How to Get Out of Debt on a Low Income

Debt's heavy. And too many of us are carrying that weight around every single month. But it's hard to know how to get ahead, especially if your income's on the lower end.

If you have a goal to get debt out of your life, you can make it happen. And once the debt's gone, all that money you were sending out every month on payments will be back in your budget. So it's completely worth it!

How to Pay Off Debt With a Low or Fixed Income

If you're feeling the weight of debt, you aren't alone. Americans owed $18.8 trillion in household debt as of the first quarter of 2026.² And with credit card interest rates hovering around 22%, it's easy to see why so many people feel stuck.³

Living on a fixed income—such as Social Security, a pension or disability benefits—can make getting out of debt feel even harder because your income doesn't grow. But here's the thing: Most of the time, fixed income is just another way of saying low income. The real challenge isn't that your income stays the same. It's that it may not be enough to comfortably cover your bills, everyday expenses and debt payments.

The good news? You can get out of debt, even on a low or fixed income.

How Do I Find Out How Much Debt I Have?

Start by making a list of every debt you owe, including student loans, car loans, credit cards, medical bills and personal loans. Write down the balance for each debt, then add them together to find your total debt.

Whatever amount you're staring down, you can pay it off. And looking at that total shouldn't feel defeating. It's the first step toward getting out of debt and finding freedom!

How Do I Budget on a Low Income?

A budget is the fastest way to find money you didn't know you had. When you tell every dollar where to go before the month starts, you stop wasting money on stuff you don't even need.

Once you set up your budget, you'll see exactly how you've been spending your money. Then you can start making the changes you need to get some confidence and pay off your debt. That’s why so many people have told us they feel like they got a raise when they started budgeting!

EveryDollar budgeter Sarah Fragnito said, "Until you look at your finances, you don't realize how much of your money is going to waste."

That's right—you might have more money to work on your debt payoff goal than you even think. EveryDollar, Ramsey's budgeting app, makes it easy to create a zero-based budget in about 15 minutes. On average, new EveryDollar users find $395 in their first month, giving them more margin to pay off debt.⁴

If your income isn't enough to cover all your bills, focus on the Four Walls first: food, utilities, shelter and transportation. Before you put an extra dollar toward debt, make sure your family has groceries, the lights stay on, you have a safe place to live, and you can get to work.

Once your Four Walls are covered, put any remaining money toward Baby Step 1—saving a $1,000 starter emergency fund. After that, start paying off your debt with the debt snowball method.

If you don't have enough income to cover the Four Walls, don't ignore the problem. Look for ways to increase your income with extra work, cut nonessential expenses, and take advantage of available community resources (such as food banks or utility assistance) while you get back on your feet.

What Is the Best Way to Pay Off Debt?

The best way to pay off debt—no matter your income—is with the debt snowball method. Start by listing your debts from smallest to largest, then work through them one at a time.

1. List your debts from smallest to largest, no matter the interest rate.
2. Make minimum payments on all your debts except the smallest.
3. Pay as much as possible on your smallest debt.
4. When it's paid off, move everything that was going to that debt to the next-smallest.
5. Repeat until every debt is gone.

So, why aren't you focusing on interest rates right now? Because you need a quick win. When you knock out the smallest debt first, you get motivation. When you pile that payment onto the next debt, you get momentum. Motivation plus momentum equals victory.

You'll be like a snowball rolling down a hill, getting bigger and stronger with every debt you knock over.

Plug your numbers into our Debt Snowball Calculator to estimate your debt-free date and see how every extra debt snowball payment can get you closer to the finish line.

Debt-Free Date Calculator

How Can I Make More Money to Pay Off Debt?

If your budget is already as lean as possible, increasing your income is one of the fastest ways to speed up your debt payoff. Every extra dollar you earn can go straight to your smallest debt, helping you build momentum with the debt snowball.

Here are a few ways to create extra income:

• Grab a side hustle.
• Take on freelance clients.
• Sell stuff.
• Switch jobs.
• Work overtime.

Yes, all this is extra work, but it's also extra income. And remember—this is just a season. The debt will be gone, and you’ll get to keep all your income when you don't have to make payments anymore.

How Do I Cut Expenses to Pay Off Debt Faster?

Some of the quickest ways to cut expenses are canceling unused subscriptions, eating at home instead of restaurants, and avoiding impulse purchases. Those three categories can free up more money for your debt snowball without making major lifestyle changes.

Here are a few ways to put that into practice:

• Cancel subscriptions or streaming services you rarely use.
• Meal plan and cook at home instead of eating out.
• Shop with a grocery list to avoid impulse purchases.
• Combine errands to save money on gas.
• Buy only the clothing and household items you truly need.
• Look into warehouse memberships to save on groceries, household items and gas.
• Compare insurance, phone or internet plans to lower your monthly bills.

Make sure you put all the extra money in the budget toward your debt snowball. All of it. It's so easy to turn those savings into splurges without even meaning to. But now's not the time for that. This is the time to crush your debt.

What Debt Payoff Tactics Should I Avoid?

Steer clear of any strategy that moves your debt around instead of paying it off. That means no debt consolidation loans, no balance transfers, no HELOCs and no personal loans—not even from family. These tactics may promise quick relief, but they don't address the habits that caused the debt in the first place.

Here are some common debt payoff tactics to avoid:

• Debt consolidation: Combining your debts into one payment doesn't make them disappear. Lower monthly payments often mean a longer repayment timeline and more interest over time.
• Balance transfers: Moving credit card balances to a new card may offer a temporary low interest rate, but it doesn't reduce what you owe and can make it easier to keep borrowing.
• HELOCs: This is when you borrow against the equity in your home and you're basically trading something you actually own for more debt. It puts your home at risk if you can't make the payments.
• Personal loans: Borrowing money from a bank, family member or friend to pay off other debt simply replaces one debt with another.

These strategies might sound like an easy way out, but they often leave you in more debt and more frustration. Don't let anyone sell you a shortcut. Stay focused on the debt snowball instead.

Ready to Get Out of Debt?

Paying off debt on a low income may feel impossible—until you find the money you didn't know you had. A zero-based budget, the debt snowball method and a little extra margin can help you make steady progress toward becoming debt-free.

EveryDollar helps you create a zero-based budget so you can take control of your money and put every dollar to work. When you know where your money is going, you can make intentional decisions that move you closer to your debt-free goal.

Here's how to take action today.