How To Get Out of Debt With Low Income

Worried couple feeling frustrated while have to pay their bills over Internet.
skynesher /

When it comes to personal finances, any amount of debt can feel inescapable and crushing. Becoming debt free, when you think about it as a whole, might be too overwhelming. Instead, try breaking your debt repayment journey into clear-cut achievable steps. Whether it is through personal loans, student loans or even credit cards, here is how you can get out of debt with no money. 

5 Steps To Take To Get Out of Debt

If you have a low income or are living paycheck to paycheck, it may feel like there isn’t enough money to go around to start paying off your debts. Fear not, for even with no money, you can start to get your house in order and begin painting a better financial future for yourself. Here are five steps to take to begin lowering your debt each month until you are debt free:

  1. Analyze how much you owe
  2. Avoid taking on new debt
  3. Build a budget
  4. Start a side hustle
  5. Start small

1. Analyze How Much You Owe

The first step in paying off debt is to be aware of how much debt you actually owe. Your financial situation is unique so it makes sense to pay your debts in a way that best works for you. Here are things to consider when assessing your debt:

  • What can you save per paycheck?
  • What expenses can you eliminate?
  • Does a weekly or monthly budget work better for you?
  • What is the total principal balance on each debt?
  • What is the interest rate on each debt?
  • How many credit cards do you have?
  • Do you have personal or student loans?

2. Avoid Taking on New Debt 

The last thing you want to do while trying to alleviate your debt situation is to keep adding to that tab. Cut out unnecessary spending and don’t open new credit card accounts or take on personal loans. In general, you should be careful of borrowing from one source to pay for another unless you have a specific strategy such as using a balance transfer credit card or consolidating your debts into a loan with a lower interest rate than you are currently paying. 

Investing for Everyone

3. Build a Budget 

Creating a budget is crucial for your financial journey. If you are someone that likes a specific strategy, a good one to start with is the 50/30/20 rule for financial planning and budgeting. It works by breaking down your income into three categories including needs, wants and savings and dividing them accordingly. This will allocate 50% to needs, 30% to wants and 20% to savings. 

4. Start a Side Hustle 

Earning some extra money on the side can be a great way to pay off your debt faster over a short period of time. Though this will cost you in more time and energy, it will not cost you financially and many side hustles can be done remotely and on your schedule. 

Many online gigs pay well for your time and this extra income can increase your net worth thus making debt payments slightly easier. Here are some examples of online side hustles worth considering: 

  • Online surveys
  • Dropshipping
  • Online focus groups
  • Social media manager
  • Virtual Assistant

5. Start Small

Paying off debt takes motivation and the debt snowball strategy can be a great way to stay motivated. Organize your debts from lowest to highest and then start by paying off the lowest first. When you pay that off, move to the next lowest, and so on. Seeing all those different credit card balances turn to zeros one at a time can be encouraging. 

If a more aggressive approach is your style, you can also do the opposite with the debt avalanche strategy and start paying off your account with the highest interest rate first, while just making the minimum payments on any other debts. By working your way down from high-interest rate debts to low-interest rate debts, it will be more money upfront, but you may save money in the long run.

Investing for Everyone

Final Take: Other Debt Relief Options

Following these steps makes it possible to reduce your debt systematically even if you have a lower income or are living paycheck to paycheck. If you have assessed your financial outlook when compared to how much you owe, and you still feel you need help, there are many financial relief options available. 

Though you should do your research before signing up for any debt forgiveness program, these companies can help you negotiate with creditors as your proxy and potentially decrease the amount of money you owe. Your debt doesn’t have to be set in stone, nor do you have to hold onto that stone while you slip further into debt. By seeking outside help, you could lower your monthly payments and interest while also raising your credit score all at the same time.


Here are the answers to some of the most frequently asked questions about getting out of debt.
  • How can you get out of debt fast with no money?
    • To get out of debt faster with no money, try to tackle your debt through these steps:
      • -Analyze your financial situation
      • -Avoid taking on new debt
      • -Build a budget
      • -Start a side hustle
      • -Start small
  • How do you pay down your debt if you live paycheck to paycheck?
    • Living paycheck to paycheck can be difficult when it comes to paying down your debt. Fortunately, there are moves you can make such as analyzing how much you owe and then creating a budget. Sticking with a monthly payment plan can work by executing a debt snowball strategy or even seeking council through a debt relief program.
  • How do you get out of a huge debt?
    • Getting out of a huge debt may not be possible overnight, but there are several ways to chip away at it until you can lower it or refinance. You could start by paying more than the minimum on debts you owe which can lower your debt faster, improve your credit score and save you on interest rates.
Investing for Everyone


See Today's Best
Banking Offers