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How to Pay Off Debt When You Are Broke



It pains me to admit that I’m very acquainted with the experience of being broke. In fact, being broke and in debt was so exhausting to me that it motivated the start of my debt-freedom journey. A journey that I didn’t know at the time would take years to complete.

I’m a few months away from no longer owing unsecured debt like credit cards and only owing on my student loans. And, I thought this post would be an excellent opportunity to share some of the lessons I learned about paying off debt while being broke. Hopefully, this will encourage readers who are either at the beginning of their debt-freedom journey or are currently dealing with a bump in the road financially.

Making debt repayment a priority

Paying off debt has to become a priority — even though you’re broke. It’s hard to focus when you’re broke because surviving is your initial priority. But, once you decide that debt repayment will play a role in what you’re doing financially, that sense of purpose will drive your financial actions moving forward.

I reached a breaking point where I was just tired of owing money to other people and I just wanted those extra people, and business entities out of my life. The constant phone calls, emails, and letters drove me crazy. But, the reality was that I could only focus on one thing at a time, and so that’s what I did.

So, I sat down and made a list of my bills from smallest to the largest amount and then looked at which bills were the most urgent and which bills I had to get out of my life as soon as possible. Once that was done, I focused on one thing.

Just one thing.

After creating a basic strategy for debt repayment, the next area of focus was to earn more money. Around this time  I had a conversation with my friend Kara Perez, from and she said the following “You can’t out-frugal your debt” her observation about money really resonated with me, especially because she had paid off over $25,000 while earning an incredibly low yearly wage. She was referencing her own debt-freedom journey while being broke and how eventually you just have to earn more in order to gain traction in your debt fight. Her comment continues to resonate with me because I had made that mistake.

I was painfully frugal because I was broke. But, like many people, I missed the memo on the importance of earning more money. My habit of being thrifty was a great habit to have, but thriftiness while broke and in debt was only going to move the financial needle so far.

Make more money

It was time to begin side-hustling. In fact, I found side-hustling to be a very empowering process in my debt payoff journey. But,  earning more money also highlighted terrible financial habits that I was oblivious to because surviving financially left me very little time for deep introspection.

I was mentally and emotionally tired.

Emotional spending was a problem that I didn’t realize I had, and every time I earned more money during this stressful time I wondered where all of my money went? I was using my credit cards because I couldn’t, I was paying on my debt, but it felt like my debt-load was still growing.

Managing my mindset became the most critical part of paying off debt when broke. Finally, after realizing that every time I ran to the mall to shop while depressed was because I was broke. And it was going to keep me in the same financial situation. That realization created a huge shift in my journey.  Becoming financially self-aware and relearning my financial habits was the most important financial skill set that any person looking to pay off debt while broke should develop.

The logistics

Now, to the more practical parts of debt repayment while being broke. You’ve created a comprehensive list of your financial priorities and know where you stand. Begin having conversations with your creditors and see if you can negotiate:

  • A lower interest rate — it’s hard to gain traction with payments if your interest rates are so high that you can’t build momentum towards paying your balance down.
  • Work on a payment plan that puts YOU first. In the past, I would always agree to negotiate terms that favored the company that I owed versus figuring out a payment plan that I could stick with and would benefit me in the long run.
  • Earn more — as mentioned before, it’s difficult to out-frugal your debt. Focus on earning more money with a side-hustle or changing your job. And, when you’re changing your job build in a raise by looking for a job that pays you more.
  • Get in the habit of making payments — no matter how small. Make paying on your debt a part of building discipline financially.

Finally, be kind to yourself. It’s cliche to say this but, your debt-repayment journey is a marathon, not a sprint. Currently, I’m working on the final $5,000 of my unsecured debt. It has taken a long time to get to this point, and I’ve learned a lot about myself along the way.

Unfortunately, I still have student loans, but I will only have one significant debt left to pay. And, I can use all of the hard-learned skills to kick that debt to the curb. I can’t wait!

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