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How to Get out of Debt when you have NO Money

Mike about Money | No Money out of Debt

Getting out of debt when you have no extra money or steady income is very tough. And it will likely take you longer to get out of debt so you must have patience and discipline in order to keep moving toward your goal of being debt free. If you get weak and slip on the way to being debt free, you will set back your plan so I can't stress enough the importance of being diligent in working your Get out of Debt Plan. 

"What get out of debt plan?" you ask. Well, that is the first step right after step one, deciding that you really want to be out of Debt. Everyone says they want to get out of debt but when it comes down to it, are you really willing to do what it takes to put an end to your debt once and for all. Not everyone is willing to do what is necessary. There are no quick fixes for debt problems. To truly become debt free takes a systematic plan and dogged determination to win. If you want to win, and focus like a laser beam on your goal, you can succeed. 

Do you really want to be Debt Free? If you are truly honest and the answer is a resounding "YES!" Let's get to work. If you are not sure, go back over your bills and give it some more thought. A few more sleepless nights worrying about how you are going to keep your home from being foreclosed, your car from being repossessed and food on your table, should convince you that you need help, you need a plan and you want to be out of debt. 

For those of you who are ready to start reducing debt today, welcome to the first day of your Debt Free Future!! I'm so glad you decided to join us.

If you read my book, Spend Your Way to Wealth, you know that the first thing you must do is go over your finances and create a listing of all of your expenses. All of them on a monthly basis so you have an actual and true accounting of where every penny is going each month. We spend money 24 hours a day so it is crucial to take charge of our expenses and account for them. Many families that I've helped over the years have found money "leaking" out of their bank accounts for things they didn't even know they were spending money on. Don't let that be you anymore. Get a handle on all expenses, then we can start to work on decreasing expenses. Here are some ways to begin to decrease expenses:

Spend less on food

  • Cook at home instead of eating out
  • Cook from scratch rather than eating pre-made dinners
  • Eat less meat and dairy products! Not only are meat and dairy expensive, often the most expensive part of the trip to the grocery store, but they are less healthy and lead to a variety of illnesses.  
  • Take your lunch to work
  • Grocery shop with a list and stick to it
  • Don't shop while you're hungry, you're prone to overbuy
  • Use coupons, but only for items you'd buy anyway
  • Start a container garden
  • Buy store brands
  • Use leftovers to make new meals, or just eat leftovers
  • Freeze excess foods, like Thanksgiving leftovers or extra spaghetti sauce, to eat another day
  • Let your kids pack their lunch as often as possible
  • When you dine out, get water instead of soda
  • Avoid buying non-grocery items at the grocery store where they tend to cost more
  • Read circulars or check online to see when things are on sale
  • Ditch Starbucks and make your own coffee. Or drink the coffee at work.
  • Use reusable grocery bags and shop at stores that give you a discount for doing so.
  • Pack food for road trips rather than stopping at fast food restaurants - It's cheaper and healthier
  • Avoid impulse buys at the cash register

Travel for less

  • Cut your transportation costs by car pooling, walking or biking if possible.
  • Buy regular gas for your car. Unless you drive a high performance vehicle that requires High Octane gasoline, buy regular. If you do drive a high performance (expensive) vehicle, see how soon you can sell it because if you are in debt, you don't need to be driving an expensive, high performance vehicle. 
  • Get your car serviced regularly to optimize gas mileage
  • Run all your errands in a single trip
  • Avoid unnecessary driving
  • Trade a large SUV for a cheaper, more gas-friendly car
  • Ask your employer if they will allow you to work from home a few days a week
  • Do price comparison on major repairs, especially with dealership quotes
  • Make sure you have the lowest possible insurance rate - get new quotes every year
  • Increasing your insurance deductible will often decrease your rate - ask your Insurance Agent for a new quote
  • Avoid getting any new tickets or have any accidents and your insurance rate should go down

