How to Put an Extra $500 Towards Debt on a Modest Income

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Repeat after Me: “I have everything I need to make this work.”

We all know it’s not easy to pay off debt, but it’s possible. I don’t know about you but I’m sick of seeing these remarkable debt pay off stories from people who already make an impressive income. You know what I’m talking about. They’re the blog posts, titled “How I paid off $10,000 in a month” or “The Crazy way my husband and I slayed our mortgage in 9 months” or “Do what I did and pay off debt in less than a year”. Sure they are impressive feats and inspiring, but they turn out to be a big let down once you find out they were already bringing in six-figure incomes. Or they just happened to have $20,000 in disposable income or complete frivolous spending. Whatever the reason, it’s a letdown when you realize the reality of the situation. Plus, it’s not always best for your mental health.  

Beyond that, the most popular debt payoff stories start by telling you to cut back on everything and end with shaming you for having a life. Supposedly, going to restaurants when you have credit card debt or student loans is unfathomable. And having a big wedding is just irresponsible. Contrary to what the critics say, making sacrifices isn’t synonymous with deprivation. Though I wouldn’t call myself financially free, I’d like to pay off debt without having to give up all of life’s pleasures.
pay off debt I’m not exactly comfortable sharing my income, but I can tell you I’m not rich. With that said I’m not poor either. Either way, I felt it was my duty to share with you how I happened to put an extra $500 towards my debt in March with a modest income. From my breakdown you’ll see I didn’t get a sudden influx of money nor is another job involved. All I did was modify my budget, watch my spending, practice creativity, and got a little resourceful.

How We Found Extra Money

To be honest, there really wasn’t that much extra money coming in. We just became conscious of how we allocated money. For example, we implemented my price match guarantee method. For every unnecessary purchase we made that was $10 or less, we applied that same amount towards debt. You’ll notice several times in which we ate at McDonald’s or Popeyes from the list. We know we shouldn’t have purchased food when we had food at home, so we made sure we applied the same dollar amount toward debt. The little bit of extra money we did find, came from cleaning out my home and finding items I no longer needed. After donations, I sold a purse I didn’t like to Platos Closet and sold a whole case of wine bottles on a Facebook yard sale site. I also have to note that I took a chance and gambled $5.00 in Atlantic City – something I don’t normally do. Luckily,  I won $25. (I also want to point out that I still enjoyed life throughout the month.) You don’t have to deprive yourself to pay off debt.

When shopping online, the apps Ibotta, Mypoints, and Swagbucks became my best friend. I earned a decent amount of cashback from items I was planning on purchasing anyway. As soon as the money from those apps hit my Paypal account, they went straight to debt. (Seriously, you have to be crazy to not take advantage of this. It’s a great way to earn extra money for debt pay off. Sign up for Ibotta here, Swagbucks here and Mypoints here.

I’m fortunate to live close to an ivy league school and have the smartest, most adorable baby ever. It only made sense that I took advantage of that too. I took surveys from researchers at the university whenever time allowed and signed up Little Prince at the Princeton Baby Lab. Don’t worry; there were no probes or dyes applied to my baby. They were just simple learning and listening tests to see what babies understand. It’s all actually very interesting.

Where I Cut Back

You’ll notice that I made no mention of cutting cable. Though it’s something I’d love to do to save money, my husband is not too fond of the idea. Instead, we made sure we cut back in other ways. We modified our diet greatly which not only helped us save money but aided our health as well. For example, for the entire month of March my husband and I only drank water minus a few days we had tea or gingerale for slight tummy aches. We also tried to cut out snacking on overly processed food by keeping healthy snacks around. Every Sunday, I prepared a large fruit salad which served as a snack, breakfast or lunch time treat throughout the week. Doing this stopped us from snacking impulsively or spending money on costly junk food. Subscribing to Dr. Ian’s Shred Power Cleanse by eating salads and drinking smoothies also did wonders for our budget and health. And of course, we made sure to make all of Little Prince’s baby food instead of purchasing costly jars of baby food. We limited all purchases to those of necessity. So if it wasn’t grocery, gas, baby or work related, we didn’t spend money on it.

When it came to groceries, I vowed that I wouldn’t purchase any nonessentials over $2.00. That means that all those calorie-packed processed foods, juices and more stayed on the shelf since they were more than my $2.00 budget and completely unnecessary. However, I continue to buy cheese, milk, fish, eggs, bread even if it is more than $2.00. And for every item we came close to purchasing but didn’t, the dollar value was applied to debt as well. For example, I came close to purchasing a shirt I liked at Target for 16.99. I realized I didn’t need the shirt so instead I put it towards loans. The same applies to my temptation to purchase a Snickers for $.89. (Unfortunately, I eventually caved and bought the Snickers a few days later. I guess I’m weak!)

Lastly, while cable seems like it will be here to stay I did cut my subscription to Ipsy. It still hurts sometimes, but I realized it’s best for my financial future. Since I was already shelling out $10 a month on my Ipsy bag, I just have $10 automatically applied to my student loans on the first of the month.

