Helpful Guide to Teach You How to Pay Off Debt Without Any Money

Receive inspirational content in your inbox

Our purpose is to help you improve your life.  We frequently team up with companies to bring you the best products, resources and information.  This partnership is presented to you in the form of affiliate links that we may receive a small commission on your purchase at no cost to you. Find out more on how we make money.

Paying off debt without any money sounds impossible.  We are here to let you know, through our experience, it is possible.  We are here to help you make the impossible, possible.

To help you pay off your debt with no money, we will take a holistic approach to help you to think through your money woes so that you know how you got here, what you need to get outta here, and what you need to do to never get here again!

We are going to help you find a permanent debt solution, by facing the cause of your money problems.  Debt is not a financial problem; it is a personal problem that impacts our financial health.

So many people, including us, have experienced recurring problems with debt.  In the past, we always looked outward for a financial solution.  It wasn’t until we realized that we had an unhealthy relationship with money, that we were we able to face our daemons and overcome our lousy behavior.

Here are a few of the pressing questions we will cover:

  • What do I need to do to get out of debt?
  • Should I pay off my debt or should I save money?
  • How do I get out of debt with no money and bad credit?
  • What do you do once you are debt free?

Pay Off Your Debt with No Money Plan

We all need help sometimes.  When you are living paycheck to paycheck, being able to pay off your debt may not even be on your radar.

That is where we were in 2017.  Rob and I spent every cent we had before we had it.  The crazy thing about the way that we were managing our money is we were unaware we were in the paycheck to paycheck cycle.

In this article, we will help you with ideas to help you pay off your debt when you have no money.  Just like we did…twice!

After paying off $50,000 worth of debt in 2018, we realized the true depths of our dysfunctional relationship with our money.

After overcoming a mountain of debt, we realized that we were self-sabotaging our finances.

We realized that the reason we found ourselves in debt was our false narrative that we were good at managing our money.

We never carried credit card debt, we deposited money into our savings accounts, and we have maintained a credit score in the 800 range for years.

It wasn’t until we woke up one day and realized we were broke.  We were living paycheck to paycheck due to our poor decisions with our money.

It was at that moment that we knew that we needed to make some serious changes.  This post is based on our experiences and the research that we had to do when we were on our journey.

Getting out of Debt – More on Our Story

Before we get into all of the ins and outs of paying off debt, you need to take a moment and think about the time that it has taken for you to get to this point financially and what decisions that you have made, or not made, that have led you to this point.

The point that I am referring to is the point that you have to read my article.

You see, Rob and I had to do this twice.  Yep, now the whole truth comes out.

In 2004 we were pretty much a one-income family.  Rob worked full-time, plus a ton of overtime.  I worked part-time and brought in a little money here and there.  Together, our income was maybe $65,000 a year.

[Looking back, I think we thought we were rich. 😊]

Related:  Pay Off Debt Fast | 11 Things We Did to Pay Off $50,000 6 Months

Living Beyond Our Means

I drove a 2003 Chevy Silverado.  Then in March of 2004, Rob purchased his first brand new car.  September that same year I decided I hated the color of “my truck” and I needed a crew cab pickup verses and extended cab.  Since I “needed one,” I got one.

There we were.  Young and dumb with over $50,000 worth of automobile loans and without a care in the world.  Our consumer debt was almost equivalent to our annual income.

It is strange looking back because I honestly do not recall ever being afraid of our financial situation.  We just paid bills.  We paid a lot of bills.

In 2005 both of our children were in school, and I was going stir crazy, so I decided to go to work full-time.

I started in the mailroom of our local electric cooperative, and within six months I applied for and was awarded a position in the company that doubled my income.

Although I do not remember having fear about our debt, I will never forget the moment in which I received that job offer.  I am in no way a crybaby, but I can tell you this, my eyes were leaking as the sense of joy and accomplishment overcame me.  I doubled my salary!

A man in debt is so far a slave. Ralph Waldo Emerson

Increasing Our income and Paying Off Our Debt

With this influx of cash, we decide to live off one income and pay off those ugly auto loans.  In 2007, we paid both of our vehicles off.

Life was good for a while.  Then ten years later we found ourselves in a similar situation.

We both had higher incomes, yet we were living paycheck to paycheck and $50,000 in debt.  It is amazing how stupid can hit you twice, but trust me, it can.  It can knock you out if you are not an active participant in your life.

