How to Pay Down Debt When You Don’t Make a Lot of Money

Almost half of all Americans carry a credit card balance from month to month, sometimes at a balance of thousands of dollars.[1] The average American doesn’t have the recommended amount in savings, much less thousands to put towards their debt. Sometimes, life happens, and you’re forced to take a personal loan to pay some expenses, such as a car repair or an unexpected move. When you’re faced with that kind of uphill battle, it’s easy to give up on ever paying the debt down and resign yourself to a life in debt. Luckily, there are some easy steps you can take to pay down debt when you don’t make a lot of money.

It’s all about making small changes, paying things a little at a time, and seeing your debt balance go down slowly over time. This is the way that people can make the uphill battle to pay down debt seem a little easier. You won’t magically find $5,000 in your bank account by following these tips, but you can find an extra $100 or so per month with these simple tips.

1. Be Honest with Yourself

This might seem obvious but actually, it’s very easy to overestimate how much money you have coming in versus how much you have going out. By taking an honest look at how much you’re getting paid and how much you’re spending each week, you can really make a difference over time. That weekly fast food habit can really add up, and you’d be amazed at what you can buy if you quit smoking or drinking.

The next step is deciding which expenditures are necessary and which are luxury. For some, that Friday Frappuccino habit is ‘necessary’ for the person’s mental health and well-being, but that same person has to cut expenses somewhere else to make up for it. It’s very important to be honest and upfront with yourself about how much you are spending each month when you could be spending it on paying down your debt.

2. Stop Eating Out

Everyone loves to go out to eat, but when you go to a restaurant you’re paying for the experience as well as the food, which can get expensive. Even fast food in larger quantities can seriously add up.

Instead, buy groceries or snacks in bulk to ensure that you always have something nearby. This way, you won’t have to stop to get something to eat, and you can put those savings into your credit cards to help pay them off.

Consider cutting expenses even more if you are living paycheck-to-paycheck by limiting your diet to less processed foods and learn to cook to make the most of your groceries. Learning to pay down debt when you don’t make a lot of money is all little steps, and skipping the restaurant goes a long way.

3. Cancel Unnecessary Subscriptions

If you are someone who has multiple subscriptions to YouTube, Spotify, Hulu, Netflix, Amazon, etc., then it’s time to pick some favorites. All of them have their benefits and merits but decide on one or two that you really want and get rid of the rest. Put that money directly back onto your credit cards. You could easily be spending upwards of $100 in subscriptions and not even realize it until you put it on paper. For some, getting rid of Amazon Prime means the temptation to shop online is no longer there because you have to pay to ship. If that’s you, then doing this will save you even more!

4. Choose the Highest Interest Card to Pay Down First

When you are trying to pay down debt when you don’t make a lot of money, choosing where you put your cash is particularly important. If you have several credit cards that you are paying the minimum monthly payment on because you just can’t find the extra money anywhere to pay down more of the debt, choose one to focus on. Continue to pay the minimum on all the rest until you pay down the one you’re paying the most on. Even putting the extra $20 you save a week by not buying fast food can put $1,040 toward the principal in a year! That will go a long way toward helping pay down debt when you don’t make a lot of money.

5. Don’t Be Fooled by the “Only” Trap

It’s easy to say it’s “only” $5 for that burger so it doesn’t matter, but it does. If you save that $5 every time you said it’s “only” $5, you’d likely have $20, $50, or even $100. Conversely, it’s easy to say it’s “only” $5 so it won’t make a difference in paying down debt, but it does! Every little bit helps as it cuts down interest payments and small success begets big change. If you make little changes, you’ll feel the small success in putting an extra $20 toward paying down your debt. Then watch how those habits suddenly help you pay off even more.

6. Consider a Debt Consolidation Service

If you’ve made your realistic budget, curbed your weekly fast-food budget, and put the extra money you’re saving on extraneous subscriptions towards your cards but still aren’t seeing the results you want, consider getting professional help to eliminate your debt.

UmbrellaDEBT is available to help you to take action to pay down your debt even more. They will help without judgment and listen to your unique debt situation before suggesting tips to help. Their counselors will try to guide you to the option that fits your lifestyle the best, saving money and helping you become debt-free sooner.

If you have credit card debt, unsecured personal loan debt, collections debt, or other unsecured debt then let the caring counselors at UmbrellaDEBT try to help you.



Umbrella Debt Relief 1-844-389-6745
200 W. Palmetto Park Road Suite 200 Boca Raton FL 33432