How to Pay off Debt Fast on a Low Income: 6 Ways to Kill Debt for Good

It’s not always easy to know how to pay off debt fast on a low income. At the beginning of my pay off debt journey, I was working a minimum wage job, and the $50,000+ number just felt so staggering. I had no idea how to pay off debt quickly on a low income and felt like giving up before I even started.

Thankfully I didn’t give in to that feeling. Just over five years later I was debt free and on my way to pursuing financial freedom. If you’re looking for the best way to pay off debt with low income, this article will give you the tools you need to kill your debt for good.

How to Pay off Debt Fast on a Low Income


Paying off debt is not easy, especially if you’re trying to break the paycheck-to-paycheck cycle. However, it can most definitely be done. The Internet is full of successful debt payoff stories, and the commonality they share is that everyone in debt worked their tails off to get rid of it.

If you’re wondering how to get out of debt on a low income, the key is to get real with yourself. You need to assess your situation honestly and have a reality check on the seriousness of the debt.

No, this is not easy, but it is vital to wiping the slate clean and creating an attack plan to kick your debt to the curb.

Here are a few of the key things to do when trying to figure out how to pay off debt fast on a low income:

  • Have a reality check with your debt –determine exactly how much debt you have
  • Decide which sacrifices you’re willing to make to kill the debt
  • Start tracking every cent you spend
  • Save AND make more money
  • Have a visual or written goal
  • Most importantly, extend yourself some grace 🙂

That last bullet is important because you will make mistakes. That’s okay. You’re human, and we all make mistakes. Paying off debt is difficult, but it’s that much more so if you don’t give yourself some leeway.

Determining how to pay off debt fast on a small income is half the battle, extending yourself grace is the other half that helps you become successful.

1. Start a Minimum Needs Budget


The first step in paying off debt on low income is to set a minimum needs budget. If you’ve not lived on a budget before, here’s a great guide on how to make a budget.

A minimum needs budget works just as it sounds. You determine the minimum you need for day-to-day living, or what you absolutely need to survive. Look first at your large expenses, which are:

  • Your housing
  • Your car
  • Your food

Look for opportunities to save money. Maybe that means getting a roommate. It can also mean selling your car and getting a cheaper one or taking Lyft or Uber if it’s cheaper. It may also mean cutting down on food costs if you like to eat out.

The purpose of this is to free up money to throw at your debt. Next, you want to look at things you don’t need. Those can be a variety of things from needless subscriptions to cable TV.

You can spend time trying to cut or negotiate those bills, or you can use Trim. Trim is a free to use app that negotiates bills to lower rates and cancels old subscriptions allowing you to bank the savings.

Again, the purpose of this is to free up money to throw at your debt.

The simplest way to set up your minimum needs budget is to track your spending. You want to keep track of every cent you spend so you can see where your money is going.

We use Personal Capital as it’s free to use and lets us see all of our finances in one place. Find what works for you, even if it’s a piece of paper and track everything you spend so you can find opportunities for extra money to throw at your debt.

2. Give Yourself Freedom


I owe this trick to the credit counselor who helped me start my journey in paying off debt. Their suggestion was to set aside a certain amount of money each month to do with as you please.

Yes, it may sound contradictory to a minimum needs budget. It’s not. Paying off debt fast on a low income is a challenge. You make that challenge much more difficult when you have no outlet to do something you enjoy.

For me, I held back $10 per month in the beginning. That allowed me to go see a movie every month, which helped stave off debt fatigue and kept me going more times than I remember.

Determine the amount you want to hold back, start small, and freely use it on what you want.

3. Bring in Extra Money


Cutting will only take you so far. If you truly want to know how to pay off debt fast with low income the power is in making extra money.

Cutting is great, but it has limited reach. You can optimize what you’re doing by making extra money. There are many ways to make extra money, the easiest being right where you work – such as:

  • Ask for a raise
  • Work overtime

Take the bump in your pay and throw it at your debt. If those aren’t an option, there are still many other options to bring in extra income. Here are some ways that require little skill:

  • Drive for Lyft. They have a $250 sign on bonus, and you can set the schedule to what fits your needs.
  • Drive for Uber Eats. Similar to driving for Lyft but you deliver meals.

Don’t want to add an extra job? You can make money in your downtime by taking surveys. They won’t add a lot, but every little bit helps when trying to pay off debt quickly on a low income. Some of our favorite survey sites are:

  • Survey Junkie – They deposit your payments straight into your PayPal account and are one of the top rated survey sites.
  • Pinecone Research – They pay $3 per survey, directly to your PayPal account.
  • Opinion Outpost – One of the top survey sites in the industry and they have $10,000 quarterly drawings.

These are just a few of the ways to make extra money to pay off debt. Here are 50+ other ways to make extra money that you can use to pay off debt fast.

4. Maximize Your Payments


I always used to think that making the minimum payment on my credit cards was a good thing. It’s not, for one simple reason. When you make the minimum payment, very little actually goes towards the debt balance with most of it going towards the interest.

Paying more than the minimum is where you really gain momentum.

This is where saving and making extra money is key as it gives you more money to throw at the debt. If you want to know how to pay off credit card debt fast on low income, a critical piece is to lower your interest rate.

Lowering your interest rate means less money goes towards the interest and more goes towards the actual debt. When you combine that with saving and making more money, you can really start killing your debt.

If you are paying 15-20%+ on your credit cards, Avant can help you lower those rates by half or more. Even reducing your rate by a few points can do wonders to helping you pay off debt quicker.

5. Pay Yourself First


Paying yourself first sounds difficult, but it’s actually quite simple when done the right way. Paying yourself first means that you take a certain amount out of each paycheck, before you pay anyone, and put it in savings.

This helps you build savings so when you run into an emergency you have cash to fall back on instead of pulling out a credit card, which only keeps you in debt longer.

Many online savings accounts let you automate this savings and have no minimum balance requirement. It doesn’t matter if you start by saving $5 per month in the beginning.

The point is to start so you can grow your savings and not continue the cycle of debt.

Barclays Savings lets you start with no minimum balance and pays 1.50% on your cash. Saving money may sound unwise to do when paying off debt, but it’s the best way to kill your debt and stay out of debt for good.

6. Identify Your Triggers


Triggers are huge when paying off debt. Heck, triggers are huge even if you’re not in debt. Triggers are what get you to spend money.

My trigger was boredom. It still is to a certain extent today. I’d get bored and go to the mall and spend money I did not have. That just continued my cycle. The key to my success was identifying that trigger and knowing how to counteract it.

This requires getting to know yourself and how to avoid problematic situations. You can even get an accountability partner to help you avoid those triggers.

Want to know how to pay off debt fast on a low income? Here are 6 ways to pay off debt quickly and taste debt freedom sooner than you think possible.

You Can Have Success


Trying to pay off debt fast on a low income seems impossible. It feels like you will never have success. It feels like it will last forever.

Those are all lies. It is possible to pay off debt fast, but it does take a lot of work. The key is to take one day at a time. Some days will be tough, but those are balanced out by good days when you have the right mindset.

Set goals for yourself along the way and follow these steps; you’ll be amazed at how soon you’ll enjoy the taste of debt freedom.


What are some other ways to pay off debt fast on a low income? If you’ve paid off a large amount of debt, how long did it take you to kill it? What are some things you wouldn’t sacrifice to pay off debt?

The post How to Pay off Debt Fast on a Low Income: 6 Ways to Kill Debt for Good appeared first on Frugal Rules.

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