Stupid can and will hit you twice if you do not acknowledge and address the root of your problem with money.

We made the same mistakes because we looked at our debt as a math problem.  When in reality, it was how we responded to stress, reward, and boredom.

If we were doing math, we would not have credit card debt, and we wouldn’t be in collections. This hasn’t got anything to do with math. This has got to do with behavior modification. It’s got to do with changing your behavior. Personal finance is 80% behavior. It’s only 20% head knowledge.  – Dave Ramsey

Related:  Working for Financial Freedom | Why We Paid Off Our Debt

What do I need to do to get out of debt?

When we paid off our debt the first time, we did it as a challenge to ourselves.  We just wanted to prove to ourselves that we could live off the same income and pay off our mountain of debt fast.  We did it!  Tada, we were successful.   😊

Our problem?  We accomplished this debt pay off with a short-term mindset and made it a math problem versus the emotional problem it truly is.  Long-term goals were never part of the picture and so in the process of debt pay off, we never faced our dysfunctional relationship with money.

When we paid off our mountain of debt the second time, we did it with purpose and faced the emotional elements that got us into debt in the first (and second) place.

It was from knowing our “why” we were paying off our debt that brought us closer to each other.  It allowed us to dream and look at our future with excitement and not fear.

Read other debt payoff stories – You are not alone! 😊

Total Money Make Over | Dave Ramsey

When we paid off our debt the first time, I think that some of the ideas on how to do it came from hearing Dave Ramsey occasionally on the radio.

The message was “clear” – – – debt is bad and to take control of our debt we needed to use envelopes to manage your spending cash.

The thing that we didn’t understand is that we were missing out on the core of his program.  The part of the program that deals with the emotional side of money.

When we paid off our debt the first time, we used duct tape, or math,  to “fix” our problem.  The second time, we used the Total Money Make Over to heal ourselves.

We understood that the problem that we had with money was not due to the amount of money we earned, it was the emotional relationship that we had with money. 

It was this piece of knowledge that help us to get out of debt.

When looking at your get out of debt options, I know there are so many people trying to sell you something when you are already in trouble.

To help you with the healing associated with overcoming your relationship with money, I highly recommend heading over to your local library and check out the Total Money Make Over by Dave Ramsey or enroll in a free Audible trial and listen to the man himself read this very powerful book to you.   You will not regret this read.

Getting started in your quest to find financial freedom

The definition of financial freedom varies for everyone.  For us, financial freedom is a term that we use that is ever-evolving;  it is our journey to build a better relationship with each other and with our money.

We do not want our spending to shackle us to the same town or to the same job for the rest of our lives.  It is time to take control.

Taking control of your debt from a holistic approach

When we got out of debt the first time, we never addressed how we landed ourselves in debt in the first place.

For us, we avoided carrying balances on credit cards except for the oh so attractive zero percent interest rate offers that we couldn’t turn down.  To us, we did not have a problem.

We put money into savings, and therefore we were responsible.

It was that mindset that Rob and I never addressed when we paid off our debt the first time.  When we would make a large purchase, we would decide if we could afford the payment rather then the item we were purchasing.  We were savvy, hardworking Americans that could score a zero percent auto loan, and therefore we deserved it.

We were living the American dream.

Getting out of debt with no money and bad credit

In the Northwestern Mutual’s 2018 Planning and Progress study found that 20% of American household’s income spends 50%-100% of their monthly income on repaying their debt.  Getting out of debt when you have no money seems impossible, but it isn’t!

You need to …

Stop for a moment

Put your hands on your hips

Shoulders back


Inhale deeply and hold…now exhale slowly.

Do this two or three time and then continue reading.

You can do anything!  You are the designer of your life and you can and will make this happen. 

[If the thought of “I can’t” still lingers, tell that internal voice to knock it off because you have got this!]

Increase your income or decrease your spending


Now stop the sniveling and let’s get to work.

[Sorry, my mothering style is very similar.  When our daughter was in Basic Military Training, she told me thanks for preparing her.  “Thank you for being the voice in the back of my head letting me know that I can do it!”]

Having no money comes with two simple solutions:  Increase your income or reduce your spending

It is simple, and both are totally doable!  We are Americans that live in the land of excess and opportunity.

Above I shared both of our pay off journeys.  Our first experience with being debt-free was accomplished by increasing our income.  The second experience we had with becoming debt-free was achieved by becoming aware of what we were spending money on and reducing our spending.

