It’s all about priorities when deciding what to cut or keep while getting rid of debt.

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Nearly every article I’ve read about cutting expenses always grinds my favorite luxury right into the chopping block: Coffee shop coffee. Here’s the thing, though. I don’t want to brew my own coffee.

That means I spend around $140 a month on perfect coffee, twice as much as I’d spend preparing my own disappointing brew. It’s important to me to enjoy my morning coffee, so even on a tight budget, I keep that luxury and cut back on other things.

If you’re trying to pay off debt, it’s tempting to remove every costly pleasure from your life. Don’t do that, though. There’s a middle ground, and it’s based on choosing priorities.

Here are five questions to ask yourself when deciding what stays or goes when putting together a budget to pay off debt…

1. How important is this indulgence?

Since I work at home, I get cabin fever if I don’t go somewhere else to write at least a few times a week. Writing at a coffee shop or taking my coffee to the library to work gives me stimulation in a new environment.

I still buy the pricey coffee shop coffee even when I’m working at home, though. It’s one extravagance I’ve held onto through good times and bad, even when cutting every other corner.

2. What benefit do I receive from this luxury?

Maybe you like to get your hair and nails done regularly, purchase new music or enjoy a monthly massage. Or, you love going to concerts or professional sporting events with your friends. If something boosts your happiness, social life or well-being, try to keep it and find a way to cut the budget elsewhere.

Eliminate your cable service to free up money for a monthly massage. Take your lunch to work to save cash for tickets and concessions at the occasional ballgame.

3. What can I cut that I wouldn’t miss much?

I got rid of cable three years ago, bought a TV antenna and never picked up a complicated remote again. I still receive 25 network stations, and my $11 monthly Netflix subscription offers plenty of entertainment.

When paying off debt, you’ll have to resist spending on a few indulgences, so you can afford to keep one or two. For example, if you’re paying someone to mow your lawn or clean your house, you could do the job yourself and use that money for an occasional movie or dinner out.

4. Can I create a compromise?

Even though I like my coffee out, I usually brew my own on weekends to offset the expense. Sometimes, I don’t get a refill. How can you tweak your favorite splurge? If you’re spending money dining out and want to start cooking meals at home, you can still allow yourself to go out a few times a month, so you don’t feel deprived.

You can always find nightly restaurant specials and coupons that allow you to dine out on the cheap.

5. How will my sacrifice pay off?

Cutting cable and cooking meals at home saves me at least a few hundred dollars a month, between  $2,000 to $3,000 a year. That’s money I can use to pay off debt, save or spend on a vacation or home renovation.

Think about how much you’d be able to pay toward debt or stash in emergency savings if you only went out to eat a few times a month or drove your older car for one more year. Come up with a compromise that works for you.

Keeping a couple of unnecessary expenditures helps you stay motivated to pay off debt. That’s because feeling poor all the time can make you want to just give up and return to your old ways.

Instead, envision the positive outcome you’ll gain from temporary sacrifices such as how much lighter you’ll feel when your credit card has a zero balance.

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About the Author

Deb Hipp

Deb Hipp

Deb Hipp is a full-time freelance writer based in Kansas City, Mo. Deb went from being unable to get approved for a credit card or loan 20 years ago to having excellent credit today and becoming a homeowner. Deb learned her lessons about money the hard way. Now she wants to share them to help you pay down debt, fix your credit and quit being broke all the time. Deb's personal finance and credit articles have been published at Credit Karma and The Huffington Post.

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