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A reader has some debt, but no savings. Thankfully, he has several excellent options.

Question: I don’t have a lot of debt, but I also don’t have a lot of money. I think I got $5,000 I’m carrying on a couple of credit cards. I also got $12,000 in student loans to go. My car is paid for, and I live at home with my parents until I can figure out how to live on my own. My job is steady, and it has decent benefits, but it pays only $22,000 a year. How do I save money and stop living paycheck to paycheck?

— Anthony in Georgia

How Do I Stop Living Paycheck to Paycheck

How do I stop living paycheck to paycheck? A reader has some debt but no savings. Thankfully he has several excellent options. If you feel like your financial life is a hamster wheel it’s time to stop running in circles.

The best way to stop living paycheck to paycheck is start living dollar to dollar. The best thing you can do is also the easiest. can show you how to create a budget that will show you exactly where your money goes. The results will probably surprise you.

Yes, I know making a budget isn’t high on anyone’s list of having fun, but it’s also very important. It also doesn’t take too long, so do it now, can show you how. Once you create a budget you can consult a professional. It’s called credit counseling and believe it or not it’s absolutely free.

A certified credit counselor will review your finances with you once completed. You’ll have a clearer idea of what you can do to stop living paycheck to paycheck.

It might include signing up for programs that can reduce your student loan payments or other programs that can manage your credit card debt but you won’t know about that until you know about yourself first.

So, make that budget!

Howard Dvorkin answers…

First of all, allow me to reminisce for a moment. Back when I began my career as a financial counselor in the 1990s, $5,000 was considered a significant credit card balance, and $12,000 in student loan debt was still a rarity.

Times have certainly changed. The average credit card debt by household in this country is more than $16,000, reports. The average student loan debt is more than $50,000.

So according to these statistics, you’re right, Anthony. You don’t have “a lot of debt.” However, as you’re learning, any debt is a drag — not only on your current financial situation, but you’re future one, too.

Even worse, when you earn very little, the interest rates on your debts chew up a bigger percentage of your income. So the first step is curtailing some of those interest rates.

To accomplish that, try these three options and in this order…

1. Make a budget and stay within it

Anthony, you say you think you have $5,000 of credit card debt. You need to know. The best way to do that: Create a budget. Yes, it’s as boring as it sounds. It’s also as important as it sounds. Read How to Create a Budget and Stick to it.

2. Cut what you can

Now that you know what you bring in and where it all goes, you can intelligently look for ways to save. Shaving a few dollars off a workweek worth of coffee doesn’t seem like much, but once you have a budget and can note how it adds up, you’ll be motivated to do more. It’s akin to dieting: Every calorie counts.

3. Get a professional assessment

If you’ve read before, you know I’m a huge proponent of credit counseling — and why not? It’s free. A certified credit counselor calls you and conducts a financial assessment right on the phone. From there, you can make informed decisions about your finances. Learn more about free credit counseling services.

These three options are just the beginning, Anthony. If you start here, you’ll quickly learn advanced techniques that will save you even more — like how to reduce your student loan payments. First things first, however. Start here, do well, and I can promise you that financial freedom is attainable.

Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

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Meet the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

CPA and Chairman

Dvorkin is the author of Credit Hell and Power Up and Chairman of

Ask the Expert, budgeting, eliminate debt, interest rates, save money, student loans

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