Are you like many out there asking yourself How to Pay off Debt When You Have No Extra Money? Unfortunately, many of us are struggling daily with just making ends meet let alone paying down debt. There are actionable things you can do to create a better life for yourself by removing debt. Below, I will share some of these tips and help you see that there is a light at the end of the tunnel.
How to Pay off Debt When You Have No Extra Money
You have probably already looked at our tips on how to begin couponing to save money. Extreme couponing is a great way to really cut back on your day to day expenses, but that doesn’t always equal paying off debt. Knowing how to pay off debt isn’t just about saving money at the grocery store. It’s also about how to use those savings.
Many families use couponing just to manage to put food on the table. If you are living paycheck to paycheck like many others, then you know that there just isn’t much leftover. Below are my tips for how to pay off debt when there just isn’t much or any extra money at the end of the paycheck.
Negotiate with creditors
If you currently have credit card debt, you may want to consider giving them a call. One of the things that many individuals don’t realize is that most creditors want to work with you to get your debt under control. There are tons of options available, but you have to make the effort to work with them.
Some of the options you may find associated with a credit card company debt:
- Take advantage of credit card insurance that allows you to stop making payments for a select time period when you are unemployed. If you have added the insurance to your card when you signed up, it will take over payments sometimes for up to 18 months. Just give your credit card company a call to see if this is an option.
- Negotiate interest rates if you have always been on time with making payments. This is usually available if you have an older account in good standing with regular payments. Lower interest rates sometimes come with higher monthly payments, but not always. Ask before you cross this off your list.
- Close an account and halt interest. This is something I don’t recommend unless you are severely in over your head. Closing an account can ding your credit report in a negative light. However, if you are struggling and trying to avoid bankruptcy, this is a better choice for you in the long term. By closing the account, you won’t be able to use credit as you pay it down, but you may be able to lower or even halt interest from racking up for a set time period.
- Work with collections for a lower monthly payment. Sometimes, things get sent to collections. It’s not easy to admit, but it happens. If that has happened, don’t stress about the demands for a full upfront payment. Instead, call and be honest. Talk to the creditor about setting up a low monthly payment that is doable in your current budget.
Start selling everything you can
This is another somewhat hard pill to swallow. Most people don’t want to think about selling off their possessions, but when the going gets tough, it’s time to take that leap. If you have something of value, now is the time to purge.
Let me preface this with the fact that I realize not everyone has something to sell. Stripping your home of everything isn’t the solution. The solution comes in getting rid of unnecessary things that are of value. This can be a temporary solution that helps you get back on your feet. Don’t write this off right away. You may be missing out on a few hidden gems in your home worth money.
- Reduce electronic clutter. If you have multiple televisions, video games, gaming systems, DVD’s, CD’s, Vinyl Records, or old cellular phones it is time to reduce your clutter. Even the oldest of these can be sold in a local swap shop group on Facebook, on Craigslist, or potentially on eBay. You can even sell things like old laptops for parts if they aren’t functional.
- Purge the closet. Many families find that going through their closets and creating a capsule wardrobe with limited pieces is a must. Go through every closet and purge down to just basics for one week of wear. Take the remaining clothing, and sell.
- Clean out your kitchen cupboards. One thing many of us do is hoard kitchen appliances, plates, and utensils. You’d be surprised at how many of these things can be removed from the kitchen and you never even notice. Selling these items can bring in a lot of extra income.
- Sell your furniture. Okay, so it sounds drastic, but it really isn’t. If you have a home with a lot of extra furniture in guest rooms, basements, dens, and kids rooms, then start purging. It can be replaced later when you have finances under control. In the meantime, sell that extra couch in the basement for $50. Take the kids old bedding, wash it, and bag it up for $10 a set. There are tons of options that leave you with your family still with furniture.
- Purge home decor. Whether it is the holiday decor items or the extra set of mirrors in the hallway, these will sell. A few dollars here and there add up fast to pay off a bill or make a monthly payment toward a credit card.
Ask family for a loan
Nobody wants to think of this as an option, but it is one you should consider. If you are in a desperate situation and are facing something like bankruptcy or even eviction, don’t hesitate to look to family or friends for a temporary loan. Just remember that if you do this, you are responsible for paying it back. If you’re facing eviction, read this to understand your local eviction laws.
The benefit to this is that you pay off an immediate urgent debt and are given a bit more reasonable time period to pay off the debt. Friends and family also tend to give you a longer payback period with lower interest rates. Again, this is not something you want to do, but it is an option worth considering.
Look for extra work on the side
I realize this is an obvious solution and many may already be working toward this goal. It is still a must for the list. A side job, side hustle, or extra source of income is ultimately the way to go. We have an entire amazing category of opportunities to earn money that you can check out on the site for ideas.
Looking for side work is obvious, but we sometimes just need a little extra boost to remind us to keep looking. There are tons of great ideas out there for side jobs that anyone can do for a few extra dollars per week. Those $5, $10, $20 side jobs add up. Whether you walk the neighbor’s dog for gas money or you bake homemade cookies to sell around the holidays, every dime adds up to help pay down your debt.