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How to Pay Off Debt When Living Paycheck to Paycheck [in 2023]

Do you want to know how to pay off debt when living paycheck to paycheck?

Learning how to pay off debt when living paycheck to paycheck may seem like it’s an impossible feat. If you are living on a low income, how are you supposed to find extra money to put towards your debt each month?

According to the United States Census Bureau, the median household income of Americans was $61,937 as of 2018.*  (Fill out the 2020 Census here). 

With 59% of Americans living paycheck to paycheck according to Charles Scwab’s 2019 Modern Wealth Index Survey; a shocking only 38% have the funds to cover an emergency. And at least 44% of Americans are living with credit card debt.*

If you are one of the millions of Americans living with debt and struggling to make ends meet each month, then you know how hard it is to climb your way out of that black hole. It is especially hard to know how to pay off debt when living paycheck to paycheck.

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    Table of Contents  show 

    Debt payoff worksheets and tools to succeed

    Here are a few tools to help you begin your debt free journey:

    I recommend starting a budget binder, (this one has 84 pages!)

    To track all of your debts in one place using an online tool, Undebt.it is our recommended choice.

    Check out the pro version (only $12 a year) using their 30 day free trial. No credit card is needed to sign up and it will automatically expire unless you decide you want the pro version after your 30 days is over.

    Why should you pay off debt?

    Paying off debt can help you lower your monthly bills, and put more money in your pocket. You will have more money to save and invest in your future when you become debt-free.

    These are just a few of the pros having no bills anymore –

    You can save for a big ticket item (house, car, boat, RV, etc.), and pay for it in full

    You can save money for your children’s education

    You can invest your money in stocks, real estate, or a retirement fund

    You can teach your children good money habits

    You can improve your credit score, and get better interest rates on mortgages, etc.

    You will physically have less stress and be happier, because you won’t have to worry about money

    You can retire early

    You can take that cross country road trip or European backpacking tour you’ve always dreamed of.

    What debt should be paid off first?

    Financial expert, Dave Ramsey, recommends you choose one of two ways to pay off your debt:

    Using the Debt Avalanche vs. Debt Snowball to pay off your debt: Which is better?

    To pay off your debt using the debt avalanche, you would pay off the debts with the highest interest rate first. By choosing to pay off the accounts with highest interest rate, you will save more money in the long run.

    To pay off your debt using the debt snowball, you would pay off the debts in order of how small they are. 

    You would choose the smallest debt you have and pay off that account balance first. Then the next smallest debt, and so forth. 

    While you do not save money on interest by this method, Dave says that you will be able to stay more motivated using this route because you are able to celebrate small victories more quickly keeping you on track with your goals.

    During my debt free journey, I thought it was important to get a few small wins out of the way by paying off some of my smallest balances. (Under $500 account balances). 

    This saved us a small amount of our monthly budget and helped us feel like we were “winning with money.”

    Then I switched to paying off more destructive debt, such as my credit cards with interest rates higher than 15%, my student loans, and my car loan. It may also be good to pay off any payday loans or rent-to-own payments at the start of your journey because these payments can cause more problems because of their highest interest rates.

    I recommend that you chose one of the above methods depending on your personality. 

    Do you need to see progress to stay motivated? Or are you the type of person that can wait a little bit longer to save more money by using the other method?

    Debt Avalanche vs. Debt Snowball

    Is it better to pay off debt or save money?

    It’s important to save money for an emergency fund before you start paying off your debt. By saving at least a minimum of $1,000 in a savings account that you will not touch, you can help cover unexpected expenses that will inevitably pop up on your debt free journey.

    Those who don’t take the time to put aside money for their emergency fund will most likely regret it because once something happens that requires a large sum of money (car repair, A/C repair, etc.)., if you don’t have money saved specifically for these costs, you will most likely use a credit card. 

    This means you will undo some of the progress you have worked so hard on.

    How long will it take to get out of debt on a low income?

    It typically takes anywhere from 18 months to 36 months to pay off the average amount of debt. The amount of effort you put in can make that number smaller or longer. It also depends on your credit card balances and if you have an auto loan.

    Living in a paycheck-to-paycheck cycle with a low monthly income might make it seem impossible but by reading this you are taking the first step to improve your financial situation.

    It’s all up to you and how hard you work at your goals.

    Ok, let’s get started on the important points.

