9 Ways to Pay Off Debt When You are Living Paycheck to Paycheck

Are you tired of carrying around the weight of debt? Do you live paycheck to paycheck hoping one day you will be able to live the life you want? I have hope for you today. You do not have to live with debt forever. You don’t even have to live paycheck to paycheck forever. You can start your journey of living in freedom with these 9 simple ways to pay off debt when money is really tight.

paying off debt when you are broke

Maybe paying off your debt seems like a dream that will take a lifetime to do. Can I encourage you today? It doesn’t have to. You can start tackling that beast today with these practical tips. I wish I can tell you that if you simply follow this list your debt will vanish. But I can’t. You have to be willing to put in the work. And, you HAVE to get aggressive with your debt. You have to get to the point where it makes you so mad inside that you don’t want to spend another day living with it. Now, it will be there until it is completely paid off, but this is the mindset you need to make it happen faster.

How do i pay off debt with no money and bad credit?

Chances are if you have debt, a big chunk of your paycheck is going toward monthly payments. Things like cars, student loans, and credit cards can take a toll on the income that you bring home. The income that you work hard for.

Or maybe you have become late on your payments and it has messed up your credit.

The thought of trying to get out of debt when there is not a lot left over after the bare minimum payments are made is overwhelming. I completely understand. But let me assure you that it can be done. We did it!!

how do i pay down my debt if i live paycheck to paycheck?

When my husband and I got sick and tired of making minimum payments on our debt, only to see the needle barely move (or not at all because of interest) we took action and worked like never before. We were able to pay off $20K in 18 months. And we did this with one kid in full-time child care and the other in after-school care. Meaning: not a whole lot was left over after childcare expenses were paid.

Now, whether you have debt of $20 or $220K, these money-saving tips are what will massively help you move the needle forward in getting out of debt. And these are the things we did to get out of debt. Can I also let you in on a little secret? Most of these things that I am going to share with you are habits we still do even though we are out of debt (we are still working on paying off our house). These are money practices that most frugal people live by.

1. get on a budget

I can’t talk about paying off debt without first talking about budgeting. A budget is the SINGLE most important weapon you have to slay the debt giant! Let me say that again for those of you in the back of the room…A budget is the SINGLE most important weapon you have to slay the debt giant!

Now don’t run off just yet. I know, I used to hate thinking about a budget too! But please hear me out. A budget tells your money where to go and puts YOU in the driver’s seat, not the other way around. If you are living paycheck to paycheck because your debt has taken over your finances, you are not in the driver’s seat. Let’s get YOU behind the wheel.

Having a written budget in place gives you the power to tell your money where to go. It has an assignment for every dollar and puts up boundaries around your income. Simply put, if you want to spend money you don’t have, your budget will let you know. If what you want to purchase is not in the budget, don’t buy it.

Related Post: 10 Ways to Stop Impulsive Spending

You may be wondering how this relates to paying off debt. Well, your monthly budget will show you where your money is going and how much you are spending in certain categories like eating out, groceries, clothing, and more. You will begin to identify areas where you can cut back on and use that money to pay toward debt, above and beyond your minimum payment.

2. get honest about how much money you owe

Before you can get serious about tackling your debt, you need to know exactly (I’m talking to the penny) how much you owe. You may have been afraid to look, but don’t worry, I am here to help you the whole way! There is NO amount of debt that scares me!

So, what I want you to do is this- write down every single debt you owe and add it up. It may look like Mt. Everest, and that is okay. You need to face it head-on if you are going to get rid of it. Ignoring it will not make it go away.

And the good news is that no matter what you’ve done with money in the past, this is your chance to start all over again. Don’t live in regret! Acknowledge your financial situation and let’s move forward!!

Don’t forget things like doctor bills, unpaid tax bills, or even store credit cards with small balances. Please note that we are NOT including the mortgage balance in this amount.

3. Stop taking on more debt

I am going to ask you to do something really bold. Commit to not taking on any more debt. You may be in a place right now where you are paying your bills with your credit card (I’ve been there too).

You may be thinking, “How else am I supposed to keep the lights on?” If that is you, I want to highly encourage you to look for creative ways to bring in more income but please do not continue to go deeper into debt.

If using your credit card is something that is tempting for you, you may need to cut it up. When my husband and I made the decision that we would never be friends with debt again, we cut up every single credit card we had and closed the accounts altogether.

I encourage you to do the same if having a credit card will squash your progress.

Related Post: 7 Reasons Why People Never Get Out Of Debt

4. take on a side job to have extra income

One thing I know to be true about people who have crushed their debt is that they worked! These days there are a lot of opportunities to find work. Companies like Amazon, Instacart, Shipt, or Uber Eats seem to always be hiring.

One of the best things about some of those places is that you can work your own hours, as many or as little as you want to.