First things first:  Stop thinking about what you do not have and think about what you do have available to you:

  • Money that you have on hand
  • Income that you earn
  • The skills you have
  • Resources at your disposal
  • Items of value that you can sell

By focusing on what you have, you become empowered.  The feelings of being a victim to your actions or the victim to the world fall to the wayside.  Your hands are on your hips, your shoulders are back, your chin is up, and you are prepared to get to work.

Filing for Bankruptcy

You are a fighter and giving up is not an option.  Bankruptcy is for other people.  Why?  Because you know what you have; you have spunk, and your spunk will lead you to success.  You are not a sissy la-la!

So, explore your options:  Make more or spend less!  The choice is up to you!  It, not an either/or decision, it is just a decision that you are going to have to make to take control of your life and change your future.

Reduce your spending

Let’s establish that money management is a head game before we go any further.  Reducing your spending is just part of that head game.  So often we see long lists of things you need to give up in order to get out of debt.

By focusing on what you need to give up, you are adopting some of the same principles that make dieting unsuccessful.  So, for your spending reduction, focus on the things you are going to gain rather than lose.

Here are a few examples:
  • I can save $10 a month if I cancel my Hulu subscription that I have not used in a few months
  • I will reduce my home and auto premium by $115 a month by switching insurance providers
  • By bringing my lunch to work four days out of the week, I will save $40 a week

Ask yourself…is your glass half full or half empty?

Related:  10 Ways to Save Money and Pay Off Debt Without Clipping Coupons

Increase your income

The first time that we intentionally paid off our debt, we were able to make that possible due to me going out into the workforce full-time.  If it weren’t for our income increase, we would have eventually had a catastrophic event in our lives that would have made us realize that we were not responsible with our money.

You must set your mind to the concept of changing your life and that improving your future is doable.  Once you realize that the only thing that can limit you from increasing your income is you, you will see so many opportunities around you to make money.

There are possibilities all around you that will allow you to increase your income:

  • Seek a higher paying position within your current organization
  • Seek out a higher paying job in a new organization
  • Ask for a raise
  • Work overtime
  • Work a side hustle

Related:  Hustle! Legitimate Ways You Can Make Extra Money From Home

But I have bad credit…

When it comes to money management, our FICO credit score is that end all be all number that we use to determine our money management skills.

Or at least that is how I used to look at it. 

Up until a year ago, I looked at our credit score as our badge of honor.  It wasn’t until I heard Dave Ramsey explain his take on a credit score that I finally understood my grading scale of success had been skewed all these years.

Like it or not, your credit score is not an indicator of winning financially. All it tells you is whether you are good at borrowing money and paying it back. That’s it. – Dave Ramsey

It was that dose of logic that caught my attention.  It made me open my eyes and see my beautiful credit score for what it is:  it is my report card for how well I pay my bills.

We are not focusing on how well we pay our bills in this plan.  We are focusing on how fast we can pay the balances off.  Over the years, we have consolidated our debt by refinancing our home and used credit card balance transfers to refinance our debt.

Both of those actions got us nowhere!

In this post, we are focusing on paying off our debt for good.  Your credit score is of no importance in this journey as you are going to dominate your debt and pay off one balance at a time.

You are going to face your lousy spending habits once and for all!

Should I pay off my debt or save money?

Putting money into savings is essential for building wealth.  Keeping a safety net of cash saved so that in the event of an emergency, you have the ability to fund the crisis without borrowing money is just good sense.

When you owe money to someone else, “should I pay off my debt or save my money” is an excellent question to ask.  This question is one that Rob and I had many conversations around.

We realized that our savings habits were almost as unhealthy as our spending habits.

Savings provides a logical sense of security, but just like spending money, saving money can trigger an unhealthy emotion.

When we faced our debt the second time, we were desensitized to our financial status as we were automatically depositing money to our savings account and putting money into our 401K every payday.  It was the action of depositing money that made us feel like we were responsible.

The thing that eluded us was that our savings balance was not growing.  Our savings account was not growing because we were taking money out of our savings just as quickly as we put it in.

When we set out to pay our debt off the second time, we faced our dysfunction with both spending and savings.  We stopped “saving,” and withdrew all of the money except for $2,000 and applied it to our debt.

To continue our “reckless” behavior, we reduced our 401k withholdings to meet the matching contribution of our employer.