    How to pay off debt when you’re living paycheck to paycheck

    Change your mindset

    For many people (I’m looking at you, spenders!), they may feel that after working long, hard 40 hour work weeks that they are entitled to buy whatever they want. They think that since they put in the work for their money, they have the right to spend it.

    But if you have debt, then you don’t. If you have debt, then you are broke. 

    Buying that $300 watch on a credit card will just make you more broke.

    And even if you have the cash to pay for it, doesn’t mean that you should. If you have the $300 to pay for that watch, but have thousands of dollars in debt, then the $300 should be going towards paying off that debt instead.

    It’s so important to change your mindset as you begin this journey because it can be a hard thing to accept. It doesn’t matter if you make $35,000 a year or $120,000.

    If you are sitting on piles of debt, you are broke; and you need to pay off your debt, not create more.

    Changing your mindset is one of the most important aspects of how to get out of debt on a low income.

    Related posts: 90 Brilliant Financial Freedom Quotes to Take Charge of Your Money

    81 Motivational Mindset Quotes for Success

    So, let’s begin.

    Create a list of all your debts

    By using a free money-saving app such as Undebt.it, you can write out all of your debts in one place to track how much your account balances are, what the interest rates are, and how much you are paying each month towards them.

    They also have a pro version for only $12 a year, and you can get a 30 day free trial to see if you want the upgraded version. No credit card is needed to sign up and it will automatically expire unless you decide you want the pro version after your 30 days is over.

    If you prefer using pencil and paper, we have a great debt tracker you can use here.

    By making a list of all of your debts, you have everything laid out in front of you to see which order you would like to pay them off in, and to get an idea of how long it will take to pay everything off.

    Make sure you list: creditor’s name, balance, minimum monthly payment, interest rate, and due date for each account.

    I recommend listing them in the order of the debt payoff method plan you are using. As you pay off one account, you should take what you were paying on the previous balance and roll it into the next account you are paying off.

    For example, say two of the cards you are paying off have payments of $30 and $50. You pay off the card that you were paying $30 on, so you should start putting that $30 towards the $50 card so that you would be paying $80 instead of $50. 

    This is called a debt snowball and will help you pay off your debt much faster.

    Keep track of your credit score

    You should also check out your credit score and credit report to identify all your debts and to check for accuracy. This will make sure you are not forgetting any accounts, as well as to make sure you do not have any items in collections.

    Credit Sesame offers a free credit score and credit report, and I have been using it for over 5 years to monitor my credit.

    Make a budget and track your spending

    Now that you have your debts laid out to see what needs to be done, you also want to make sure you are tracking your spending by creating a budget.

    You can find some free budget printables to help you track your everyday expenses.

    PRO TIP: Add a section for sinking funds for holidays & birthdays in your budget so that you’re not scrambling to find cash to fund them at the last minute, which can cause you to use credit cards and destroy your progress.

    Save money for an emergency fund

    Photo by Karolina Grabowska from Pexels

    Save money for an emergency savings fund

    This step is very important. You should try to save at least $1,000 in an emergency savings fund to cover unexpected expenses. 

    These will come up from time to time, and if you don’t have this savings to cover them, you will end up ruining all of your progress on your debt by using your credit cards or taking out loans instead.

    I recommend saving at least $1,000 in your emergency fund, but you may want to save more. When you are done paying off your debt, you should increase your emergency fund to 6 months worth of monthly expenses.

    You may want to use a separate savings account for this money that isn’t connected to your checking account. This way you don’t spend the money if things get tight.

    Tackle one debt at a time

    I explained the two main ways to pay off debt above. By using the debt snowball or debt avalanche, you are managing one debt at a time and making progress faster.

    Instead of paying $15 more each month on every card, you should continue to pay the minimum payments on all of them except the current debt you are paying off. 

    Then on the current debt you are working on, you would pay as much as you can towards it.

    Pay more than the minimum

    If you want to pay off your debt fast you need to pay more than the minimum on the debt you are currently working on. It will speed up the process, and you will owe less money in interest.

    When you pay the minimum payment only, most of that payment goes towards the interest, and only a small amount actually reduces your debt.

    Even if you are on a tight budget, I recommend paying an extra $15, $50, $75, whatever you can afford to pay. I usually like to pay all of our bills, keeping on track with our budget, and then anything extra we have left over goes toward that account that we’re currently working on.

