How to get out of debt with no money – Where to start?

May 14, 2018 4 By Cris

Well first, if we are ever going to stop being fake rich we will definitely need to get out of debt. The further we have dug ourselves into debt, the worse our faux rich lifestyle has become. But how in the world do you get out of debt with no money?

I know there are many of you out there struggling to figure out just how to survive until the next paycheck, so you have no clue how you will ever get rid of all of this debt.
We understand that feeling because we have been….actually we ARE there ourselves. However, we won’t be able to get to our goal unless we have a plan. So I will share some things we have discussed and will be implementing into our debt-freedom plan.

Create a Budget

DISCLAIMER – Although I will try my best not to (maybe not) there are occasions where I will use profanity. I have

learned that sometimes cuss words just give the needed emphasis to the point that is being made.

That being said you are about to become very familiar with a dreaded cuss word that some of you may be offended by….This my friends is the “B” word….BUDGET.

Budget Squeeze

You don’t have to do this!

We have tried and tried again, but our finances always get messed up when we don’t have a budget in place. I am not saying that things didn’t sometimes get off when a budget WAS in place; there were several times when the budget had to be “updated” mid-month. But when there was no budget, there was no plan. When there was no plan, we failed miserably. I believe it was Dave Ramsey who said “You have to tell your money where to go, or it leaves!”

Setting up a budget (or a cash flow plan for those who are offended by the ‘B’ Word) is easy and it gets even easier once you get rolling. There are many budget templates on the internet that you can use if you don’t already have one. We use an Excel spreadsheet that we update constantly, but it gives us an idea of where our money is going (even when that place is down the drain).

I am not here to tell you what to include or not include in your budget. It is totally up to you what you spend your money on. The important thing is that you KNOW what you are spending your money on. Seeing this number will be such an eye-opener and may lead to better spending habits in the future.

Another great tip that I read in this article is that it isn’t about how much you make, it is about what you do with what you got! I know people who are earning much less than we are in our household who manage their finances much better than we do. Because they have strong budgets they are able to do more things (like travel and take time off to be with their family if they like).

Here are a few tips to get started on your budget:

  • Create a list of all of your monthly bills and bill amounts (these are bills that don’t have balances like rent, utilities, insurance, etc.)
  • Now create a list of all of your monthly debt and the payment amounts (these are payments that have a balance that you will eventually pay off like the car payment, credit cards, etc.)
  • Scan the last 3 months of your bank statements to get an average of your miscellaneous spending (this could include things like clothing, Starbucks visits, car maintenance, etc.). Try to create a category for these on your budget as well so that you move things around a little better once you get good at managing your budget
  • Now that you have these amounts add them all up to see what you are paying out monthly
  • Take your monthly income then subtract your monthly payment from it. This is your “Freedom Money” amount (we will discuss more about this later)

Congratulations you have just created your budget. Some of you are actually more alarmed now because that freedom number was very small…and in some cases negative. Fret not, as this is where we were as well. How do you think we became fake rich? We will discuss a bit later how we can improve this number.

Make a list of ALL of your debt

In order to pay off all of your debt you need to know exactly what you owe. Some people have no clue how much debt they have. WE WERE THOSE PEOPLE! Putting this in writing will help you to be more accountable to your goal of getting it paid off.

We have read a number of books, been to seminars, and have listened to countless audios about this topic. The tips that I am listing here are going to be bits and pieces of all of that information that we have found helpful. Remember that we are on this journey together, so many of these things we are also still implementing right now.

You should pat yourself on the back because this step should be just about complete since you have completed your budget. We have this as a separate step because we will have a strategy to actually start paying off your debt.

This is going to be a very important step because you will be tempted to exclude some of your debt. Include all of your debt from Student loans to your Aunt Betty who loaned you $50 that you still haven’t paid her back. DO NOT LEAVE ANYTHING OUT!

Here is how you make a list of all of your debt (Note: If you can do this in a spreadsheet GREAT!)

