Current universal quantum computers have a limited number of noisy qubits. Because of this, it is difficult to use them to solve large-scale complex optimization problems. In this paper we tackle this issue by proposing a quantum optimization scheme where discrete classical variables are encoded in non-orthogonal states of the quantum system. We develop the case of non-orthogonal qubit states, with individual qubits on the quantum computer handling more than one bit classical variable. Combining this idea with Variational Quantum Eigensolvers (VQE) and quantum state tomography, we show that it is possible to significantly reduce the number of qubits required by quantum hardware to solve complex optimization problems. We benchmark our algorithm by successfully optimizing a polynomial of degree 8 and 15 variables using only 15 qubits. Our proposal opens the path towards solving real-life useful optimization problems in today’s limited quantum hardware.