How to Pay off Debt...When you live paycheck-to-paycheck

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Wanting to pay off debt may seem nearly impossible when you live paycheck-to-paycheck. But I’m here to tell you that it is absolutely possible! If you have student loans or credit card debt – it is possible to get these debts paid off. Paying off debt will allow you to live more comfortably on the salary you currently make. Debt is stressful, and can keep you awake many nights worrying. If you are reading this perhaps you can relate. Let me walk you through a few key steps that may be difficult, but if you take a serious look at your financial situation and put these steps into action, you will see results.

SET GOALS

However simple this may sound, setting realistic goals is the most important step in this whole process. Get out a pen and paper and write down these three things:

WHAT DEBT DO I HAVE AND NEED TO PAY OFF?

Be specific here. You need to know how much your total balance owed is as well as to whom you are going to be making the payments. Get out envelopes and pre-address them if that helps, so there are no excuses when it comes time to sending in a payment. If you use online banking you can also set up automatic payments.

DO I HAVE CREDIT CARD DEBT?

This is a tough one, but if your answer is yes then you need to either freeze these cards or cut them up. It will be difficult to pay off debt while you are still accumulating debt. Now I am a believer that a card for emergencies is ok but you have to be strong enough to only use it for emergency purposes. I’m talking real emergencies, vehicle repair, home maintenance, medical care…etc. If you tend to use your credit card haphazardly then I suggest cutting them up and throwing them in the trash so there is no temptation. This also means deleting your card information from online stores, Google wallet and anywhere else you may have it saved.

WHAT IS YOUR END GOAL?

Maybe your end goal is simple, to live comfortably on the salary you currently make and be debt free. Or maybe you want to be able to add money to a savings or retirement fund each month. Whatever your goal is, you need something to work towards.

How to Pay off Debt…When you live paycheck-to-paycheck

Download the printable shown below, and get started on your plan.

KNOW WHERE YOUR MONEY IS GOING

Do you know where your money goes each month? Are you always caught by surprise at the end of the month when you have nothing left? This is a huge problem for most of America. If this is you, it’s time to go through your finances with a fine tooth comb. With technology today, there is no reason why you should not know where every penny of your money is being spent. Apps like Quicken, Mint, GoodBudget, PocketExpense and Expensify can help you stay on top of your budget with the ability to see exactly where your money is going. Once you see where you are spending, then you can decide where to start cutting back.

CUT BACK. WAAAAAAY BACK.

Now that you know where your money is going, where can you cut back? Are you eating out a lot? Start planning your meals and grocery shopping. One option is Walmart Online Grocery. If I’ve gone over budget, then you can take things out of your virtual shopping cart and plan meals around what you can afford. Not to mention, no impulse purchases because you never have to go inside the store. Simply pull up and they load the groceries in your car for you. Impulse buying is HUGE when you are trying to cut back.

Take these things into consideration:

Take your lunch to work, no more eating out.
Make your coffee at home, those $7 lattes from your favorite coffee shop add up quickly.
Shop around for cheaper car insurance.
Do you have cable? Ask yourself if you really need cable?
Can you cut back to just internet and watch Netflix instead?
What about your cell phone? Can you call your provider and switch to a different plan? Can you ditch the cell phone all together, even if just temporarily until you pay off debt?

These are things you need to start working on right away. Make a list of your expenses and cut back. Waaaaaay back.

Visit Walmart’s website to find out if the location near you offers grocery delivery.

MAKE EXTRA MONEY

If at all possible, try to make some extra money and put that money directly towards paying off debt. Can you get a second job? For some, this just may not be possible. Don’t give up yet though, check out my post 10 Easy Ways to Make Money Now. In addition to suggestions given, if you do any shopping online, be sure you are signed up for ebates to earn cash back. For items that I use, such as Clinique makeup (which I purchase during bonus time) – I order online at the local stores to earn cash back and then pick it up at the store. I can run in quickly, grab my order, and get out without “shopping.” I have earned just shy of $300.00 cash back!