It was 100% commitment to the process!

It was terrifying

The act of stopping the only thing that made us feel responsible with money was a total head game.  Looking back at the process, the decisions that we made with our savings emotionally impacted us the most.

The decision to use our savings to pay off debt and postpone any future deposits had a two-part impact on our mindset.  Both commitment and vulnerability!

This decision was our pledge to ourselves and each other that we were going to be successful in changing our financial fitness.

By withdrawing our money, we felt vulnerable.  That vulnerability pushed us every day to take every penny saved and throw it at our debt.  We looked forward to the day that we could once again save money.

Realizing that money is a head game is required to dig you out of this hole and make sustainable changes in your life.  This is a head game, not a money game.

Benefits of a Small Emergency Fund While Paying Off Debt

Obtainable Goal: By keeping the small amount of money in savings you create an obtainable goal.  You commit to yourself that you will maintain a balance of X dollars as a safety net.  Your safety net fund is money set aside that you will only tap into in dire emergencies.

Learn what an emergency is: In the immediate gratification society that we all live in, it becomes hard to differentiate between want and need.  By committing to keep X dollars earmarked as a last resort fund, you make a promise to yourself that you will do a want/need analysis with every dollar you spend.

Pride: You will be able to cope with some of the embarrassments that you hold inside.  I know for me, I felt guilty for my actions that lead to our debt and had me continuously tapping into our savings.  By keeping that $2,000 in our account without adding to it or removing from it, my sense of self-control and pride was restored.

How Much Money Should I Save While I Am Paying Off Debt?

The dollar amount that you want to keep in your savings is 100% up to you.  It is your comfort level and your relationship with money.  Dave Ramsey recommends holding a $1,000 emergency fund throughout your debt free journey.  Dave’s plan is a 7-step plan that consists of “baby steps.”

Dave Ramsey's Debt Payoff Baby Steps

The level of your startup emergency fund, step 1, is personal.  It needs to be a hard number that you will commit to holding onto.  Just keep it to a dollar amount that makes you feel comfortably uncomfortable.  It is amazing the motivation and insight found in being a little bit uncomfortable.

The feeling of being uncomfortable will help you to pay off your debt fast!

Attaining debt freedom fast – How to get out of debt fast

First, accept that the words fast and easy have two entirely different meanings.  When you want to get out of debt, the faster, the better does apply.  The thing you need to know is that it is going require you to work hard and with purpose.

You will have to face the habits you have developed over the years and replace them with habits that consider your well-being and your future.

Instead of trying to stop doing something—“It’s hard to stop a behavior,” says Berkman—start doing something else.

“We are action-oriented creatures,” says Berkman. Some studies have shown that the more you suppress your thoughts, the more likely you are to think about that thought or even revert back to that bad habit. – 5 Science-Approved Ways to Break a Bad Habit – Time

Habits and How they Impact Your Money

A bad habit that impacts your financial success comes in many forms.

  • It could be shopping for things you do not need
  • Focusing on how overwhelming the problem is
  • Not paying attention to what you spend your money on
  • Keeping up with the Joneses (or the Kardashians if that is more your speed)
  • Self-deprecation where you continuously tell yourself that you will never have anything because of a, b, and c.

Whatever your bad habits maybe, now is the time to face them.  Now is the time to make a change and break the bad habits you have developed.

If you do not take this opportunity to identify the things that are holding you back, you too can pay off your debt fast and then end up in the same situation ten years from now.

Related: Master Your Habits | Take Back Control of Your Life


Your current financial situation is a result of the relationship that you have with money.  To heal the way you view money, you are going to set the long-term goal of paying off your debt by a specified date.  The way that you will reach that long-term goal is by establishing mini-goals along the way.

The small debts are the low hanging fruit that is easy to take care of first and then work your way up.  Human nature is to gain momentum with every accomplishment.

The Snowball Method of Debt Pay Off


The method that I am referring to is the Snowball Method.  The Snowball Method works by stacking small wins on top of each other until the debt is paid off.

It is the little wins along the way that will increase your confidence in the process.

In 2016, Harvard Business Review researchers found that the most effective way to pay off debt is with the Snowball Method.

Our research suggests that people are more motivated to get out of debt not only by concentrating on one account but also by beginning with the smallest.  Remi Trudel


You are going to start with your non-mortgage debt.  Then one by one you are going to pay the balances off one at a time.  Just like a snowball rolling down a hill, it will pick up momentum and grow with every role (payment 😊).

