How To Get Out Of Debt When You're Broke... Here's How I'm Doing It!

How To Get Out Of Debt

Not the easiest thing to do, but I’m going to share my secret of How To Get Out Of Debt When You’re Broke.

Like most millennials, I have debt. While I get really angry when I think about where I should be in life by now, it’s nice to know I’m on the right road.

But I’m not one to sit back and be defeated by anything, so I worked to find answers on what I could do to get out of debt, and it’s working!

I have found a secret ingredient that has helped me and will share that with you. Are you ready to say goodbye to debt and hello to financial freedom?

I was living paycheck to paycheck with college debt and medical expenses that drained me dry.
Medical Debt and Student Debt are two of the most common causes of debt in the U.S… It’s something most people cannot avoid.

But whether you have medical, student loan, credit card, or any other debt, this list will work for you. I was shocked to find a list of Key Reasons Behind America’s Consumer Debt.

Read below to see the steps I’m taking to help me pay off my debt!

You can’t get out of debt without know exactly what and who you owe.

This post contains affiliate links, which means I may receive a small commission, at no cost to you, if you make a purchase through a link.

1. Get a Budget Tracker

Being a recent newlywed, I have been determined to get out of debt. So I use this Annual Budget Template that I love!

Having this transparent insight into my financial situation gave me the motivation to get aggressive paying my bills and saving. I found out I could pay off my $10K credit card bill this year. I knew that wouldn’t leave me with much leftover at the end of the year, but the fact I could be credit card debt free was worth it!

That’s why creating a budget that actually works is so important.

To help me earn more money to pay off debt sooner, I picked up a few side hustles to help with my debt-free goal.

Make sure to negotiate your bills. You could be saving hundreds a month by simply asking. If you’d rather have someone do it for you, check out Trim!

Trim acts as your Personal Financial Assistant. It renegotiates your Comcast bill for a lower price, car insurance, and finds additional ways to save you money? You can check out Trim for FREE.

Money saved is money earned.

What are they getting out of it? Trim makes money by taking 25% of the money they save you, so you know they’re working extra hard to save you money.

2. Cut Your Monthly Expenses

Don’t get me wrong, making sacrifices is HARD! Especially when it seems like everything you’re doing right now is a necessity.

It was arduous for me to cut out some of the things I loved (temporarily) like Salsa dancing, Chipotle, and getting my nails done.

Sacrificing Chipotle made me feel like I literally jumped out of a plane with no parachute…

Here is what I let go of in my everyday life to save:

No more social eating/drinking.
No more spa/nail appointments.
Avoided unhealthy snacks in the convenience aisles at the local grocery store that do not provide any nutritional value to my body.
Reduced cell phone plan.
Canceled my gym membership.
Adjusted my heat/air and either wore more or fewer clothes.

You can find a full list of ways to drastically cut your monthly expenses and save hundreds a month.

3. Get a Side Hustle

There are 2 side hustles that have worked well for me.

a. Reselling Products on Amazon

I signed up for Jessica Larrew’s free 7-day email course from ‘The Selling Family‘ and that inspired me to sell on Amazon. THANK YOU SO MUCH, Jessica! It has catapulted me into entrepreneurship.

Reselling products on Amazon has earned me over $5,700 in profit over the last 7 months year-to-date!

Keep in mind I still work a 9-5 so you can definitely do this on the side as I do.

I registered for a Professional Amazon Seller Account for $40.00 a month in January 2019. I did not have 1 sale for the first three months of my business. In the third month, I got my first sale and within the first 5 months of reselling, I’d sold over $9K on Amazon working less than 12 hours on the weekends.

Below is a screenshot of my sales from March – July.

Check out my Amazon Tips.

While I make four figures selling on Amazon, Jessica, from ‘The Selling Family‘turned her Amazon business into aFULL-TIME, SIX-FIGURE BUSINESS!

Jessica is the reason I began reselling on Amazon. Her story is incredible!!

She lost her job, and instead of settling for being employed by another “unsure” thing, she created her own business, selling on Amazon.

Jessica has been selling on Amazon for several years and knows the ends and outs of the business extremely well! So much so that she created a course to help hundreds of people make several thousands of dollars per year!

That is exactly why I highly recommend taking Jessica’sAmazon Boot Campcourse.

b. Reselling on eBay

eBay has worked well for me!! Although for me, it seems to have a much smaller audience than Amazon but people still go there for great finds! Which includes my items!

