How To Get Out Of Debt On A Low Income

November 24, 2018

  • Home
  • |
  • Blog
  • |
  • How To Get Out Of Debt On A Low Income

For many new mothers, returning to work after having a baby, happens way too soon. This can be for many reasons - but today we're going to talk to a very specific type of mama: the one that goes back to work because if she doesn't, there won't be enough money coming in to pay the bills. There won't be enough money to pay the mortgage. There won't be enough money to pay the credit card bills.

And what if you're on a debt free journey? How do you get out of debt on a low income?

How to get out of debt on a low income. The Leveraged Mama.

Your financial goals may be to get out of debt, they may be something different - but these same financial goals cause many new mothers to be blinded by the only 'choice' they see they have: to go back to work. 

You feel you must return to work, perhaps sooner than you really want, because there are bills to pay. There is debt to pay off. There are financial goals.

Returning to work too early

When I returned to work, my daughter wasn't yet walking. I was still breastfeeding her, so I'd have to go into the 'sick bay' to express milk at lunch times. I also had post natal depression.

In hindsight, adding a job into the mix when I was already overwhelmed, the worst thing I could have done at the time.  But at the time, I didn't see that I had a choice. We were running up credit card and store card debt because we had spent all of our savings, and there wasn't enough money coming in to cover all of our outgoings. Every month, our level of debt was increasing. I had to go back to work to stem the bleeding!

How to get out of debt on a low income

Today I'm going to tell you how to get out of debt on a lower income, and explain the perhaps surprising math behind it. But first, there is a MAJOR myth here that needs to be dispelled:

Having a high income doesn't necessarily mean you can get out of debt easier. Beware chasing rainbows. 

Can you still get out of debt when you're broke? Yes. Can you still get out of debt when you have no money? YES.

Our household income has dropped significantly in the past three years, since we became parents. AND YET, our household net worth has improved, and increased more consistently and steadily than ever before.  And I was able to quit my job 5 months ago to focus on my family, and building a new business. And we are still on a debt free journey.

What's going on there??

Well the explanation for that is very simple: 

The less money you have, the more you value it

Have you ever been on a diet? I'm going to go out on a limb here and assume that you've been on at least one restrictive diet at some point in your lifetime.

Which means you'll know how GOOD your food starts tasting, as soon as you're allowed much less of it. I remember actually salivating over some lettuce one time I was super hungry.

So when you eat a limited amount of food, you just can't HELP but be thoughtful about it. A little obsessive even.

Well it's totally the same with money, am I right?? The less money you have, the more thoughtful you are with it.

The less money you have, the more thoughtful you are with it.

Click to Tweet

Money habits before kids

During the Pre-Kids Era, our household income was higher.  Surprise!! And there is some pretty simple math behind it but I’m sure you’ve already guessed that:

  1. We had two full time incomes and,
  2. We had lower expenses (basic necessities).

Less mouths to feed + more time to work = MORE MONEY

But you guessed it again, our overall expenses were much higher. We spent a lot more on non-essential expenses. A LOT more.

Pre-kids we:

  • Ate out more
  • Drank more alcohol
  • Went on more holidays in far flung places
  • Paid high interest rates on unpaid credit card debt
  • Were paying off student loans
  • Bought more clothes
  • Definitely bought more tech
  • Paid for cleaners
  • Created debt without thinking much about it
  • Spent more on birthday and Christmas gifts because we bought for more people
  • People just expected us to pay for things because we acted rich
  • (Ok I) had actually nice skin care and make up
  • Thought nothing of a bit of careless spending
  • Bought more things we didn't need, or we didn't use a lot
  • PAID MORE for more 'top of the line' items that essentially performed the same function as the cheaper version 
  • And generally were a whole lot more carefree with our spending habits.
  • However... all these 'money habits' created a couple of MONSTERS. We were WASTEFUL. At the time, I felt a bit of shame about that realisation.

    Yeah, ugh.

    Unfortunately, bad habits die slowly. Very, very slowly.

    So just stop wasting money

    There you have it! In order to get out of debt with a low income, you just have to stop wasting money! GIVE UP all your terrible pre-kids money habits.

    It's that simple!

    YEAH SURE, if you want to have a MISERABLE life and piss everyone off in the process.

