Many families today need to have one parent at home with their kids, which means they have to cut luxuries and figure out how to live on just person’s salary. That may sound easy but it can be quite challenging at times. When you already have debt, it’s even harder! But while it may be harder to pay off debt on one income, it’s certainly not impossible. Like they say, “where there’s a will, there’s a way.”
5 Ways to Pay off Debt on One Income
Save Like Crazy
The truth is, once you’re relying solely on one income, it’s much, much harder to save any money, let alone pay off any debts. If you can, start saving money as soon as you know that you’ll be living on one income. For instance, if you just found out you’re pregnant and you want to be a stay-at-home mom, NOW is the time to start saving. You have 9 months to pay off your debts and build a savings account. Use this time wisely.
If you’re already living on one income, look for ways to save extra money. That may mean lowering your monthly grocery budget or figuring out how to spend less on your kids’ clothes each year. Either way, find a way to save money that works for your family.
Use a Calculator
There are hundreds of useful money calculators available for you to use for free so start using them today! One of my favorites is the “Early Mortgage Payoff” calculator. Using it, I can easily see how much making an extra payment every year helps me to pay off my debt faster.
All you need to do is enter your current balance, your interest rate, monthly payment and when you would like to have your loan payed off. The calculator does all the rest!
And trust me, seeing how an extra payment here or there helps you pay off your debts faster is incredibly motivating!
Learn to Spend Wisely
Here’s the truth: we only have so much money and if we plan to pay of debt on one income, we have to make our money work for us. That means we need to figure out what our priorities are and make our money work towards our priorities.
I love taking vacations and making memories with my kiddos, so that is one of my biggest priorities. I save all year to make sure I have enough money for a vacation. And we take some pretty awesome vacations but they are all SUPER cheap!
We stay in shady hotels, find free or cheap things to do and see, and make sure we pack all the essentials so we aren’t paying “gas station prices” for things like sunglasses. But my biggest trick to making travel easier is to eat cheap. That means we stay at hotels with continental breakfasts. We pack snacks from home. Instead of going out for expensive dinners, we opt to eat lunch out since it’s generally cheaper. And we pack plenty of peanut butter and jelly sandwiches.
Yep, on our fancy-schmancy vacations, we eat PB& J almost every single day. WHY? Because it’s cheap and it all turns into poo in the long run anyways! I’d rather spend our vacation money on experiences than going to Olive Garden for dinner.
Lower Your Expectations
Let’s be honest: If you really want to pay off debt on one income, you’re going to have to lower your expectations. That means, instead of going out for a fancy steak dinner, you buy a pack of steaks and grill them at home. Instead of owning 12 pair of shoes, you stick with 3 or 4. You will have to give up a lot of things to live on one income, but if you lower your expectations, it won’t be that hard!
Ditch the Extras
When we decided to pay off all of our debts, one of the first things to go was our Satellite TV. It was costing up over $100 a month and it simply wasn’t a priority. Recently, though, I realized that we were paying for Netflix, Amazon Prime, Hulu, Disney Plus and Curiosity Stream!
We had slowly added these streaming services because they each had one or two shows that we each liked. And, while they are only about $10 each per month, that really starts to add up!
So, we kept our Amazon subscription and our super cheap annual Curiosity Stream subscription and kicked the others to the curb! Now we’re saving about $30 each month. It may not seem like a lot but that’s $360 a year! Heck, that’s enough to do my Christmas shopping with each year!
Little changes like this make it much easier to pay off debt on one income!
No one ever said being financial responsible is easy but it’s worth the hard work to have peace of mind. Yes, it is definitely a struggle to pay off debt on one income but think of all the things you’ll gain!