My strategy with eBay is simple “I don’t buy anything that I cannot return“. Everything I buy from my sourcing runs is returnable. Usually, you will have 30-days to return items. If they don’t sell within 30 days, I take them back. I know, I know, yes it’s extra work and time, but (right now) I don’t mind if that means the risk means more money in my pocket.

Two reasons I believe my sales on eBay aren’t as good as they could be.

I do not offer returns
The buyer pays for shipping

Once I am out of student debt, I may change these two roadblocks. But for now, I am on a mission to debt freedom.

My biggest flip to date was a tiny designer handbag. I listed it under ‘auction’ and 3 days later earned $250 off of one item!After that, I was hooked!

Rob from theFlea Market Flipperis the MASTER flipper and earns over $130,000 flipping items from Flea Markets and thrift stores PART-TIME online.

If you’re interested in learning more about how to flip items on eBay, make sure you check out thisfree workshop for Flea Market Flip.

Below are my units sold / sales on eBay from March-August.

Below are the profits I’ve made on the platforms below in the past 7 months I’ve been at this. September was a slow month for me because I wasn’t able to dedicate as much time into sourcing.

If you’re interested in learning how to sell on eBay, make sure to check out my article, 10 Best Tips: How To Sell on eBay for Beginners.

4. Consider a Personal Loan

I’m sure I’m one of many who feel like they are shackled to debt.

Some of my interest rates were as high as 29.99%. There was absolutely no way I could pay off my credit card debt with those high-interest rates + the balance in a reasonable amount of time, so I took the best option I had. I looked into a personal loan hat would lock me in at an interest rate of 9%. That was a no-brainer for me. I set up my direct deposit so I wouldn’t have to worry about the payments and I cut up my other credit card.

One of the best parts about a personal loan is that you can pay it off earlier so you’d be paying less interest than originally agreed. A personal loan offers you 1. Loans up to $35,000 2. Low fixed rates 3. Affordable monthly payment, and 4. No prepayment fees.

If your finances could use a personal loan to get rid of credit card debt with outrageous interest rates, consider taking out a personal loan here.

Enter your loan amount to see what your rate could be. Don’t worry, checking your rate won’t impact your credit score.

Taking out a personal loan for me was the best thing I could have done because my credit score jumped up, it saved me thousands of dollars, and I’m able to manage my payments much easier than I was with my credit cards.

I know I may sound like that GEICO commercial, but I really did save more money by switching to a personal loan with a low APR. If fact, it saved me over $600.00 in interest.

The most important thing to note about taking out a personal loan is that this is not a forever thing. I recommend taking out a personal loan to get out of the hole you may be in, get out, and stay out. You don’t want to do all of this hard work just to get right back there. Make sure to stay out of debt if you can.

5. Consider Paying Student Loan With 401K

I know this sounds scary, I thought so too.
But, don’t be intimidated. You’ve got this!

I’m afraid to take risks when it comes to money, so I took out a small loan from my 401K and paid off one of my loans from FedLoan in its entirety.

This was a great decision for me because I saved money and am one step closer to being DEBT FREE!

For me, I wasn’t hit with any major penalties, but be sure you know the terms of your loan before you make a decision like this! The interest rate on this loan for me is 6.50%. Which is a lot better than the alternative for me.

The duration of my particular loan was 18 months (although you should be able to select a duration that works for you and your family). I also have the ability to pay off the loan faster with no penalty.

What helped inspire me was an article I read on SoFi, “Can You Pay Off Student Loans with Your 401(k)?“. I hope this helps you too!

P.S. 2 weeks after I paid off this loan, my credit score jumped 45 points! If you haven’t already signed up for Credit Karma to keep tabs on your credit score, click here to sign up for Credit Karma.

6. Ask For Lower Interest Rates On Credit Card/s

Sometimes we get caught up in paying bills and just get stuck in the routine of paying bills. But when you’ve been paying bills for SO long we get into a coasting zone. At least I do.

So to help me get out of a rut, I called my credit card company to request a lower interest rate, and guess what!?!?

They lower the interest rate!

Sometimes things don’t change because we don’t ask.So pick up the phone and ask. The worst they can say is “no”.

What are you doing to get out of debt? I’d love to hear your stories, let me know in the comment section below. I’d love to hear what you’re doing!

If you liked this article, there’s more. I’m working on some more ways to make money on the side and to stay in the know you’ll have to join my mailing list. Click here to subscribe.

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