How-to Pay Off Debt With The Income You Have?

When it comes to paying off debt many readers out there are interested in the following question:

How do I pay off debt with the income I have right now?

The reason that this question is so popular is because most personal finance advice suggests that you find a way to earn more money. While I myself am a firm believer in earning more money, I do understand why some readers want to figure out how to pay off their debt with the income that they currently have. Some of us simply don’t have the time to work more hours or want to figure out how to be savvy enough to survive on one income.

Let’s look at some ways you can pay off debt with the income you have:

Delay your spending.

Whenever I need to save money hardcore style I start to delay spending in certain areas. I will get my hair cut less frequently or eat out less often. Is there any spending or a specific purchase that you can delay? Can you delay that car purchase a few months? Perhaps you could post-pone that tropical vacation until you manage to pay off more of your debt? All that I’m saying is that sometimes you might have to delay spending if you want to pay off your debt with the income that you currently earn.

Cut out just one thing.

I don’t want you to live a miserable life where you stay home and play board games all day. Anyone that suggests this needs to wake up and start living in the real world. I just think that you can easily find one thing to cut from your spending routine. I know that if I ever needed to aggressively pay off debt I would stop driving or downgrade my cell phone package. The thing is that often we have money that we can pull out of our current financial situations. We all have routines and purchases that could be cut when paying off debt becomes a priority.

Stop using your credit cards.

Once you see your debt going down, the temptation creeps up again to start spending to reward yourself for your effort. That’s the major problem. You need to find a way to stop using your credit card for useless purchases when you’re trying to pay off your debt. How you do this is up to you. You can try freezing your credit card or giving to a relative that you trust to hold. As long as you don’t cancel your credit card. This is a short-sighted solution and it could damage your credit score. If you want to use your current income to pay off your debt, then you need to get serious about not using your credit cards.

How did the readers get out of debt quickly?

I asked you guys to see how you got out of debt quickly or how you plan for purchases. I wanted to share the one of the responses here.

Kristy chimed in on saving money:

One that really works for me is keeping a picture of something I want to buy in my wallet. Right now, my debit card has a picture of a car I’d really like to buy on it, so whenever I pull it out I see that car! It’s stopped me from several spending sprees haha.

Another thing I’ve learned to do is to write what I want down in a text document or a notebook (whichever is more convenient), then forget about it and distract myself for awhile. Then I go back and look at what I’ve written down and ask myself if I really want to make the purchase. If I do, then I’ll add a plan of how I’m going to save up for it rather than running out and buying it right then.

Have you guys had any luck with paying off debt the income you already have?

8 thoughts on “How-to Pay Off Debt With The Income You Have?”

  1. One that really works for me is keeping a picture of something I want to buy in my wallet. Right now, my debit card has a picture of a car I’d really like to buy on it, so whenever I pull it out I see that car! It’s stopped me from several spending sprees haha.

    Another thing I’ve learned to do is to write what I want down in a text document or a notebook (whichever is more convenient), then forget about it and distract myself for awhile. Then I go back and look at what I’ve written down and ask myself if I really want to make the purchase. If I do, then I’ll add a plan of how I’m going to save up for it rather than running out and buying it right then.

    1. i start a change fund. For example: I really want this winter coat but it’s out of my budget currently, and this is a want not a need. it’s equal to half my months food budget, i have a full family so this is a large expense for me. i started looking around for all my change, i NEVER spend my change, i save it up for things like this when i want something i dont need. i printed out a picture of the coat, put it on a jar and added all the change i’d saved up. if i can save up half of the expense with change alone i’ll buy it. i also stop and before i buy it review, do i still want this? sometimes i’ll set a buget for a purchase i want. like a new phone. if u buy with out upgrade price, it’s rather expensive. heck even with upgrade price new phones are expensive. so i look at when i want to buy it. say …. 3 months from now. that’s 6 pay checks from now. if the phone was $400, i’d have to set aside $67 each check to afford the phone. this also helps to put in perspective, can i really afford it? if you can’t afford to set aside $67 every pay check then either you cannot afford it, or you need to set your purchase date farther away. if you can wait 6months to get that new phone, you’d only have to set aside $34 per pay check…

  2. Broke by Choice

    In addition to Tiffany’s recommendation..I would make automatic payments to your debt for the amount saved.

    For example: I lowered my gym membership from $21.96 to $10.85 per month. The difference is $11.10, so I set up an automatic recurring bill payment to my student loan company. This keeps me from putting it back in the pot and spending in on something else.

    I have done this for many things and my automatic recurring payments to my student loan each month is going to be…$882.61, which is 497.05 over the minimum payment. The little things really do start to add up.

  3. I switched to the Envelope budget system this month and after less than a week sticking to it, I cut my expenses down in all my cash categories for next month. Because of these cuts, and of course not using my debit card and sticking to the cash in each envelopes, I can throw an additional $200 a month at my debt that I’ve previously been spending.
    Also, by using cash, I spend less because I actually see the money leaving my hand, instead of some imaginary number leaving my bank statement. At the end of the month, whatever money I have left over in each monthly category, I will put towards my debt. I also have a few categories that can roll-over so that I can save, in cash, for larger expenses in those categories. By sacrificing something small one month, and saving the cash, I can save for something larger in another month.
    This whole system reminds me of how I used to be as a kid with my allowance. I was the Bank of Becca with my older siblings because I never spent my money. I want to get back there, instead of being a slave to my debt.

      1. Actually, I sort of am. I have a envelope for gifts & one for my personal care like haircuts, eyebrow maintenance, makeup, etc, and both of those roll-over into the next month. I’m trying to make sure I have enough money in my “Gifts” envelope to purchase the materials to make Christmas gifts so I’m cutting down on the small gifts I tend to give every month. I also have particular hair and my haircuts are $70 dollars, so I’m saving up my personal care budget for a haircut in a few months. They might not sound like splurges, but because I’m trying to pay down my debt, and not spending, at this point in my financial life, they really are. Once I bring my debt down another 50%, I’m planning on putting more money into savings for trips, toys, and the like.

        1. Wow I’m impressed with your plan. What kind of Christmas gifts are you planning on making? (that’s so cool btw).

          I like your strategy of earning your freedom. Once you pay down your debt you’ll have much less stress and more freedom to do the things that you want to do (as you mentioned trips and toys).

          1. Thanks. It’s not always easy sticking to a budget when everyone is out spending money, but I don’t want to be in debt, so I figure a little torture now will benefit me in the future when I’ll be able to spend from my bank account, and not put “it” on my credit card (or put it on my credit card for points, miles, etc and pay it off in full without interest at the end of the month).

            I’m making a tent for my niece and my boyfriend’s god-daughter ($20 for all the materials for both), handbags for my sisters (free, I already have material my mom gave me), babysitting coupon’s for my brother & sister-in-law (free, printer paper, markers, and a little creativity). I haven’t quite figured out what I’ll do for my parents or grandmother’s yet, but I’m sure they will be handmade also.

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