Have you struggled with paying off debt — especially if you’re living on one income? These are some great tips and tricks on how to pay off debt in creative ways!
{Need more encouragement? Read about finding contentment in the pit of debt, what to do when it feels like you’ll never get out of debt, how to overcome discouragement when you’re in debt, and how to stay motivated when you’re paying off debt.}
Guest post from Ali of Meanwhile at Naptime:
Debt is a killer. Unfortunately, our family has lots of it.
We did a lot of things wrong our first few years of paying off debt… but this past year, we were able to pay off $32,000 (in addition to our mortgage payments), and it feels so good!
How we got all that debt…
Graduate school! The majority of our debt is student loans.
We floundered a bit our first year or two after graduation, making minimum payments and telling ourselves it would all work out somehow.
After a year of minimum payments, our debt was even higher as we couldn’t even keep up with the interest.
We buckled down, made a plan and wrote up a budget.
If you’re feeling overwhelmed by debt follow these tips to become debt free on a one income!
Why We Decided to be a One-Income Family:
I want to be a stay at home mom.
I had a degree and a job, but once our daughter was born, I knew where I wanted to be.
After moving across the country for graduate school, we had no family to watch our baby and childcare costs were so high that it just didn’t make sense for me to work anyway.
We are both happy with this decision and we have been able to reach our financial goals on one income and here’s how we did it.
How We Paid off $32,000 on ONE Income!
If you’re interested in how to pay off debt, here are some of the tactics we used to help pay down our massive sum of debt…
1. We Implemented a Zero-Sum Budget
You must have a budget. No way around this one. If you want to pay down your debt you have to tell your money exactly where to go.
A zero-sum budget is simple, your income – expenses = 0.
If you have any money left over at the end of the month you are not done. You must tell that money where to go.
All our leftover money went to our student loans.
2. We Prioritized Our Debt
Getting out of debt is our number one financial goal.
We wrote down all our money goals — ALL of them. Then we prioritized and dropped those that wouldn’t fit in this year. We placed our student loans at the top.
Sometimes when motivation started slipping we had to ask ourselves, would I rather go out to eat or be debt free?
With that as our goal, we were able to keep ourselves on track each and every month.
3. We Put Our Entire Tax Return Towards our Debt
We didn’t keep any of it — once that money came in, we threw it right at the debt!
4. We Used a Pay Raise to Increase Debt Payments
With our budget in place, we knew how much money we spent on things like groceries and utilities.
When my husband got a raise, the only numbers that changed were our debt payments and our savings.
5. We Put Any Bonuses Towards Deb Payments
Any time we got a bonus at work, we put ALL of it toward our debts.
6. We Canceled Subscriptions
When creating our budget, we had to make some sacrifices — subscriptions were one of the first things to go.
For instance, I had been getting HGTV magazine for years. It was hard to say goodbye; but now, a year later I don’t miss it at all. Similarly, this year, we’re dropping Netflix to see how much closer we can get to our goal.
7. We Skipped Vacations
We decided that we could have fun at home without a vacation. It was a tough decision but we saved hundreds of dollars by skipping the vacation this year.
Create a family bucket list full of free or cheap ideas instead of a family vacation this year (see below!)
8. We Found Free Family Events
Honestly, this one was one of our favorite “sacrifices”.
By looking for free events we got to know our community quite well and saw how much our own city has to offer.
Our local radio station has been a great resource for finding free events. We also checked with our local parks department, local schools, and we signed up for a community newsletter.
As a result, we’ve been to museums, zoos, and even got a family caricature done for free!
Take the time to look for free or cheap events and you won’t be disappointed.
9. We Sold Our Stuff Online
Chances are there are plenty of things in your house that you don’t use or even need.
Sell them online to make some extra money.
We did… and as a result, we were able to refill our emergency fund and free up some cash for more payments!
Final Thoughts on Paying Off Debt on a Single Income
The hardest part is staying motivated. It’s hard to see your money go to payment after payment. We had to regularly remind ourselves of our desire to be debt free to keep us going.
Now looking back, our year of paying off debt was actually a lot of fun — and SO worth it.
We made many sacrifices, we followed a strict budget, and we prioritized our debt. We worked hard and found lots of ways to save money too — and as a result, we paid off $32,000 in just ONE year, living on ONE income! I am forever grateful I get to stay home with my babies every day.
We’re still working on our debt, and hoping to do EVEN BETTER this year!
What are your best tips for how to pay off debt on one income?
Ali is a stay-at-home mom to three kids. She is mastering the art frugal living and helps stay at home moms learn how to control their finances while running a home. Read all about mom life and frugal living at Meanwhile at Naptime.
