.com which is free, effortless, and horrifying. I think that most people don't realize how much they could cut their spending and barely even notice it, and as you said I think eating out is a huge culprit for most people. Just coming up with a few quick and easy dinners you can make yourself and pre-making some lunches to take to work with you can save hundreds of dollars a month without worsening your quality of life even a little bit (and in fact very possibly improving it).

I apply all the rules set out in this thread, and they work, but I'm convinced I will never get out of debt. Every time I see sunlight, life drops two tons of dirt on me. I won't quit, but man it's getting old... I'm seriously considering getting my first tattoo,

Nanakorobi yaoki - fall seven times, stand up eight

I think one of the best ways to guard against despair about your debt situation is to bear in mind that there are a lot of people whose debt situation is way, way, way worse than yours. And it's even possible for most of those people to fix things, so it should be comparatively pretty easy for you to do it. In that regard (and in that regard only), the collections job I had at a predatory credit card company was a valuable experience.

I've got an excel spreadsheet that I use to show me how much money we're taking in every month, how much of it goes to bills, how much of it goes to food/entertainment, and how much of it SHOULD go into savings. Then a little column of what DOES.

Whenever we pay something off, that payment goes towards something else. Whenever I paid off a student loan, I put that payment onto another one each month until they were gone. At this point we've paid off all of Bahimiron's credit cards, all my student loans, and we're about to pay off the car at the end of the month. That'll leave us with just the mortgage and one credit card--which we do tend to run up, but we'll be paying that nearly all off by the end of the year.

I really recommend using something to track where your money is going. You don't need to know exactly where at first, but if your sheet is showing you that you should have $500 extra every month and you're constantly overdrawn instead you can then sit down and be like "Where the hell does that money go?"

And eat out is a HUGE one for us.

I feel the same way. Every time I feel like I'm making progress, BAM - $1500 car repair.

But that's still just a psychological approach to debt management. Hate isn't rational. You might hate a particular debt more for any number of reason, perhaps harassing phone calls or maybe you just hate that you got into a financing situation with a retailer you haven't had a good experience with.

You took what she said and made some logical deductions about which debt is actually the most harmful to you and not the one you might have the strongest emotional reaction to. Congratulations you did the smart thing and I'll be one of the first to say that money and finances are purely mathematical and should be approached as such but that's not the case for the vast majority of people. Most people see their financial situation as an indictment of themselves. Regardless if you've been irresponsible or just had some bad luck, feeling shitty about it isn't going to get you out of the hole. Getting people to feel better about their financial situation is a big factor in helping them get debt free and being able to strike a debt off the books is a good feeling.

I don't think the psychological part is overblown at all, if it were there wouldn't be so many people having to deal with difficult to manage amounts of debt. Society puts an enormous amount of pressure on people to have a good financial situation and being in significant debt is something most people find shameful and would rather ignore it than admit it and do something about it. I'll agree that education and doing it optimally is best but not everyone is ready or capable of doing that out of the gate. Getting that $500 debt then that $1000 one paid off can make people feel far more confident and in control of their situation and enable them to handle the $20000 they may have left in the best possible way rather than starting off and feeling like you're getting nowhere for years.

No, I agree with you completely. But I like that way better than the "just pay off the lowest balance first" way, because it's both more personalized and has the potential to yield better financial results. But the main thing is getting the debt paid off, and I applaud anyone who does that or is working on doing that because I know how hard it is, and it really does annoy me when I hear someone criticize someone else for not paying off their debt in the "right" way.

Whatever you do, don't pay a "debt settlement" company for help. At best they will just help you make a plan, similar to the good suggestions here, and at worst, fuck you over. Generally they have you set up an auto-pay to an account they control, so that you can't raid it. Often they suggest letting all your debt payments slide so that you can save up a substantial sum (in their account), then once they have a nice chunk of money from you they will make an offer to settle your debts at a discount. Despite the promises made by these companies, the creditor has no obligation to accept the offer and in the meantime you are building up late fees, interest, penalties, etc. Not surprisingly, this usually does not help your credit rating. The debt settlement companies tend to pay their own fees first out of the account. It's not unheard of for them to suddenly disappear with their client's money, or declare bankruptcy and gosh, all the money's gone.

In the US there is a similar service available called "Debt Management Plan" offered by non-profit credit counselors, which doesn't promise specific results but does help you save and negotiate. If having someone else hold your money while you save up to pay down debts sounds like a good plan, you might look into that. You can find legitimate non-profit credit counselors at http://www.nfcc.org/.

We've been very lucky - partly because I am just one of those people who always spends less than their incoming to the extent that it is a family joke of my carefulness even as a small child, and I've never been out of work. When first got married, we suck to a strict budget for the first 3 years or so, but now incomings>> outgoings so have stopped, - we save about 2/3 of my salary & bonuses. Having a middle bracket lifestyle while earning upper bracket income helps, and neither of us is particularly materialistic

Things do start to snowball in a good way too. Dividends are now about 3 months salary, mostly reinvested. Of course, this leads to laziness - I no longer min/max my savings, with most stuff now in "hold and forget" mode. I can't yet retire - but I definitely can choose work that interests me.

Basically, the luxury of having more than enough money isn't the stuff money can buy (my 10 year old car is perfectly functional, so why bother) but the peace of mind it brings.

I looked into one of those a few years back, they wouldn't stop calling about it after I decided not to go with them. I'd get these automated calls on my cell phone throughout the day, very annoying.

wisbechlad - that sounds like the ideal situation. Better to have peace of mind than to be rich. Debt is always such a nagging worry, I can understand the psychological concerns mentioned above. When it gets really bad you feel like the ground is slowing giving way beneath your feet.

Thank goodness, outside of my mortgage, I've never had any debt. Of course I'm a penny pinching miser so...

-I pay for any home improvements out of savings - and only get improvements if their is a threatened loss of utility. If its a big project, like a new bathroom, I'll save up for it for a year - or buy pieces of it over a bunch of months (toilet in August, tile in September, faucets in October) to avoid the one-time hit.
-I drive my car until it seems its hit the repair deathcycle (last car lasted 18 years - and it was still running OK with minimal maintenance at the end). When I do buy, I avoid getting more car than I need (do I really need an SUV when the kids all fit in a Civic - which is much cheaper?), make sure I can pay most of it upfront - or if I do get a loan, pay it off as early as I can to avoid interest payments.
-We prepare most of our own meals ourselves - we eat out very occasionally (and even then its very cheap food like chinese, mexican, or pizza), so our biggest budget hit on food is actually good, fresh produce from the farmers market.
-I don't use my credit car to buy anything unless I have cash in the bank to pay for it, pay every month in full, and then use a credit card that gives 1-2% cashback, and use it for ANYTHING I can. I'm sure my CC company hates me.
-I have a bare-bones cell phone plan, no data plan, and the cheapest, slowest internet I can get away with. No cable either.
-Get most of my books and movies through the library rather than rent/use netflix/etc. My biggest entertainment expenses are probably the few hundred a year I spend on board games and pc games (which are amazing values if you consider hours of entertainment/dollar)

-EDIT - oh yeah, and have given up on spending money on chemical fun (alcoholic drinks, etc). Eating out is so much cheaper when you get soda instead of a few glasses of wine.

I'm sure I could wring more savings out of my life if I wanted (coupons, getting cheaper food-stuffs for cooking, vacation at home more often rather than travel, do more car maintenance myself, etc), but since I have a pretty good buffer in my savings/investments, just don't bother.