  • Write down EVERY debt that you owe including the balance and the monthly payment. If there is no monthly payment make one up! So if Aunt Betty is okay with you paying her back $10 per month then add her $50 balance and $10 per month
  • Once every debt is listed divide the total balance by the monthly payment. This will give us the total number of months you have remaining to pay off your debt
  • Now list your debts in order of the number of months to pay them off going from smallest to largest.

Keep in mind we don’t care about interest rates (well in a few cases…but for now don’t worry about those). The important thing is that you have everything listed from smallest amount of months to pay off.

When you have your debt list completed move on to the next step “Use your ‘Freedom Money’ to pay off debt faster”.

Use your “Freedom Money” to pay off debt faster

Remember that number above that we had left over after subtracting our monthly bills from our monthly income? That is what we will call our Freedom Money.

This amount is what we are going to add on to our monthly debt payments in order to help pay off our debt faster. However, we are only going to add it to the debt that has the LEAST amount of time left to pay off.

Cut up that credit card

Pay those cards off!

So let’s say your Freedom Money amount is $100. You are going to take that first debt on your list and add $100 to your monthly payment amount. If your monthly payment was $100 you will now pay $200 per month until that debt is paid off.

Let me show you an example so that you can see the impact we just made with just $100!

Let’s say you have a Visa card bill that has a balance of $1,000 and the monthly payment is $100.

Making $100 payments every month would have you paying off this bill in 10 months ($1,000/$100 = 10)

Adding our Freedom Money to the monthly payment we are now paying this balance off in 5 months! ($1,000/$200 = 5)

We just cut our payment time for one credit card in half JUST by adding an extra $100/month!

BUT WAIT – Here is where it gets more exciting!

You now have a credit card completely paid off (that you’re hopefully not using anymore *insert stern face here*) and now have $200 to add on to the next debt in your list! Let me show you an example of how powerful that is.

So Let’s say debt #2 was a Discover Card bill that had a balance of $2000 and you are paying $100/month. That means it would have been paid off in about 20 months…but….

We have been paying the minimum payment on time for about 5 months so the balance is now about $1,500. The minimum payment was $100 PLUS we are adding our NEW Freedom money amount of $200 ($100 initially PLUS the $100 from the minimum payment of the Visa Card that is now paid off) so now we are paying $300/Month toward our $1,500 discover card balance.

Now we will have Discover paid off in 5 more months! So again we have cut the time in HALF from what we initially listed.

Isn’t this exciting??? I am already excited for you 🙂

You will continue adding the new freedom money amount to the next debt on your list until all of your debts are paid off. You will probably get to the point where you are paying thousands toward a car loan or mortgage and paying debt off at super speed!

What to do when there is no “Freedom Money”

Empty Pockets

I have no money 🙁

I know some of you are saying “What if there is no Freedom Money”? The question we started this entire post off with is How in the world do I get out of debt with no money?

Hopefully once you created your budget your realized that you did have money there, you just didn’t see how it was there. That is going to be one of the hardest steps in this process. Understanding where your money is going is a huge part of this process.

If you have created a budget and the balance is negative at the end of the month you will have to start getting creative. I am not a huge advocate of telling people to start cutting stuff out of their budget, but it is something you may need to take a look at if some following steps don’t work.

If the bills exceed the income and you can’t lower the bills then the other option is to increase the income. You may have to find a side hustle or get a part-time job. Maybe you can ask your boss for a raise and if it works for you let me know what tips you used ;).

The most important thing to do is to not let it discourage you. We are actually starting all of these steps over TODAY. We have gone through starting this process a couple of times and saw success when we stuck to it. Now we have all of you here to hold us accountable and we are here for you as well.

Don’t procrastinate…. Get Started NOW!

This was a lot of information and probably a lot to process especially if you have never taken any of these steps. Don’t let that discourage you. Getting all of this down on paper in front of you can be exciting especially once you are able to see that these numbers can start moving.

So what are you waiting for?

  • Create your budget
  • Find out your monthly freedom money number, or what you need to do to get to it! (I recommend you get it to at least $100)
  • Start using that freedom money to pay down that first debt. Don’t use it to buy more trinkets….now is not the time for that!

You have come this far, don’t stop now. If you have questions about any of these steps feel free to comment below or email me at

All the best!

Cris T





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