Having some extra income coming in can help ease the burden of debt because you will be able to pay more than just the minimum payment required. If you are past due on your bills this may be your only option to help get caught up if you are living paycheck to paycheck.

I know right now you may be feeling hopeless because of your financial situation. The thought of having to work even more or be away from your family more than you already are may seem overwhelming but this will not be forever! This will not be your reality for the rest of your life.

5. stop eating out

Let’s face it, eating out is a huge pitfall when it comes to trying to work your way out of debt. Yes, it is easier on those busy nights when there seems to be zero time to cook. But, this is a huge area where you will find some extra cash to help pay down your debt.

I am not saying that you can never eat out at all. But what I am saying is that if you are eating out more than once or twice a week and you begin to cut back you can see tremendous savings.

For an average family of 4, a meal at the drive-thru can easily add up to $35. A meal in a restaurant can be upwards of $75-$100. Over time that is a lot of money to tackle the debt with.

If you do eat out, look for some ways to lower your dining bill. Order water instead of soda, or ice tea. The serving size of many restaurants is huge. You could split one meal between two people and easily save money that way.

I remember when a good friend of mine was on her journey to becoming debt-free. She didn’t want to miss out on getting together with friends for dinner. She would actually eat dinner at home before going out.

When she got to the restaurant she was perfectly content with just having something to drink. That takes a lot of discipline, but today she has zero debt and even a paid-off house.

Like I’ve said before, this is not your forever! These are short-term sacrifices for long-term results.

6. create a meal plan to lower your grocery bill

Do you ever go grocery shopping without a plan? Do you stroll up and down the aisles filling up your cart with what looks good, hoping it will work? Not only is that not a good use of your time, it’s also a huge budget buster!

But, we are going to fix that by writing out a weekly meal plan. Meal planning means exactly what the name implies, planning out your meals ahead of time so you know exactly what you need for each day of the week.

The best way to make a meal plan is to get out your calendar or planner and write down meals based on what your week looks like.

For example, if everyone is home on Monday, a simple meal like spaghetti, garlic toast, and salad can be put together quickly. On a busier night, you may want to whip up a grilled cheese sandwich, chips, and fruit.

Continue to list meals for every day of the week. Don’t forget to include breakfast and lunches.

Once you have all your meals written down, create a grocery list based on your meal plan. Remember, we are not going for gourmet here. Choose meals that are simple and budget-friendly.

7. cut out cable television

You may be thinking, “My husband will NEVER go for this”. I know, mine did too. That is until he realized that cutting cable can save a ton of money. Before we cut the cord with cable, we were paying around $150 a month. Just to watch T.V.

We did a little research and decided on Sling T.V. If you are not familiar with Sling, it is internet based streamed television.

The basic plan with no added channels is around $25. We added a few added channels for sports and Hallmark so we pay about $40 for our package. That is a monthly savings of $110. Insane, right?? You do need a smart T.V. and a Roku or FireStick which you can buy on Amazon for around $40.

Another option is YouTube T.V. YouTube T.V. is another internet-based method of watching television. You will still need a Roku or FireStick to watch. This option will cost you around $50. It does have the capability of storing your favorite shows on a cloud so you don’t miss anything when you are not home.

Both Sling and YouTube T.V. allow you to stream shows on your tablet or smartphone. They are a great way to cut your monthly expenses when you are working to get out of debt.

8. stay off of social media

Ahhh, this is a big one! Do you ever notice how perfect everyone’s life is on Facebook? Does Instagram leave you feeling like your life is boring? I hear ya!!

Let me just tell you, not everything you see on social media is real. Most of the time it is a highlight reel of someone else’s experience. What we often do is compare our life to what we see on social media.

When all you see if someone’s perfect vacation, new car, or remodeled bathroom it is easy to think that we don’t measure up. This can land us right in the comparison trap. We begin to want what they have or do all the fun things they do.

So what do we do, we go out and plan vacations we can’t afford, or buy things we can’t pay cash for. This causes our mountain of debt to grow bigger and bigger.

If you find that scrolling through social media is causing you to be discontent with your own life, stay off of it for a little while. It is perfectly okay and your budget will be better for it.

9. sell things to make quick cash

If you are in an absolute bind and need cash right away, look for things in your home or garage to sell. Do you need 3 cars? Do you have a closet full of clothes that no longer fit? How about all the clothes your kids have outgrown?

We all have things that we have not used in a long time and these items can be turned into cash.

Consider having a garage sale or selling items on consignment. Facebook Marketplace or Verage are great ways to list items for sale to make money.

Going through your closets is a great way to make some quick cash and do some decluttering as well. Make sure that what you are planning on selling is in good condition. If not, trash it.

Phew, we made it.

Whether you do one or all of these things that I highly recommend, make sure you do them consistently. Consistently is so important when it comes to getting out of debt. You can do this, I promise. I believe in you!

Drop a comment below and let me know what you have been doing, or plan to do to pay off your debt.

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