How to Pay Off Debt on a Low Income

Is debt crushing your spirit?

Are you wondering how the hell you are going to dig your way out of the mess you are in but have absolutely no idea where to start?

Oh, honey.

It’s a horrible disempowering feeling and you absolutely don’t deserve this. I can help you.

I’ve also clawed my way out financial disaster.

I was spending waaay more than I earned after the demise of my marriage. Trying to fill the void of my loss I guess. (His loss really, haha 🙂 )

I realised I had a problem when I’d spent upwards of $2000 on eBay and I opened one of my prized purchases that arrived (a mystery box – so exciting!) and it was full of…well junk.

Someone must’ve bought a bunch of things from the op shop and shoved them in a box. That box cost me $80!!!

Nooooo! Excitement quickly turned into despair. Tears rolled down my face and I cried and cried that day finally seeing the big problem I had.

What the hell was I doing? Spending money I didn’t have as a newly single mother to a 2 year old?

So I understand how easy it is to get into trouble. It’s not how it always has to be, you have the power to change this.

If I can do this so can you.

Seven years later I’m rocking my finances and am debt free and financially independent and it’s entirely possible for you too.

Here are 6 strategies you can use right now to pay off debt, even if you have a low income.

1. Know Why You are Spending in the First Place

Often there are underlying reasons for the excessive shopping and It’s not that you need lot’s of shoes!

Identifying the triggers that lead to spending in the first place must be the first action you take in order to start sorting this out once and for all.

Next time you take out the plastic to tap, take a minute to reflect on why you need what you are buying.

Identify the motivation and ask yourself the following questions:

  • Is it a habit? Do I always hit the mall on Saturday because I deserve a reward for working so hard all week?
  • What was I thinking about before I entered the shop?
  • Are you, like I was, trying to fill a loss in your life with new things?
  • Do you feel like you aren’t good enough without the latest clothes?

Try to dig deep and see if you can find the underlying reason.

Knowing the reason you are spending excessively in the first place will save you regressing later once you’ve smashed your debt and you’re back in the black.

2. Face Your Demons

This is really hard but you need to know what you are dealing with. Time to exit the pity party and move into acceptance no matter how scary this seems. Time to say “enough” – don’t end up ruined by this. It stops now! Ok. Are you ready? Here we go: Get a pen and paper and list each of your debts and the interest rate you are paying.

Finance Company Interest Rate Amount of Debt Debt Free Goal Date
Debt #1
Debt #2
Debt #3

Start paying off the debt with the highest interest rate and then move on to the next one. The interest you are paying is an absolute waste of money. You are never going to get ahead if you allow interest to continue accumulating so reducing this as fast as possible needs to be #1 priority

3. Needs vs Wants

For some skinny budgets there’s not much room to move but there needs to be some changes made if this is going to get any better.

Time to sort your priorities. Step up and see where you can save money.

I always strip back to the absolute necessities (and no, takeaway coffee isn’t one of them sadly!)

Food, shelter, clothing and safety. You get the idea. These are needs verses wants.

                             Needs Wants
Basic Shelter Beachfront Property
Nourishing Food Restaurant Meals
Basic Clothing Designer Couture

Write up a budget and stick to it.

Try this one to start with: [convertkit form=4977977]

There will be some expenses you are contractually tied to like internet / mobile plans in this case try speaking to your provider and see if you can negotiate a lower payment because of temporary hardship. Do this with all of your services.

Even though your grocery budget comes under food it is by far the easiest place to save a lot of money.

Try going a month without buying anything in a packet and see your savings take off like a rocket!

Buy only real food (meat, fruit & vegetables) and buy in bulk where you can.

This minimises the trips to the supermarket (and opportunities to get sucked into buying things you don’t need!).

You’ll feel better for it and probably lose weight too. Bonus!

4. Get Motivated and Make Killing Debt #1 Priority

You can do this!

I’m a very visual person and I find having my goal in my face every day keeps me laser focused on the end game.

So write your savings goal on a piece of paper and stick it above your desk at work, on the dashboard of your car and on your fridge.

I also write my money goal in notes on my phone and take a screenshot. Then I make it my home screen 🙂

5. Stop Watching TV

Controversial I know.

I originally stopped watching commercial television because of the news.

The newsflashes would pop up throughout the day and I didn’t want my little one to see the fire and hear the screaming from the television. So we watched kids TV instead. ABC for kids was awesome – no advertisements and totally family friendly.

Happy accident – by doing this I limited the brainwashing effect of the constant marketing that made me feel inadequate because I didn’t own the latest thing.

While I’m wondering how to keep the power connected I don’t need the guilt trip. #justsayin

Once I realised how powerful this was I never went back.

6. Increase Your Income

Sometimes it’s beyond a budget. You can’t save what you don’t have.

Can you consider taking another job? Negotiating some extra overtime?

Hustle is going to be required lovely, if you’re really serious about smashing this debt quickly.

What are your options for making money quickly (& legally!)?

Here’s a few ideas to get you started:

–         Sell Everything You Don’t Need

Have a big clean up and put the gear up on eBay or gumtree.

Reassure yourself that you can always buy it back once you are back in the black. (You may find you’re ok without it!)

Even the small things add up so go through your wardrobe and sell anything with a brand name.

You’ll be surprised what people will buy.

My house currently looks like I’m about to do a runner lol. I’ve sold loads of my things and it’s actually made my house so much easier to clean without all the furniture.

It’s really surprising how little you need to get by.

Be brave and just do it!

–         Start Freelancing

I’ve been freelancing for the last 11 years as a bookkeeper and it’s been the best thing I ever did! I earn way more than I ever did as an employee and these days I earn over $50 per hour!

More and more people are making their living online and you can too!

What skills do you have that you can move into the online space?

If you don’t know where to start then do some research and see what skills are in demand that you are happy to do.

Sites to check out are, &

If you’re not able to work online because you disconnected your internet to save money never fear, offline options are lawn mowing, babysitting, ironing, mending and cleaning. Get creative!

I saw an enterprising little man at the local farmers market selling worm juice! Options are only limited by your imagination.

To summarise:

In order to smash your debt even on a low income you need to do the following:

  • Know why you got into debt in the first place
  • Face your demons and write down how much you owe and their interest rates
  • Get back to basics and only pay for necessities until your debt is under control
  • Get laser focused and motivated. Put your goal where you will see it every. single. day.
  • Stop watching TV – to make your life even more miserable lol.
  • Increase your income by:

o   Selling anything of value you’re not using

o   Freelancing, babysitting, cleaning, ironing, lawn mowing or even worm farming :).

You really can do this. You aren’t alone in this.

Taking it one day at a time and save more than you spend and you’ll be debt free before you know it.

Then you can have fun buying back all your furniture haha!

What creative ways do you use to save money? Let us know in the comments below.

I love hearing from my readers! Write to me and tell me your story about how you got into debt (so I don’t feel so bad!) and I’ll write back to you with some more helpful hints 🙂

I’d love to hear from you.


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