How to Start Paying Off Debt…even with no extra money

If you have a boat load of debt and not enough money, read on to find out how to start paying off debt with this one simple tip. You can become debt free months or even years faster!

R ecently, I overheard a woman discussing making a purchase. “It’s only $50,” she said, “I should just go ahead and buy it.”

I’m not sure what she was buying, but that phrase struck me: “It’s only $50.” I thought to myself, she must not know what saving an extra $50 can do!

When we were in debt, barely making ends meet on a low income, my hubby and I decided to put a little extra ($39 each month) toward our loans.

It seemed like such a small amount would be like trying to give your kids a bath while they’re in the middle of making mud pies. I thought there was no way it would make a significant difference in paying off debt – until we started looking at the numbers.

How to Start Paying Off Debt

That’s when I learned the value of what once seemed like an inconsequential amount and what a big difference it can make to help you pay off debt, even with a low income.

You can change your financial situation drastically by saving just a little extra money each month.

If you put even a few extra dollars per month toward your loans can cut YEARS off the payback period. Yes, paying a little bit extra each month can make a huge difference and help you start paying off debt faster.

So what does saving money, even just a little bit, do to help your bigger financial outlook?

Woman at laptop with coffee

Here’s how it works…

Let’s say you have a car loan: $5,000 at 4% fixed interest. If you make the minimum payment every month, it will take you another 4 years to pay off it off.

If you find a way to save $50 per month to put towards the loan, you can pay it off one year and five months sooner! (You can use a debt calculator to find out the actual debt pay off for your particular situation.)

In addition, you’ll save almost $200 in interest.

Plus, you’ll have freed up an extra $150 (minimum payment plus $50 extra payment) per month to pay off other debt, save for emergencies, or to help you become a stay at home mom.

How to Start Paying Off Debt…Even When You Have No Extra Money

Of course, those extra dollars have to come from somewhere. In my article, 97 Easy Ways to Save Money I shared some ideas that we used to start paying off our debt. In it, I also estimated the savings per month for each of the money saving strategies. They ranged anywhere from $4 per month up to several hundred.

Saving that extra $50 could be as easy as dining out one less meal per month. Or it could be one less trip to the salon.

Even if you’re already living on a bare bones budget like we were, you may be able to find ways to cut your budget for necessities like groceries and utilities (This is the simple system my family used to cut our grocery budget in half.)

You could also use lots of little money saving strategies that add up to $50 per month.

So if you’re like we were and resigned to the fact that you’d still be paying your student loans when your kids were in college, think again.

Try to stop focusing on the total you owe or past decisions you’ve made. Just start somewhere! Even a small additional payment each month can add up fast. After all, it’s only $50.

Are you trying to figure out how to start paying off debt? Have you become debt free already? Share your experience in the comments.

shannon Clark, LIFE & FINANCIAL Coach

As a mom, I know what it's like to feel exhausted, overwhelmed by life, and inadequate to meet my children's needs. But I also know you don't have to stay there.

As an author and coach, I've had the joy of encouraging more than 9.1 million moms to find forward motion with their faith, family, and finances — without the frenzy.

Will you be next?