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Getting Out Of Debt On A Small Budget

My good friend offered me this timely article. I thought it was a perfect addition to my blog for the New Year when so many are low on funds (and those credit cards grew over the holidays). 


Getting Out Of Debt On A Small Budget

If you gave up a corporate career or any decent job for that matter to stay home and raise your kids, money is a lot tighter than it used to be. Even if you are working from home, chances are you are not getting the same paychecks you did BK (before kids). Of course it is worth it to be able to raise your kids yourself, but it can make getting out of debt a bit of a challenge since you are working with a much smaller budget. That doesn’t mean it’s impossible though. Here are some tips to help you get out of debt on a small budget.

Don’t Dig Yourself In Further

When you are on a small budget it’s so easy to just charge an unexpected expense to the credit card. There always seems to be something that needs to be fixed, renewed or paid. When you are trying to get out of debt, it is important to work first on making sure you don’t dig yourself in deeper. Put those credit cards aside; in fact close all of them but one if you can. A credit card should only be used in one of two ways:

  1. To make secure online payments, but only if you know you can pay it off as soon as the credit card bill comes in.
  2. For absolute emergencies. This may include an unexpected hospital stay, a new furnace to keep you warm in the winter or repairing your car.

Before any purchase you should ask yourself: Can I really afford this? Do I really need this? For larger purchases, force yourself to think it over for a day or two. You’ll be surprised how often you realize you don’t really want/need the product and can happily live without it.

Every Little Bit Helps

When you are looking at that large credit card bill coming in every month, it may  seem like $20 extra don’t seem like hardly anything. It is important to remember that every little bit helps – whether it’s paying an extra $20 toward getting that credit card paid off, or paying an extra $10 on your house loan. Even doing something small like this every month will make a huge difference over the years. Make it a habit to pay a little extra every month and your debts will be paid off years earlier saving you hundreds, if not thousands of dollars in interest.

Pay Yourself First

Do you ever notice that no matter how much money you have to work with in a given month, it always seems to be gone around the 30th? That’s why it is important that you pay yourself first. What this means is that every month, as the money comes in set some aside to pay off your credit card. Even better, go ahead and send the check to the credit card company right then.

Take these three tips to heart and you will be amazed how quickly you can pay of your debt even on a small budget. The key is to consistently do something each and every month to lower the amount of money you owe. With that you can get out of debt, no matter how small the budget is you are working with.

To learn more about making a family budget and getting out of debt, visit and sign up for our free budget newsletter.


Of course, the other way to get rid of your credit card is to MAKE MORE MONEY! 🙂 So, if you need ways to do just that, see Home-based Business Ideas

I hope 2007 is the year where you can kiss those credit card bills GOOD BYE!


I appreciate shares and I adore comments! Please share your thoughts.

  • Lisa Guarino

    Hi Nicole

    Great article.

    I’d like to add a tip of my own.

    If you use cash more often you’ll always find you get change back. Use that change. Set aside a can with a lid and when you have change add it to the can. It Does add up. I’ve been doing this for years, even before kids. On rainy or cold days I take the can and roll coins. You’d be surprised how much money you have to add to that bank account to help with bills.

    Best to you

    Lisa G.

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