How To Get Out Of Debt When You Are Broke: 9 Must-Know Tips

Knowing how to get out of debt when you are broke is the way to achieve financial freedom. When dealing with massive debt, you might’ve had moments where you thought to yourself, I am broke and depressed. In all honesty, plenty of people have been in your exact situation. Though getting out of debt may seem difficult, there are many creative ways to pay off debt.

If you don’t know how to get out of debt when you are broke, it can seem impossible to clear out all debt you may have.

When dealing with debt, paying it off starts with making a get out of debt plan.

A plan that includes how to get out of debt quickly so that you can reach financial freedom.

As someone who has heard a lot of getting out of debt stories, I know how much using healthy money habits can help someone get out of debt.

You are going to learn how to get out of debt when you are broke so that you no longer need to ask yourself, why am I in debt?

This post is all about how to get out of debt when you are broke to help easily achieve financial freedom.

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How To Get Out Of Debt When You Are Broke

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What Is The Most Common Cause Of Debt?

Those that are currently dealing with a lot of debt, especially for quite some time, will agree with what I’m about to say.

And that is, though it is easy to get into debt, it is a lot harder to get out of it.

That being said, there are definitely plenty of common causes of debt.

Here are just a few of them:

Paying bills late
Not living within your means
Overuse of credit cards
Using debt to pay for education
Not tracking your spending
Not knowing how to properly make a monthly budget
Using the wrong methods to pay off debt

Now that you know how to get into debt, you should also know of ways to get out of debt.

How Can Debt Affect Someone?

If you haven’t felt it already, the effects of debt can be very detrimental. Especially to your mental health.

In all honesty, I feel like many people don’t think about this often enough when it comes to debt.

When debt is a constant issue, it can cause depression, anxiety, and prolonged stress.

If you have ever felt any of these effects, then you know how difficult it can be to motivate yourself to keep pushing through.

However, I am here to tell you that with time, you will be able to clear all your debt.

And in the end, see that things do get better so that you can go back to focusing on your reasons to save money.

How To Get Out Of Debt When You’re Poor?

Currently sitting in your room thinking, I am in debt and have no money?

Wishing you knew how to pay off debt fast with low income so you can stop being broke in your 20s?

You are definitely not alone. I too have been in this situation dreaming of overcoming debt one day.

While being broke unemployed and in debt, I started to search for how to get out of debt fast with no money.

After some trial and error, I was able to figure out how to get out of a lot of debt using habits that wealthy people follow.

The tips below will show you how to get yourself out of debt. That way, you can go to sleep with one less financial burden to worry about.

1. Find Out Your Total Debt Amount

In order to know where to even start, you need to find out what your total debt amount currently is. This helps you see the big picture.

You can go about this by making a list. When doing this, make sure to have all of your bills on hand as well as all credit card statements.

When you don’t pay your bills on time, late fees and interest builds up over time.

Make sure to also include both of these on your list.

Once you know your total, you can then look for how to pay off debt in a year.

Even if you don’t make a lot of money, you will learn what to do when you are completely broke.

2. Shift Your Mindset

After knowing what your starting point is, it can be discouraging seeing the amount you owe.

You can of course mope around, however, this will not get you any where.

Instead, you need to accept reality for what it is. I know it sucks having to face reality, but sometimes you need to rip the band-aid off.

What I mean by this is, the debt you have is already there and you need to pay it off.

Shifting your mindset includes constantly reminding yourself that YOU CAN get rid of it all.

As you remind yourself of this, make sure to go full force. Going full force at all times will help you make the progress you seek.

Eventually, being able to see the light at the end of the tunnel.

Always remember that you can accomplish anything you set your mind to with hard work and consistency.

3. Use Debt Payoff Methods

When trying to pay off debt, it is important to select a method that is easy to follow.

Though many methods exist, one foolproof way to pay off debt is using the snowball method. The is also one of the easiest methods to follow.

With this method, you simply pay off your smallest debt balance first. You then tackle the next smallest debt and continue this until you pay it all off.

Another way to go about things is using the debt avalanche method.

If you don’t know what this is, it’s a method that focuses on paying off the balance with the highest interest rate first. Once done, you address the next highest interest rate balance.

Though both are helpful debt payment methods, they each have pros and cons.

To find out which of these two can show you how to be debt free fast, make sure to check out Debt Snowball vs Avalanche: Which Is Best For You To Use?

4. Start Making Extra Money

Sometimes, the amount of money you currently make is not always enough.

Paying for rent, utilities, groceries, your cell phone bill, your car payment and everything else can be a lot to handle.

So much so that it makes you wonder, can I get out of debt on my own?

When you’re in this situation, it’s difficult to put money aside that goes directly towards paying off your debt.