    There are a few reasons why 'just stop wasting money' won't work, without making you miserable.

    #1 - Increased lifestyle expectations

    When I say we created a couple of wasteful monsters, I was probably a little harsh. What I really mean to say is this:

    Our lifestyle expectations had increased.

    When you behave consistently in a certain way, you create expectations - for yourself and those around you.

    You begin to accept and expect a certain way of living. Your partner and kids become accustomed to a certain way of living. People that know you come to expect a certain way of living.  Then you get trapped in the 'keeping up appearances' cycle, because you don't want to sell your flash car in favour of something you can actually afford - in case people think you're broke.

    Seriously. We are so complex.

    But one of the reasons these money habits are hard to give up, is because they've become expectations. This is how life is now.

    #2 - Attaching habits to positive outcomes

    The second reason that these money habits are hard to give up, is because we attach them to positive outcomes. And the 'positive outcomes' aren't easy for us to give up. 

    Let's take the 'paying for a cleaner' example:

    Before we had the cleaner, I'd always clean the house on Saturday mornings.  If we ever wanted to have friends over on a Friday evening, I'd have to race around cleaning up first. I found it hard to relax and have a glass of wine with the husband, when the house was messy. I know, life was hard, so so hard. 

    After we got the cleaner, the house was CLEAN at the end of the week, so it was more relaxing for me. I could easily invite friends over without running about cleaning beforehand. I really liked coming home at the end of the week to a clean house - it made me feel good!

    I paid for that privilege, like I paid for a lot of other things.

    Giving up that cleaner was hard because it meant giving up my relaxing Friday evenings.

    Money Habit (Cleaner) = Relaxing Friday Evenings = Hard To Give Up.

    The key to getting debt free on a low income

    So I believe, the key to paying off debt on a reduced income lies in CAREFULLY reducing lifestyle expectations but being aware of the attachments you've formed to the things you pay for.

    Reducing your lifestyle expectations is not an easy task. But if it were easy - everyone would be doing it!  Who would need to work at all right?

    Related: Best Credit Repair Companies (on

    Steps to take next

    Unless you're already super frugal, I think that the mindset change from being wasteful, to being mindful, will help you continue your debt free journey as planned, without interruption; despite returning to work only part time, or not at all; despite having a lower income.

    Take an honest look at the money habits you have, that might be contributing to your budget blow outs.

    Then start picking off a few of the low hanging fruit - lifestyle expectations you can subtly lower without causing a break up.

    Some lifestyle expectations you might want to leave well alone, because you know that reducing spending in that area is going to cause more friction than it's worth.

    Other lifestyle expectations might not be as important. Look for creative ways to fill the need that the spending meets.

    πŸ‘‰ Get some Free Money Guides πŸ‘ˆ

    If you're looking for other ways to speed up your debt free journey, grab my Debt Reduction Cheat Sheet and get things moving faster.

    If you really want to stop spending what you don't have, use my Sell First, Buy Later Guide to sell your clutter and turn it into cash!

    Related Posts

    5 Genius Ways To Save Money When You Suck At ItπŸ’Έ

    5 Genius Ways To Save Money When You Suck At ItπŸ’Έ

    Why It’s FUTILE To Try And Keep Up With Big Spenders πŸ’΅

    Why It’s FUTILE To Try And Keep Up With Big Spenders πŸ’΅

    Money Leaks: The Ultimate Guide To Finding And Plugging Them!

    Money Leaks: The Ultimate Guide To Finding And Plugging Them!

    Are You Wasting Money? Introducing The CRAP TO HAPPINESS Scale

    Are You Wasting Money? Introducing The CRAP TO HAPPINESS Scale
  • I like the thought of being mindful about spending. I try to take a step back and think about what I really need/want before making that purchase.

  • {"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

    Page [tcb_pagination_current_page link='0'] of [tcb_pagination_total_pages link='0']

    Preview of the pages in the Leveraged Income Guide.

    DOWNLOAD: A guide to motherhood friendly leveraged income

    Download this free guide to find out:

    - WHAT leveraged income is

    - The DIFFERENCE between passive, leveraged and residual income

    - WHY leveraged income is great for working mothers

    - EXAMPLES of motherhood friendly leveraged income generators

    - Leveraged income CREATION in a nutshell.