1. Commit to pay the minimum payment every month.

2. List all of your debts smallest balance to largest balance.

This is where the head game comes into play.  You will list smallest to largest, so you can have easy wins.  If the balances are close, let the highest interest rate guide you to which debt you will pay first.

3. Look high and low to find money to add to your debt snowball.

4. Pay the minimum payment plus the extra amount towards that smallest debt until it is paid off.

5. Once you pay a debt in full, add the payment from the first debt to the minimum payment on the second smallest debt payment.

6. Repeat until you pay all your debts in full.

Let’s Find the Snowflakes Required to Tackle Your Debt

Accept the idea that spending money can be more emotional gratification rather than rational thought.   Once you realize that your daily decisions are holding you back, the sooner you can see all of the opportunities to find money and heal your relationship with money.

1.  Review your daily routines (habits)

Ask yourself how much enjoyment you are receiving with each purchase.  You must be honest!  From now on, when you buy something small, ask yourself how your satisfaction from your purchase compares to the enjoyment that you will have when your debt is paid off.

If the idea of having your debt paid off is more enjoyable, then next time you think of making that purchase, make a small one-time payment online towards your debt in that amount.  You will still have the gratification of spending the money, but your money will be going to a bit thing versus a small thing.

2.  Find those places where you are spending money that you do not need to

It is amazing how much money we waste.  From subscriptions that we no longer use to overpaying on our insurance or utilities.  Make a laundry list of your monthly expenses on a three-column sheet.  Name each column:  Must-Have, Don’t Need – But Like, and Why the Heck Am I Paying for This?? column.

Why the Heck Am I Paying For This?? Column:  Start by canceling all the Why the Heck Am I Paying for This??  Bam – add this money to your snowball!

Must-Have Column:  Next, analyze each item in your Must-Have column.  It is amazing the savings you can find here.  Reduce your grocery bill, carpool, pack lunch now and then, call your service providers and see if there is a more economical plan available.  More money to your snowball!

Don’t Need – But Like Column:  Now for your Don’t Need – But Like column, this one you are going to do the same test that you did in item one.

Does the enjoyment that you receive from this expense exceed the pleasure you will have when you are out of debt?  If it provides you with true happiness, keep it.  If not, add this money to your snowball!

3.  Income Tax Withholdings

If you received a substantial income tax return this year, speak to your payroll department to see what you have set for your income tax withholdings.  Then speak to your tax advisor to see what modifications you need to do to reduce your income tax return.  There is no reason to give Uncle Sam an interest-free loan anymore!  Now take that paycheck increase and add it to your snowball!

Related: 11 Things We Did to Pay Off $50,000 Worth of Debt in 6 Months

Making Sure That Your Debt Pay Off Is Successful

This is a big deal, and it requires a game plan to keep you on track.  Your game plan is called your budget!  Yuck!  Yikes!  Oh crap!  Yep, we are now at the scary part of your debt pay off journey.  Your budget.

No fear!  A budget is not a bad thing!  The biggest head game that you are going to have to get over is that a budget is not a tool of suppression but a tool of liberation!

When learning how to manage your money and build a healthy relationship with your finances, your budget will be your new scorecard.  Your budget will keep track of what you have done, what you are doing, and what you want to do with your money.

To help you out, we have put together an excellent budgeting toolkit that is designed to help you get on track and stay on track:

What do I do once my debt is paid off?

If you take anything away from your time spent reading this article today, please have your take away be that this is a life change.  This is not a short-term goal.  Commit to yourself by believing that this is me changing my life forever!

You do not want to have to learn the same lesson again in the future as we did.  Know that the struggles are not over once you make your final payment.  You need to live with the same financial vigor that you developed in the debt pay off phase.

How we are making sure we do not have a third time…

Once our debt was paid in full, our next step was to build up our emergency fund and restore our 401k withholdings to 15%.  We also started fully funding our Health Savings Account (HSA) so that we can take advantage of tax-free medical bills.

For us, we realized that we needed an accountability program.  Our program includes a financial advisor and you – – – our Empty Nestin’ community.  It is through our blog that we have to remain true.  For Rob and I, the time that we spend writing articles for Empty Nestin’ is our continued commitment to each other as we to strive to push forward and manage our money responsibly.

Leave a Comment

Your email address will not be published. Required fields are marked *