    When you have a budget laid out and have included extra money for clothing, entertainment, eating out, etc., then you can manage exactly how much you are willing to spend on those, and take the remainder of your check and put it towards your debt without worrying you may want to order a pizza one night if you forgot to defrost your chicken.

    Stop trying to keep up with the Jones’

    It can be hard to stay on a budget when your social media is full of friends and family members taking lavish vacations, driving new cars, and wearing the latest fashion trends.

    But remember, most Americans are living in debt, which means many are paying for these trips and items with credit cards.

    Why go into debt to try to impress others? Think of all the things you will be able to buy for your family when you are debt free!

    When you have virtually no bills but utilities and food, you will be able to save up for that expensive trip and pay for it in cash!

    And the best part of it is instead of feeling guilty for putting the expense on a credit card, you will be able to pay for it in full in cash. How’s that for a self-confidence boost?!

    Decrease your spending

    This brings me to my next tip. Stop shopping! Stop spending money on anything but the necessities and bills.

    By not shopping, you will be able to put more money towards your debt each month instead, and pay it off much quicker.

    Because we lived on one small income for so long before I started working different side hustles for moms, we had to dramatically cut our spending. Before I left my full-time job, I would constantly spend money on the latest fashion and we would go out to eat frequently.

    But after having a baby and making the decision to stay at home, we had to adjust our spending to reflect our new (much smaller) income.

    Due to already living on a small income because of this decision, I was already accustomed to not spending money when we started paying off our debt. 

    I rarely buy clothing for myself (I usually get my sister’s secondhand clothes, shop at secondhand clothing stores, or go without buying anything new).

    I usually will buy a new shirt or two when we get our tax refund. (Yes, once a year! My fashion has paid the cost of this unfortunate but ultimately wise decision.)

    Living this way had become automatic for our family; we were used to not spending money on anything but the necessities (bills, utilities, food, shelter).

    Any extra money we get goes towards our debt instead of ourselves. It can be hard at time when you see influencers all over Instagram wearing the hottest new Steve Madden travel sandals, and all you want to do is be able to drop $80 for your own pair.

    The only time we spend any money on ourselves is when we allocate a small amount of our tax refund to spend on ourselves. And occasionally throughout the rest of the year we will purchase small items and gifts for our kids.

    After awhile of not shopping constantly, you will realize how much money you have been wasting and how much more fast you can pay off your debt when that money is being used wisely.

    Related post:  100+ Things to do on a No-Spend Weekend

    pay off debt fast using these tools

    Photo by Joslyn Pickens from Pexels

    Save more money with cash back apps

    If you are living on a low income, then not spending may already be part of your life. You may be struggling to find any extra money to put towards your debt each month. 

    It may seem like paying it off will take years if you can only afford to put $15 extra each month because you live paycheck-to-paycheck.

    This is why we are going to go over a few different things you can do to help in this situation. The first is to save more money.

    By using cash back apps such as Rakuten, when you do any online shopping, you will be able to get a percentage of cash back from your purchases.

    This means if you are doing your Christmas shopping, purchasing a birthday gift for your child, or paying for a new household item, that you can earn quite a bit back because of the higher cost of these items.

    This really comes in handy in our family because we have 13 nieces and nephews that need birthday gifts throughout the year! (I do all of my shopping online using Rakuten).

    But you can also earn cash back for everyday smaller items. I have been using Rakuten (formerly Ebates) for over 3 years, and every 3 months receive a cash back check from them deposited into my Paypal account.

    Sometimes it’s small, (because we don’t spend a lot of money and use it mostly for gifts or unexpected household costs), but sometimes it can be quite a bit. You can even use it to earn cash back for things like a Disney + subscription.

    Related post about Rakuten: Save Money on Disney Plus +

    Get $20 for free by getting started with Rakuten.

    Rakuten isn’t the only way to save more money.

    We also use Ibotta to get cash back from our grocery shopping. You browse offers in the Ibotta app before you shop, and then earn cash back on your purchases from over 300 stores, including Target, Publix, Walmart, Lowe’s, and many more.

    It’s really easy, you just submit a photo of your receipt after you are done shopping and then you will earn cash back from any eligible purchases. It also works for online purchases, as well. You are basically throwing away free money by not using Ibotta.

    Sign up for Ibotta to earn cash back on your purchases.

    One of the best ways I started saving money was by using Walmart grocery pick up

    It’s so easy: I create my shopping list online, then drive to Walmart to pick up my groceries. I park in the designated spot, and a Walmart associate brings out my groceries and puts them in my trunk.

