How to find extra money each month to pay off debt

The debt snowball has one honest requirement: something to throw at it. The method — smallest balance first, minimum payments on everything else — is just a way of directing money. If there's no extra money, there's nothing to direct.

The good news is that "extra" doesn't have to mean much. On a typical mix of credit cards and loans, an additional £25–£50 a month can pull your debt-free date forward by months and quietly cut the total interest you'll ever pay, because every extra pound goes straight at the balance rather than being eaten by interest first. (We'll use £ throughout, but every idea here works exactly the same in dollars, euros, or any other currency.)

This guide is about finding that £25–£50 — or more — in a way you can actually keep up. If you haven't set up your payoff order yet, start with how to make a debt payoff plan and come back; this article is about feeding that plan.

Start with a one-month spending audit

Before you cut anything, find out where the money actually goes. Not where you think it goes — the two are rarely the same, and the gap is usually where the spare money is hiding.

Open your bank and credit card statements for the last full month (banking apps make this a ten-minute job) and put every transaction into one of three buckets:

Total each bucket. Most people find at least one number that surprises them, and that surprise is your starting point. Don't judge past spending — the audit is for information, not penance.

Fixed bills: one phone call, savings every month

Fixed bills are the best place to start because the effort-to-reward ratio is unbeatable. You make one call or fill in one comparison form, and the saving repeats every month without you having to think about it or resist anything.

Work through your fixed costs and ask two questions of each: am I paying the going rate? and am I paying for a tier I don't use?

• Insurance (car, home, contents, pet): loyalty is usually punished. Get comparison quotes before each renewal, then either switch or use the quote to negotiate with your current insurer. Check you're not paying for add-ons you'd never claim on.
• Phone: if you're past your contract's minimum term, you're likely overpaying. A SIM-only deal on the same network often costs a fraction of a bundled contract, and you keep your number.
• Broadband and TV: out-of-contract prices creep up. Call, say you're thinking of leaving, and ask what they can do — retention teams have deals that aren't advertised. Also ask yourself whether you use the speed or channel tier you're paying for.
• Energy: where your market allows switching, compare tariffs once a year. Where it doesn't, check you're on the cheapest tariff your supplier offers and that your bills are based on actual meter readings, not estimates.
• Bank charges: packaged accounts with monthly fees are only worth it if you use the perks. If you don't, a free account does the same job.

Even a modest result here — say £15 off insurance and £12 off your phone — is £27 a month of permanent snowball fuel that cost you an afternoon.

Subscriptions and small leaks

Go through your direct debits, standing orders, and recurring card payments — and don't forget app-store subscriptions, which live in your phone's account settings rather than your bank statement. List everything that charges you automatically.

For each one, the test isn't "do I use this?" — it's "would I sign up for this today, at this price?" If the answer is no or a hesitant maybe, cancel it. Here's the trick that removes the fear: if you genuinely miss it, re-subscribe. Almost every subscription will happily take you back in thirty seconds, and some will offer a returning-customer discount for your trouble. Cancelling is not a permanent decision, so you don't need to agonise over it.

While you're in there, look for duplicates (two music services, three streaming platforms rotating the same evenings), forgotten free trials, and memberships for things you stopped doing. A handful of £5–£12 leaks adds up to real money.

Variable spending: trim, don't starve

Variable spending is where most budget advice goes wrong, so let's be clear: the goal is a plan you can run for the whole payoff, not a heroic month. Slash your food and fun budget to the bone and one of two things happens — you white-knuckle it for six or eight weeks and then rebound hard, or you abandon the plan entirely and conclude that budgeting "doesn't work for you." Neither pays off any debt. A sustainable £40 a month beats an abandoned £150 every time — which is the same logic that makes the snowball itself work: momentum you can keep matters more than optimisation you can't.

So trim with a light hand:

• Groceries: plan meals around what's on offer and what's already in the cupboard, write a list, and shop once rather than topping up mid-week (top-up trips are where impulse buys live). Drop one brand tier on staples — most people can't tell the difference on rice, tinned tomatoes, or cleaning products, and the savings compound weekly.
• Eating out and takeaways: don't eliminate it; ration it. If the audit showed six takeaways last month, make it three and put the difference on the debt. You'll barely feel three; you'd definitely feel zero.
• Everything else: give yourself a small, explicit "fun money" amount each month and spend it guilt-free. Paradoxically, permission to spend a little is what makes the rest of the plan hold.

The income side

Cutting costs has a floor; earning has more headroom. You don't need a permanent second job — even a temporary boost, aimed entirely at one balance, can wipe out a small debt and get your snowball rolling. Some options, roughly in order of effort:

• Check your tax is right. An incorrect tax code or over-withholding means you're quietly lending your own money to the tax office. Most tax authorities let you check and correct this online, and a fix can mean an immediate bump in take-home pay or a refund.
• Sell what you're not using. Old phones, games consoles, tools, furniture, kids' equipment, that exercise bike. It's a one-off rather than monthly income, but a £200 lump sum aimed at your smallest debt can be worth more psychologically than months of trimming.
• Overtime or extra shifts, if your job offers them — with a defined end date so it doesn't become your life.
• A temporary side income: tutoring, delivery work, freelancing a skill you already have, seasonal work. Frame it as a project with a finish line ("this pays off the store card"), not a forever commitment.

Windfalls and pay rises: decide before the money arrives

Here's where months get knocked off payoff dates. Bonuses, tax refunds, cash gifts, and pay rises tend to evaporate into slightly nicer everything unless you've decided in advance what happens to them. So make the rule now, while there's no money on the table: a fixed share of any windfall or rise — half is a good default — goes to the debt before anything else. You still get the other half to enjoy, so the rise still feels like a rise, but lifestyle inflation never gets the chance to absorb all of it.

This is also where seeing the numbers helps enormously. The free payoff planner can model exactly this: add a future pay rise or a one-off lump sum and it recalculates your debt-free date on the spot. Watching a £500 bonus move the date forward by two months turns an abstract good intention into a concrete, motivating trade-off.

Where to focus first: biggest wins, not smallest pleasures

You've probably noticed what's missing from this guide: any suggestion that your coffee is the problem. That's deliberate. Small pleasures are cheap; big fixed costs are expensive. If you have limited time and energy — and everyone does — spend them where the money is:

• Housing and transport costs (the giants — even small percentage changes are big money)
• Insurance renewals and out-of-contract phone/broadband deals
• Tax code and withholding check
• Subscription and direct-debit cull
• Grocery habits: meal plan, list, brand-drop
• A pre-commitment rule for windfalls and rises
• Eating out: ration, don't ban

Fixing one bill can save more than a year of coffee abstinence, and it requires willpower exactly once. Start at the top of the list and work down until you've found your number.

Put the number to work

Once you know your extra amount — £30, £75, whatever it honestly is — two things remain. First, if you have no savings buffer at all, read how to build an emergency fund while paying off debt, because a small cash cushion is what stops a burst tyre from going straight back on the credit card. Second, put your number into the planner, see your new debt-free date, and let that date do the motivating. You'll find more on staying the course in our other guides.

The money is almost certainly there. It's just currently going somewhere you didn't consciously choose. One audit, a few phone calls, and one rule for windfalls — that's usually all it takes to find it.

Sources and further reading

The explanations in this guide are based on published guidance from regulators, government-backed money services and established references:

• Free budget planner — MoneyHelper (UK, government-backed)
• Making a plan to pay your debts — Citizens Advice (UK)
• How to save for emergencies and the future — Consumer Financial Protection Bureau (US)