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Paying off debt when you have no money is hard.
To be blunt, your debt is making you broke, which means you can’t pay off your debt. It is a vicious cycle that you have to break in order to get ahead.
So let’s play a game of pretend.
If you are average and making $50,000 a year then you are most likely bringing home around $3,300 per month. Your rent/mortgage is likely around $1,000-1,500 which doesn’t leave you much wiggle room for the other basics like food, gas, and utilities.
You definitely don’t have room for a large car payment, student loan payment, and credit card bills.
When you look at the numbers, getting out of debt seems completely out of reach.
Here is the deal, you don’t get out of debt by focusing on the large numbers. You get out of debt by focusing on the small numbers.
Getting out of debt is all about little victories that allow you to pay off little chunks at a time.
I know it sounds counter productive, but when you look at the big picture it is too easy to get discouraged and lose your focus.
When my husband and I started our debt free journey we had $446,000 in debt. When I looked at that number, I would literally freeze up. It was such a large amount it completely overwhelmed me.
I would look at that number and get discouraged. How in the world were we supposed to pay off that much money? It wasn’t even possible. I felt like we had failed before we even started.
I finally had to completely stop looking at our debt as a whole.
We began diligently working on our smallest debt. I ignored everything else and just focused on paying off the smallest debt.
The smaller number was manageable. I could look at the smaller debts and see a light at the end of the tunnel. I could make a bunch of small payments each month and see the debt level decrease.
Seeing the decrease in the one debt every month kept me going.
Check out my post – How to Start Your Debt Free Journey for more info.
When my husband and I were working on our debt free journey we utilized the debt snowball method.
The debt snowball is very simple. You take all of your debts and write them down, smallest to largest. Ignore the interest rates and monthly payments amount.
Take your smallest debt and throw everything you possibly can at your debt. You scrimp and save and put every extra penny towards your smallest debt.
I do mean every extra bit of money, there were times when I would send in extra payments of $10-15 four to five times each month. I know it isn’t a lot of money, but those little amounts add up quicker than you realize.
Depending on your situation it may take a few weeks or a few months to pay it off, but get your first debt paid off.
Once your first debt is paid off you add the old monthly payment towards the payment for your second largest debt. Then you begin the process again. By adding the original payment amount to the second debt you are finally able to start making traction.
Then, you move on down your debt worksheet until you have everything paid off.
There is something about being able to achieve small victories that helps make the debt snowball work.
It sounds simple in theory. I know from experience it isn’t.
I can’t tell you how many times I want to give up. There were so many times when I wanted to be like everyone else and live in denial and continue to spend irresponsibly.
I’m not going to lie and say it was easy. Getting out of debt was one of the hardest things I’ve ever done.
However, here is the deal, debt never sleep. You are always accumulating interest and late fees.
If you don’t make the choice now to get out of debt you are just pushing the problem down the road. Debt doesn’t just disappear.
You have to draw a line in the sand and say enough is enough.
You have to decide that you are going to pay off your debt even though you don’t have any money.
I promise that once you begin the process you will find money. It may mean starting a second job. It will require drastically cutting your spending. You will have to sacrifice dining out, vacations, new clothes and a whole bunch of other items that aren’t really needed.
You’ll find very quickly that the things you thought you needed to make you happy were just wants.
After five years my husband and I were able to pay off $293,000 of debt, which left us with a balance of $153,000 on our home. Now two years later we owe $119,000 on our home.
It has been a long process and there were times when we both wanted to give up. Getting out of debt sucks. But honestly, every sacrifice was worth it now that we are so close to being completely debt free.
How To Pay Off Debt With No Money
I don’t have any magic answers for getting out of debt quickly.
What I can say is that you have to set goals and work towards them.
You have to let go of your consumer mindset and enjoy the little inexpensive joys in life. You have to be strong and learn to say no even when it is embarrassing and hard. Most importantly you have to stick to it.
You have to have a vision of your debt free future that is stronger than anything else in your life. Your vision has to be strong enough to keep you going when you are tired of living on beans and rice and when you just want to go out and play.
I can promise you this when you come out on the other end, every sacrifice will be worth it.
Here are some of my favorite resources to help you get out of debt:
Money Saving Tools/Classes:
- Grocery Budget Makeover– This class changed my life. I thought I was great at grocery budgeting, but this class helped me save even more money.
- 5 Dollar Meal Plan– I’m still trying to get my meal planning right, but on the weeks I actually follow through with my meal plans I always save money (and eat more healthy).
- EveryDollar– Budgeting software from Dave Ramsey. I’m not currently using this system, but it is amazing – especially for newbies to budgeting.
- Envelope Budgeting System – The envelope system is great for cash spending.
How to Budget:
- Two Unbreakable Rules of Budgeting
- How to Budget If You Have An Irregular Income
- How to Set Up a Percentage-Based Budget
- How to Create a Budget
Money Saving Posts:
- 14 Money Saving Tips to Lower Your Grocery Bill
- 5 ways to Stop Spending Creep from Destroying Your Budget
- How to Cheat Your Clothing Budget and Still Dress in Style
- How to Avoid Busting Your Budget
Favorite Debt Reduction Books:
- The Total Money Makeover by Dave Ramsey
- The Millionaire Next Door by Thomas Stanley and William Danko
- The Richest Man in Babylon by George F. Clason
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