    It saves the extra costs of using a service like Instacart to have groceries delivered to my home (because it is free!), but is still much safer than shopping in the store in these strange times. But the best part is that I save money.

    I have a tendency of going into Publix, Trader Joe’s, or Walmart with my list of 15-20 items, and coming out with 30 items. 

    It’s so much easier to stick to your list (and your budget!!) when you aren’t in the store seeing all of the extra items that look too good to turn down. 

    (This is especially true if you are shopping when you are hungry!)

    Sign up for Walmart grocery pickup and get $10 off your first $50 order. (It’s free to use!)

    Get rid of subscriptions

    Another way to save more money each money is to go through your monthly bills and get rid of subscriptions and memberships that are not being used. As much as I wanted to be the gym rat I used to be in my 20’s, I no longer am as a parent and that $30/month membership was going unused.

    We cut cable and switched to streaming services, which saved quite a bit of money each month as well. Some of the subscriptions can be offered for free or at a discount through your internet or mobile provider.

    Some of the streaming services that are great to use in place of cable are:


    Disney + (Grab the bundle that includes Disney +, Hulu, and ESPN for the best price).

    Hulu Live

    Netflix (We get this for free through our phone provider, T-Mobile.)


    HBOMax (We get this for free through our internet provider, AT&T! Check to see if your internet provider offers it).

    Apple + (You may be eligible for a free year of Apple + if you buy an eligible Apple device).

    This step is so important because the money you save from making some small changes to your monthly bills can go towards paying off your debt much quicker. We were able to save hundreds of dollars by cutting many of these things from our budget.

    If you are trying to find out how to get out of debt on a low income, then cutting unimportant costs like these are very important.

    Related post about saving money: 25 Things I Stopped Buying to Save Hundreds Every Month

    Negotiate lower bills and interest rates

    Did you know that you can call the companies you have accounts with and negotiate lower bills and interest rates with them? This is a great way to save more money each month so that you are able to put more of that income towards debt instead.

    But if you are anything like me, then the awkwardness of that making those phone calls may hinder you from saving money. Luckily for introverts like myself, there is Billshark.

    Billshark is a program that can help you negotiate your bills to lower them so that you can save more money each month. They help you make sure you are getting the best possible rates on your cable, internet, phone, insurance, & medical bills so you spend less, and save more.

    They can also help you find and cancel any unwanted subscriptions. Although Billshark is a paid service, they will only charge you if they are able to save you money. Let them take all the hassle out of finding better rates on your bills by letting them do it for you. With a 4.5 rating on Trustpilot, you can’t go wrong.  Sign up for Billshark here.

    Sell everything

    If you really want to pay off debt quickly, and are living paycheck-to-paycheck, then saving more money each month will absolutely help you.

    But another way to really speed up your debt-free journey is to sell unused items. Sell. Everything.

    If you are like the average American, then you probably have clothes, books, toys, movies, etc. that are going unused in some corner of your house just taking up space.

    What’s that saying?  One man’s trash is another man’s treasure.

    Sell everything. And when you think you can’t find anything left to sell, find some more things to sell.

    I recommend going through all of your things and having a yard sale. Then you can take that money you earn and pay off more debt.

    But yard sales aren’t the only way to sell your things anymore.

    It’s 2020. There’s tons of places where you can sell your stuff.

    First let’s go over safety, because it’s very important to remember to stay vigilant when meeting someone in person to sell an item. If you are meeting someone you don’t know to sell an item, make sure to arrange to meet in a public place, bring someone along with you, and let a friend know where you are heading before you leave.

    Here are a few of the places where you can unload your items and get cash:

    Yard sale

    Facebook marketplace





    Thred up

    Craig’s List

    Gazelle (sell old phones and devices)

    Plato’s Closet

    Once Upon a Child

    When you are done selling everything, you can take that money and put it towards the debt you are currently working on. I usually will go through our things twice a year to see what I can sell. Then whatever doesn’t get sold, I donate.

    Increase your income

    The best way to pay off debt fast is to increase your income. This is especially important if you are living on one income or living on a small income. It can be extremely difficult to make any traction in your debt-free journey when money is tight every month.

    This is why I absolutely recommend creating more income – whether through a second job, a side hustle, or by working from home. You may want to work overtime or ask for a raise to increase your income.