Spend less on clothes

  • Forget about designer labels
  • Get trend-proof clothes
  • Wear layers in the winter instead of buying new sweaters
  • Don't forget sales racks, thrift, and consignment stores
  • Launder your clothes appropriately to get longer wear
  • Avoid dry clean only labels (to save on dry cleaning) - By the way, if you have a job that requires you to work with the public and look your best, you may need to use a dry cleaner. Remember, our goal is to get out of debt. Your job is your best bet for paying off debt. If you excel at work, you can get promoted and get a raise which will help you pay off your debts more quickly. I don't suggest that you go cheap on your attire for work. If you look cheap and worn out like an old suit, your employer may treat you that way. 
  • Learn to sew - you can update old clothes, alter ill-fitting clothes, and repair holes to make your clothes last longer
  • Buy clothes at the end of the season when they're on sale
  • Buy versatile clothing that can function in several different outfits

Entertain your family for less

  • Cancel monthly movie subscriptions like Netflix or share these services with a friend or roommate.
  • Exchange movies with friends instead of renting
  • Rent movies for $1 a night from Redbox 
  • Check out DVDs from the library
  • Cut the cord on expensive Cable. Thanks to technology from Roku and Apple TV, etc., it is truly possible to eliminate Cable TV. You still need internet service but I can tell you that with Roku or Apple TV, you can cut $100 or more a month on your TV bill and still watch nearly all of your favorite shows and TV stations. 
  • Buy your modem instead of renting from the service provider
  • Catch a matinee when movie prices are a few dollars cheaper. Check for a dollar cinema in your area. They play the films that are no longer in the theater but haven't been released on DVD.
  • For Books, use the library instead of buying new books
  • Use free music listening services like Pandora or Spotify, or listen to free Podcasts or the good old radio, rather than buying music or subscribing to music listening services. Hearing a few commercials between songs won't kill you.
  • Have game night with family and friends to save money - it's usually much more fun anyway.

Lower your housing costs

  • Move to an apartment with lower rent 
  • Refinance your mortgage for a lower interest rate
  • Get a roommate (or two)
  • Do your own home repairs
  • Do your own lawn maintenance and landscaping

Lower your phone bill(s)

  • Use your cell phone as your primary phone. Get rid of the landline.
  • Bundle your phone (if you keep it) with your cable and internet - always ask for a promotional rates
  • Research less expensive Cellular rate plans from your provider and others constantly. Prices and plans in the mobile phone business are changing monthly due to demand and competition. Most providers now will pay you to switch from another carrier. Just try to avoid any long-term contracts.
  • Turn off unnecessary features, even if you have to talk or text less
  • Stick with the preinstalled ringtones instead of purchasing new ones
  • Only download free apps and beware apps that have in-app purchases

Lower your utility bills

Use less water and electricity - Check your monthly spending on each of these and set a goal to lower the cost each month.

  • Re-evaluate luxury services
  • Can you wash your own car?
  • Can you mow your own lawn?
  • Paint your own nails vs. paying for a manicure
  • Cut out visits to the spa
  • Take a staycation instead of a vacation
  • Cancel the gym membership. Use fitness DVDs and at-home workout routines. Ask about cancellation fees first. It may cost more to cancel than to keep the membership and when you are in debt, it is important to continue to exercise to help reduce stress and stay healthy.

Banking and Finances

  • Don't pay late fees. Make sure to pay all your bills on time!
  • Avoid bank overdrafts or insufficient funds fees. Always check your account balance if you're unsure whether you have enough money to cover a transaction.
  • Ask your bank how you have any monthly fees waived. Switch accounts/banks if necessary.

Use your bank's ATM to avoid paying additional fees. Or, make a small purchase inside a store and choose the cash back option.

  • Make a budget or spending plan and stick to it
  • Use expense tracking to figure out where you're spending the most money
  • Cancel subscriptions and other recurring charges

Increase Your Income

  • Pay the right amount of taxes, tweak your tax withholding if necessary
  • Optimize your benefits, by making sure you're getting the best benefits from your job
  • Ask for a pay raise, here's how to do it
  • Work some overtime hours
  • Get a second job
  • Make money from a hobby
  • Sell your arts and crafts on Etsy
  • Check to see if you have unclaimed money, but watch out for scams
  • Start a tutoring business
  • Play an instrument? Give weekly lessons
  • Get rid of unwanted or unneeded household items
  • How to Have a Garage Sale
  • Successful Selling on eBay
  • Sell old books to a store like Half-Price Books
  • Sell old CDs using a website like SecondSpin.com
  • Sell old clothes to consignment
  • Pawn electronics