How do I create a budget that prioritises debt repayment?

A debt-prioritization budget is simple: List all income, list all essential expenses, then put EVERYTHING remaining toward debt.

The Zero-Based Budget Method

Step 1: List all income

• Salary
• Side hustle earnings
• Any other money coming in

Step 2: List essential expenses (only what you truly need to survive)

• Rent/mortgage
• Utilities (electricity, water)
• Food (basic groceries, not restaurants)
• Transport to work
• Minimum debt payments
• Essential medicine

Step 3: Everything else goes to debt

• No eating out
• No new clothes
• No entertainment subscriptions
• No "treat yourself"

The 50/30/20 Rule (Adjusted for Debt)

A standard budget might be:

• 50% needs (rent, food, utilities)
• 30% wants (entertainment, dining out)
• 20% savings

When you are in debt, adjust to:

• 50% needs
• 10% wants (bare minimum)
• 40% debt repayment

Every percentage point you shift from "wants" to "debt" gets you out of debt faster.

Real Example

Income: ₦300,000 per month

Essential expenses: ₦150,000

• Rent: ₦80,000
• Food: ₦40,000
• Transport: ₦20,000
• Utilities: ₦10,000

Minimum debt payments: ₦50,000

Remaining: ₦100,000

Option A (standard living): Spend ₦100,000 on wants → 10+ months to pay off ₦500,000 debt

Option B (intense debt focus): Spend ₦20,000 on wants, put ₦80,000 extra on debt → 4 months to pay off ₦500,000 debt

Step-by-Step Action

Step 1: Track every expense for one month. Write down every single purchase.

Step 2: Categorize each expense: "Essential" vs. "Optional."

Step 3: Eliminate all optional expenses.

Step 4: Calculate how much money you now have for debt repayment.

Step 5: Apply the debt avalanche method (Question 11) to allocate this money.

Step 6: Review your budget every week. Adjust as needed.

Step 7: Celebrate small wins. Paying off a loan is a reason to be proud, not to spend money.