    There are many great places to work that offer flexible schedules that will fit around a full-time job or that can help a parent that may be staying at home with the kids.

    Some of our favorite side hustles to earn extra cash are:

    (All of these above are flexible and perfect for stay-at-home parents).

    Related post: 40 Proven Ways to Make an Extra $1000 a Month

    If you aren’t interested in adding another job or don’t have the time to, you can also earn a little bit of extra cash by taking surveys online. It will not be the quickest way to earn extra income, nor will it generate a substantial amount of money, but you can make a little bit in your spare time.

    There are many surveys available out there, but these two are rated the best and most trustworthy by Trustpilot.

    • Survey Junkie – One of the highest rated survey sites.
    • Swagbucks – Get a $5 bonus to start through our link.

    Both companies will pay you directly by Paypal.

    Cut up your credit cards and close your accounts

    This step is a vital part of the process. You may not want to close your accounts after you have paid them off because of your credit score. But let me explain why it is so important:

    We lived on one income for awhile before I started working from home.  Every year, we would pay off most or all of our credit cards with our tax refund in March.

    Then as the holidays and birthdays would start to approach, and we’d have no extra money to pay for presents or activities for our kids, we’d start to use one credit card again.

    We’d tell ourselves it’s just one, we’ll pay it back off. But we only would be paying the minimum monthly payments.

    Then all of a sudden, Christmas would be over, and most of our cards would be maxed out once again.

    Does this scenario sound familiar? Sure, we cut up our credit cards after paying off our debt in the spring.

    But do you know how easy it is to go to your online account and reorder the card?

    My husband didn’t want us to close our accounts because the more credit you show, the better your credit score.  But at what cost?  It was too easy for us to mess up again.

    We finally read The Total Money Makeover by Dave Ramsey, (this book is life-changing!), and started making smarter choices.

    I started working from home, which created more income. And we started to close our accounts after we paid them off. 

    We kept one card open for each of us to show a history of credit, but every other account was closed so we wouldn’t be tempted to use them once again.

    Make a budget and stick to it. Cut up your cards. Close your accounts.  Set yourself up for success instead of failure.  Because when you are living on a low income, it’s so easy to backslide and rely on credit as the answer.

    Read more about Dave Ramsey’s baby steps.

    Put unexpected income towards debt

    Ok, so you are saving more money each month by negotiating lower bills and getting rid of unwanted expenses. You are selling items and putting that money towards debt. 

    You are increasing your income through side hustles. You are making a budget and tracking your money.

    What else can you do to really speed up the process?

    Put any extra income towards your debt.

    You know, the bonus you get from your boss at work, your tax refund, that $50 check your Grandma sends you for your birthday.

    All of it. 

    Any extra money you get throughout the year should go towards your debt.

    This may seem unfair.

    You may think, “Well, it’s extra money and I want to spend it on myself. I earned it, I have the right.”  And yes, while that may be true, it won’t help you pay off your debt any faster.

    And you want to pay off your debt as fast as you can. Because that’s the only way you will have absolute freedom.

    Yes, the freedom to spend the money you earn on whatever you want. And to not feel guilty about your purchases after because of the looming debt hanging out in the background.

    Put it all towards your debt. 

    My husband hates it when our tax refunds show up. Because he knows within a matter of days that the high number shown in our account will disappear. 

    (Most marriages have a saver and a spender – he’s definitely the spender, I’m clearly the saver.)

    Make sure household is on board with the debt payoff plan

    As I just said, most marriages have a spender and a saver. One will want to splurge when you get extra cash, while the other may want to save it. 

    This can lead to many disagreements and frustration. It is also the second leading cause of divorce after infidelity, according to this survey.

    It’s so important to sit down with your spouse and create a budget together that works for you both.

    It’s also extremely important for both of you to be on board with paying off debt. 

    If one person doesn’t really care about paying off debt, and just wants to keep spending whenever he/she gets more money, they will ultimately ruin any chances of you have of becoming debt free.

    If you have a significant other who is not on board with paying off debt, maybe have them read Dave Ramsey’s book The Total Money Makeover, (it’s life-changing!), or take Financial Peace University together.

    Engage with like-minded people

    It can be pretty discouraging to be in the process of paying off debt and living a frugal lifestyle, but scrolling through Instagram and seeing your friends and family wearing the latest fashion and buying brand new cars.

