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How To Pay Off Debt On A Low Income

How To Pay Off Debt, Even On A Low Income: 9 Ways to Get Started

Not all of us are making six figures. Luckily for us, we don’t have to make big money to pay off debt. How can we pay off debt on a low income?

At LMM we tell you that your debt is an emergency. And like any emergency, the longer you wait to deal with it, the worse it gets. So you might be waiting for the next big raise, the next new job, the winning lottery numbers to help you tackle it.

But what if those things are slow in coming, or in the case of the lottery numbers, never come? Don’t let the emergency get worse. You don’t have to be making big money, or even more than you are making right now in order to at least start paying off debt.

Cut Down On The Biggest Expenses

Obviously cutting down on the most expensive aspects of life will yield the biggest results. They will also probably be the most painful cuts, but remember, we’re in an emergency situation here.


The rule of thumb is that your housing expenses should be no more than 30% of your income. But not all of us are adhering to this rule. More than a quarter of Americans are paying 50% of their income on housing.

Even if you are at 30% or under, if you have debt, this needs to change. You have two choices; you can get a roommate or you can move to cheaper digs. Or maybe you have a third choice. Is your place in a desirable location? You might look into renting it out via AirBnB. 

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Getting from place to place is likely our second biggest expense. Even if you are lucky enough to live in a city with good public transport, it’s still not free. A monthly Metro Card for the NYC subway is $116.50. That might seem like a bargain if you are paying a car payment and the cost of gas in the burbs, but remember, NYC cost of living is expensive!

If you are a two car family, cut it down to one. It will be painful, sure, but remember, emergency. Can you car pool, walk, cycle, one person drops off and picks up the other? It’s convenient to have two cars but how necessary is it?

Walking or biking to work have benefits beyond just saving money too. More exercise, less pollution, less aggravation. When I worked in an office I always walked to and from work. Sometimes as much as 45 minutes each way and in all kinds of weather. Such is my mania to avoid giving the MTA one cent I don’t have to given their crummy service. And to save money of course.


If you keep a budget, and you should, you’ll probably see this category as one of your biggest money hemorrhages. If you aren’t tracking your spending, start now. You’ll likely be surprised and maybe horrified at how much you spend here.

Maybe you don’t like to cook, some people don’t. So you eat out a lot. But you may also not like cleaning, doing laundry, running errands. But you still do it because it’s part of being a grown up. Think about it, really you could outsource those other things like you’ve been outsourcing feeding yourself.

So why don’t you? Because that would be a huge waste of money. Well, how is eating any different? It isn’t so knock it off! I won’t even tell you that you have to eat healthy, although you should and you can in an affordable way. Buy lots of frozen dinners when they’re on sale, buy lots of Ramen, whatever. But you must start eating at home and taking your lunch to work.

Save Money On Groceries

Looking for a way to save money? The shopping trolley is one of the easiest places to cut spending. Here is our ultimate guide to save money on groceries.

Sweat The Small Stuff

This is only for those people in debt. If you’re just looking for more money to invest or save, I don’t like to advise people to watch every cent and never buy little things like coffee on the way to work.

But if you are in debt, emergency. So you’re going to have to watch those little purchases that add up.

Daily Habits

The daily coffee buying habit gets a lot of grief and to me, it’s well deserved. Don’t you people have coffee makers at home?! I have literally not left my house without drinking coffee first in 25 years. Not once! Not even when I had early morning surgery scheduled and the doctor told me not to. I still sneaked half a cup to avoid the withdrawal headache.

So I don’t understand people who swear they can’t function without coffee but manage to shower, dress, and leave the house before they buy some on the way to work. No more Starbucks!

Even if you’re a coffee snob, buy the best machine, beans, whatever else you require and make it at home. You will still be spending less. But really, Cafe Bustelo makes a tasty cup of coffee and is about $5 a brick. Get over yourself!

Coffee is an easy target for this kind of spending but it manifests in lots of other ways. Magazines at the check out line, a drink when you get gas, a new lipstick. None of these things alone will break you but chances are, more money than you realize is going to this sort of stuff. Money that should be going to debt.

Buy Used

Almost anything you can buy new, you can buy used. And for less, often a lot less. Do you have a rich person’s neighborhood near you? Go to the thrift stores there. Rich people get rid of a lot of stuff, some of it never used, worn, or even opened.

Clothes, appliances, kitchen items, all of this you can find at a thrift store. Sure, you need more time to look through random items to find what you’re looking for and it takes longer than running into Target and grabbing one off the shelf but you will pay a lot less.

Get Rid Of Subscription Services

Go through your credit card statements and find all those little amounts that you pay every month. Netflix, the gym, fruit of the month club. How much are you using them? If you’re not but have just never bothered to cancel them, make the call.

How about getting rid of cable while you’re at it? If you watch most of your television on-line or don’t watch it at all, cut the cord. Although you’ll want to maybe reconsider jettisoning Netflix if you do this. Netflix is a good, cheap option compared to cable.

Make Some Extra Money

It’s easier to cut spending than make more money but making more money usually generates bigger numbers.

Work Some Overtime

This won’t be an option for everyone but if you’re paid hourly, speak to your boss and see if you can pick up a few extra hours. Or if you’re job has shifts, check if the less desirable shifts pay a bit more per hour. Working nights isn’t fun but it could make you some extra money without doing anymore work. Maybe less if there’s no one watching!

Take A Part Time Job

Do you have weekends free or a few hours in the evening? This might not be realistic if you have a family, but if you’re single, put your social life on hold for a few months and pick up a part time retail job. Even if nothing is available now, lots of retailers take on extra workers around the holidays.

Start A Side Hustle

This doesn’t have to be anything complicated. If you want to grow your own business, great, but if you just need some extra cash, you have lots of options. Babysit, clean houses, drive for Uber, sign up for Task Rabbit. These kinds of side hustles are more flexible than getting a part time job so might fit into your schedule better.

It Won’t Last Forever

I know none of these suggestions are fun or easy. No one wants to move to a smaller apartment, never buy coffee out and work every weekend. But, what is our refrain? Emergency. If you can do some of these things, even for a few months, you will be much closer to killing off the debt that is killing off your future.


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