Terri’s Extra Payment Schedule and Breakdown

March 1st – $10 dollars from Ipsy

March 2nd – $25 from Mypoints

March 2nd – $8.50 from eating out

March 5th $6.40 from selling items at Platos closet

March 6th. $16.99 from shirt not purchased

March 6th – $10 from survey

March 7th – $.87 from snickers not purchased

March 8th – $60 from sold wine

March 9th – $.89 from snickers purchased

March 10th –  5% of a paycheck which amounted to $106.20

March 11: $5.35 Mcdonalds

March 13th – $10 from Baby Lab

March 13 – $67.00 – regular monthly payment

March 15th – 5% of a paycheck which amounted to $6.42

March 16 – $25 from Ibotta

March 23 – $25.00 from gambling at Atlantic City

March 23 –  $86.87  – 5% of paycheck

March 28- $28.30 Zumba

March 28- $5.35 – not purchasing chicken nuggets

March 30 – $10 user testing Total: $514.14

Explanation of Breakdown

You’ll see that I put money towards debt almost every day – sometimes multiple times a day. This was because I didn’t want to risk spending the money elsewhere if I kept it around for too long. So as soon as I found extra money I put it straight towards savings or a loan.

How You Can Make It Work for You

The whole point of this post was to show you that regular people earning regular people income can put an extra $500 towards debt in a month. It only makes sense I show you how to do it too. Maybe, $500 isn’t doable for you right now and that’s ok. Maybe you can start by putting an extra $50 or $200 towards debt and you’ll slowly work your way up to $500.

  • It sounds redundant, but start looking at where your money is going. Maybe you’re paying for things you really can live without. Sure, everyone reading this may not subscribe to Ipsy but maybe you are continuously paying for meal prep kits you could do without. What you normally spend and eliminate that can be applied to your loan or even an emergency fund.
  • More importantly, look up efficient ways to make more money. Contrary to what the out-of-touch financial gurus say, your problem is likely that you don’t make enough money/underpaid as opposed to frivolous spending. Get creative to bring in more money. In my case, I made an extra $30 for subbing someone else’s Zumba class.
  • Implement my price match guarantee system
  • Sign up for every cash back app and website you can think of. That includes Shopkick, Mypoints, Receiptpal, Receipt Hog, Swagbucks, Rakuten, Ibotta and more.
  • Research focus groups in your area. In my area, I frequent Princeton Consumer Research, Johnson & Johnson, and Princeton University. I suggest contacting psychology departments in your area to see if they need test subjects for studies.
  • Do some spring cleaning and sell well-cared for, unwanted clothes to your local Platos Closet, ThredUp, or Facebook yardsale sites.
  • Make your willpower count. If you don’t purchase something you planned on buying, apply it to debt. This was HUGE in putting extra money in to help pay off debt.
  •  In my case, I made an extra $30 for subbing someone else’s Zumba class.
  • Sign up for User Testing and make up to  $10 for completing a survey on website functionality.

I won’t lie to you and say that doing this was super easy. But I will say it was painless for the most part. Remember, what you say to yourself is essential to what will make this successful. Don’t tell yourself that you can’t do something similar because you’re not making six figures. Instead, tell yourself that you have money coming in and you’re positive you can find a solution that works for you.

Regardless, I only hope that it helped give you ideas on how you can put a lump sum of cash towards debt on any income. Paying off debt doesn’t have to be only reserved for those with bigger incomes.

What is the most you ever applied to debt in one month? 

TERRIfic Quip: Income is just a number. It’s what you do with it that matters.

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17 Comments

  1. These are really smart cut backs! You got me to thinking I could really cut back on Starbucks. Average at least 5 days a week $5 bucks per beverage I could save a minimum of 100 dollars right there! Thanks for the inspiration!

  2. I did a lot of mini hustle things like cash back and survey sites to pay off debt. My final debt is my mortgage and I’ve been putting an extra $1K a month to it. It takes dicispline but it’s possible.

    1. Good for you! An extra $1,000 each month is impressive. Yes, some good ole will power and a few reminders of why you are doing this is all you need to make it work.

  3. This is some vital information that we all can utilize to pay off our debt. Once I stared analyzing my unnecessary purchases it was easy to start save an extra $150 a month.

  4. I’m glad I read your post because for the past two weeks my husband and I have been trying to figure out a new budget plan so we can start saving more money. It seems like every time we try something comes up. I will definitely start looking at where our money is going, i.e. eating out and unnecessary spending. Really great points!

  5. I love how you added the money from something you did not purchase to your list. That is such a great idea. I’m going to start doing that.

  6. This is great! So true that when you really look at your spending, there may be a lot of small things that could be big savings in the end. I did cancel my beloved Ipsy subscription for about a year at one point to help save money. I reactivated it when I reached my goal lol!

  7. I loved this! I am always looking for money, savings, and debt reduction tips. This is a great reminder to pay yourself first and to get out of debt quick especially if you are on a fixed income.

  8. Wow this shows that even little bits can make a difference over time. These are great pieces of advice and I’m definitely going to use this!

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