    It can be pretty irritating to have those family and friends constantly asking you to hang out by going out to restaurants or bars, and spending money that you do not have in your budget.

    When we started paying off debt, my family kept wondering why we all of a sudden couldn’t afford to go join them for drinks and a movie.

    We told them we couldn’t afford to, but they just wrongly assumed that we were not managing our money properly and then gave us a lecture about money.

    But, when you choose to pay off debt and live a frugal lifestyle, just because you say you can’t afford something, doesn’t mean you physically have no money to do it.

    It means you are choosing to be wise with your money.

    It can be hard to stay on track when you are always with others who are keeping up with the Jones’. Try to find like-minded people who are also paying off debt, or who don’t live lavish lifestyles.

    You can find a great finance and debt free community on Instagram and Twitter, as well as many blogs like ours. Get involved with them and you will find daily motivation to not only stay on track, but also feel encouraged and motivated during the process.

    Because paying off debt can take awhile, depending on how fast you pay it off and how much debt you have acquired. It’s important to keep a positive mindset about it.

    Shop the sales

    If you absolutely must shop for a present or an outfit for work, etc., then shop the sales. Many stores offer clearance sales and discounts.

    I recently found Fergie boots that are usually $69.99 that were on sale for $27.99. I would have never paid that higher price, but since I have been looking for khaki boots for over a year now, I grabbed these while they were on sale.

    I highly recommend using Rakuten for all of your shopping. I have been using it for years. It has a score of 4.3 on Trustpilot, and over 12,000 reviews.

    It can be used to do online shopping: Rakuten will find you any available promo codes, as well as give you cash back on any eligible purchase. 

    You can also find something you like, then get a code to scan and show it at the store to get the cash back.  Get $20 to sign up with Rakuten here.

    Skip the luxury vacations

    If you like to take annual vacations with your family or friends, this should be one of the first things you cut to pay off debt.

    By eliminating a trip that can cost anywhere from hundreds to thousands of dollars, you can allocate those funds to pay off a substantial amount of debt.

    Maybe you take an annual weekend trip with your girlfriends, or take the kids to the mountains every year for a week. Maybe you are planning to go on that first cruise or Disney Land trip.

    If your ultimate goal is to pay off your debt and move forward with your life so that you can fund these trips with cash later (and not feel an ounce of guilt while vacationing), then cancel your trips.

    Yes, I said it.  And I know it sucks. It’s horrible. 

    You work hard all year long, and you want to spend some quality time with your friends and family. But if you truly want to become debt-free, it’s important to put this type of money towards your debt.

    If you absolutely can’t stand the idea of not taking a vacation; then maybe try to plan a trip that is more frugal in nature.

    You can try vacationing for a weekend instead of a full week. Or you can plan a staycation to cut down on some of the costs like traveling.

    Some other ideas are to get a hotel room that includes a kitchen to save on eating out, or to vacation with others to split the cost of lodging.

    debt free vacation

    Photo by Vincent Gerbouin from Pexels

    Visualize your future

    The process of paying off your debt will be hard. I’m not going to lie. 

    If you were naturally a saver already, then it may be easier. But if you liked to spend your hard earned money, then it will take some adjusting to get used to this new lifestyle.

    You may want to create a list of all the things you want to do when you are debt free. Maybe you will be able to save money for college, or buy a car in cash. (No hefty car payments!)

    You may want to start donating to local charities or finally buy a house for your family.

    By keeping your goals in mind, you will be able to stay on track and continue to pay off your debts quickly.

    Some other ideas that will help you stay motivated and keep your eyes on your future are to create a vision board.

    If you are a woman, you may remember creating something similar as a pre-teen; maybe with your celebrity crushes and clothes you wanted.

    But in this case, you will make a poster board and include photos of all the things you want to be able to do once you are debt-free.  When you are feeling discouraged, by looking at your vision board, you will remember why you are working so hard.

    The finance community has so many things available at your disposal to help you on this path. One of my favorite ways to visualize my future and track my progress are to color visual charts like these

    Being able to see the progress helps me stay focused on my long-term goals instead of giving in to my short-term desires.

    Don’t deprive yourself

    Ok, maybe you are ready to go all in. Cut every expense out of your budget besides the necessities – utilities, shelter, transportation, and food.

    Maybe you will be able to live a life of eating “rice and beans” without thinking twice. It will just become natural for you.

    Or maybe you are a spender, like my husband, and the idea of cutting out all of these expenses that help you enjoy your life while you continue to work hard everyday, sounds horrific.