This is why it helps to find ways to make extra money. One way to do so is by starting a side hustle from home.

Doing so will help you easily generate more money on top of what you already make.

That way, you have plenty of money to put towards your debt and make a huge dent.

You can even choose to start a side hustle that makes passive income. These types of side hustles allow you to make money while you’re out with family or while you’re sleeping.

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5. Put Taking On New Debt On Hold

This is for all my people who use a credit card to make purchases when they don’t have money.

Money that you would’ve used to make the purchase if you had it on hand.

By continuing to do this, you find yourself facing more debt than you had originally.

Once you finally realize the total debt amount you owe, you will be dealing with a lot of financial stress.

Stress that can cause you to have many sleepless nights trying to figure out how to be debt free fast.

If you have a shopping addiction, make a list of all the common purchases you make.

Whether it be shoes, bags, clothing, or jewelry, include all of these in your list.

Then, label this list as things to stop buying in order to save money, as well as stay debt free for good.

Reminding yourself of this list should help you put new debt on hold so that you can focus on paying off the debt you already have.

6. Join Facebook Groups

Is Facebook still a thing? Even with all the social media platforms out there, Facebook is still indeed a thing.

Facebook is great to use because of the many groups you can join that deal with personal finance.

Included in these groups are ones that have members dedicated to helping others clear out debt. So that they can begin using clever ways to save money like a pro!

One of my personal favorites is Females & Finances.

In this group, women share their current debt situation looking for help. Within the comments, you will find women uplifting each other and providing tips to pay off debt.

There are even some who provide tips on how to get out of debt on a low income so that you can see it’s actually possible.

It’s also a great way to see that many people are in a similar situation as you. Which can help ease your mind and let you know that you are definitely not alone.

Think of it as a way to join a support group online for free.

7. Establish A Budget

I’ve talked about creating a budget plenty of times before so this tip may not come as a shocker.

Taking the time to understand the importance of budgeting and putting together a budget when tackling debt is very important. More so than you may think.

One budgeting tip to keep in mind is to make your budget as accurate as possible. This is to ensure that you will be successful when using it to address your debt.

As you’re putting things together, be aware of common budgeting mistakes and avoid them. At least, as much as possible.

By having a budget, you will be able to track every dollar that you make. It will also show you how much is left over after paying all your expenses.

Once you know how much is left over, you can begin planning how you will allocate these funds.

Keep in mind that the more of these funds you put towards your debt, the better.

8. Live Below Your Means

Since you want to put as much money towards your debt as possible, you’ll want to live below your means.

Don’t worry though, this does not have to be a permanent thing. You can live below your means temporarily until you clear out all debt.

Wondering, how do you live below your means? Here are just a couple of habits you can adopt in order to do so:

Quit eating out constantly
Use reusable products that save you money
Make your own coffee at home
Participate in free or low-cost activities
Have days where you spend no money at all
Watch free movies at home instead of going to the movie theater
Reduce your monthly bills such as your electric bill and water bill

All of these habits can individually help you save some money. However, when done together, these habits can help you easily save hundreds of dollars each month.

By now, you have probably guessed what to do with the money you will be saving.

That’s right, you will be putting all of this money towards your debt. Once you finish paying off your debt, you can loosen up a bit on these habits.

After all, you work hard for your money so you want to be able to spend it and treat yourself. In a responsible manner of course.

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9. Look Into Debt Consolidation

How does debt consolidation work? It is essentially merging all of the debt you currently have into one loan.

Just make sure to be aware of the many pros and cons when deciding to go this route.

On one hand, a debt consolidation loan will have a lower interest rate and reduce your monthly payment.

Since you will have a lower interest rate, this is where you will want to go full force and make huge payments.

That way, you can pay off your debt way earlier than you were anticipating.

On the other hand, if your credit score isn’t that great, you can get stuck with a high interest rate. This loan may also come with additional fees that cause you to spend more money than you need to.

Fees such as balance transfer fees and origination fees. There are also closing costs and annual fees to consider as well.

When should I consolidate my debt? In the end, if you’re able to get a low interest rate, then consider consolidating your debt and use it to your advantage.

This post was all about how to get out of debt when you are broke so that you can live a debt free life.

Now that you know how to get out of debt with no money, you can begin your path towards financial freedom.

By using these tips to get out of debt fast, you will clear your current debt in no time.

Once you’re no longer in debt, make sure to stay out of debt for good.

Always remember that although it is easy to get into debt, it is a lot more difficult to get out of it.

If you found even the tiniest bit of information from this post helpful, just know that it was made simply for you.

How To Get Out Of Debt When You Are Broke: 9 Must-Know Tips