    When my husband and I started to pay off debt, we made so many mistakes at the beginning. 

    By depriving ourselves of everything, we tended to get so overwhelmed that we would end up spending a lot at times, wrecking our progress.

    It’s similar to when you are on a diet – you may eat healthy all day long and feel great, then at the very end of the night when feeling hungry, you may just end up eating a whole bag of Oreos. 

    Then you feel guilty that you broke your diet and splurged, and the process continues… over and over again.

    Don’t deprive yourself. If you are the type of person that can stop spending money on eating out five nights a week and getting drinks after work everyday, then great! Do it! You will pay off your debt in no time!

    But if you are struggling with this lifestyle change, that’s okay, too. 

    You may want to consider making a compromise.

    For example: If you were getting a Starbucks iced latte 7 days a week, make the decision to try to start making Starbucks at home with some of these copycat recipes. 

    By making your favorite beverages at home, you will feel less deprived and happier with your decision to stay on track.

    You may also want to plan a small amount of money in your budget to treat yourself to that caramel macchiato from Starbucks once a weekend as a reward for staying on track.

    The average drink at Starbucks is $6. So if you go from spending $42/week on Starbucks to only spending $6, it will still make a difference in your progress.

    And you won’t feel as deprived, which ultimately will help you stay on track and stay motivated.

    I feel that this is so important!  I do a Starbucks day once a week and I look forward to it every week. It’s a treat at the end of a week of making coffee at home. 

    I feel good about not having to cut it completely out of my life, but also for not spending an extra $36/week on it, and being able to put that money towards our debt instead.

    The same can be done with eating out. If you were buying lunch everyday at work, maybe try making your own lunch to bring, and only purchasing lunch when you know that food truck you love will be coming by the office.

    Instead of going out for dinner a few nights a week, pick one night a week as the “restaurant dine-in” night. 

    In our house, we have stopped going out to eat because of the pandemic, so on Saturdays (which used to be our restaurant night), we get pizza or take out. I get a break from cooking without screwing up our budget or our progress of paying off debt.

    Treat yo’ self

    If you have watched Parks & Rec, then you can picture in your mind Tom and Donna right now. In this hilarious TV series, they pick one day a year to treat themselves to whatever they want.

    Now, since you are in the process of paying off your debt, I wouldn’t recommend going that far.

    But, you may want to pick one day a year where you “Treat yo’ self!”

    This goes along with the point I was just making about not depriving yourself. By choosing one day a year to buy something that you really want, you will feel a little bit better about not spending money on yourself the remainder of the year.

    Before we started paying off debt, I used to buy whatever was in fashion at the time, and I would buy things for my husband and kids’ almost every time I went to the store.

    It was a bad habit and a habit that I had to change in order to pay off our debt.

    What I recommend is to pick one day of the year to spend some money on something you really enjoy. Ours is usually after we get our tax refund.

    My husband and I will put 80% of our tax refund to debt, then allot a small part of the refund to treating ourselves. I will get my hair highlighted, he will buy some new toy, and we will buy a few things for the kids.

    Celebrate the victories

    Paying off debt can be a life-changing process as you realize what becomes important and what ultimately is not. It’s important to celebrate the victories that you achieve throughout your journey.

    Every time we pay off an account, we like to celebrate. Usually that means we’ll go to Yogurt Mountain or Sweet Frog with the kids to get some ice cream.

    Make sure you celebrate your victories. You are working hard and should reward yourself for that hard work. You do not have to buy something in order to celebrate either.

    Maybe you decide to make a nice steak dinner with a bottle of wine that’s been sitting in your basement for a few years.

    Just because you are learning how to get out of debt on a low income doesn’t mean you can’t celebrate the little wins!

    Learning how to pay off debt when living paycheck to paycheck is possible. Good luck on your debt-free journey!

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      how to pay off debt when living paycheck to paycheck
      How to get out of debt on a low income


      Guzman, Gloria.  New Data Show Income Increased in 14 States and 10 of the Largest Metros.  United States Census Bureau, 26 September 2019.  https://www.census.gov/library/stories/2019/09/us-median-household-income-up-in-2018-from-2017.html

      2019 Modern Wealth Survey.  Charles Schwab & Co., Inc., 2019.  https://www.aboutschwab.com/modernwealth2019


      Photo by Avery Evans on Unsplash


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