6 Tips for Getting Out of Debt on a Low Income

Managing your monthly bills on a lower income can feel overwhelming. But taking control of your finances and paying down on what you owe is entirely doable. We’ve put together six tips to help you create a debt management plan and get started on the road to financial freedom. You CAN do this! Let’s show you how.

Make a Spending Plan Using Zero-Sum Budgeting

Creating a budget can be incredibly satisfying, but if you can’t seem to stick to it, zero-sum budgeting could be what you need to regain your financial footing. The goal behind zero-sum budgeting is to end every month with an account balance of zero. While this might seem counterintuitive, you’ll really be putting each cent toward paying bills, savings, and investments to help you get out of debt quickly.

Start by saving up a month’s worth of expenses in your savings, which is your spending limit for the first month’s budget. Budget every dollar on paper — prioritizing your bills and savings account — until you’ve spent the savings. Since you’ll be living off last month’s income, you’ll start saving entire future paychecks for later use.

Focus on One Debt at a Time

It’s easy to take a chunk out of your debt when you’re focused on paying off one debt at a time. While you’ll still need to make minimum payments on every bill, you can focus on paying more than the minimum on one debt until it’s completely paid off, then do the same until you pay off each one.

So, which balance should you pay off first? Most people choose to tackle their debts through either the avalanche method or the snowball method.

• Avalanche Method: Pay off the loan with the highest interest rate first, then work your way down to the debt with the lowest rate. This will allow you to minimize how much money you spend on interest.
• Snowball Method: Pay off the smallest loan first, then work your way to the largest. Seeing each small debt paid off could give you the motivation you need to tackle larger ones in the future and minimize the number of bills you have to pay each month.

Determine Your Biggest Expenses and Save Where You Can

After you have a good understanding of your budget and how much you need to spend every month, it’s time to look at your expenses and trim the extras.

There are plenty of unique ways to save money each month that can be both easy and fun, such as the following:

• Buy food in bulk and make delicious homecooked meals rather than dine out.
• Choose a day every week to walk, bike, or carpool to work with friends.
• Select an online streaming service rather than cable or satellite TV.
• Explore your local thrift shop rather than shopping at a mall or retail outlet.

Consider Finding Additional Income

Do you know someone in desperate need of a babysitter? Are you from a city where ridesharing is a major form of transportation? Do you love to spend your weekends making crafts or perfecting recipes? Turn your everyday opportunities into some extra income while you pay off your debts.

• Work a part-time job or ask to work overtime.
• Sell handmade goods online or to friends and family.
• Offer services like babysitting or pet sitting.
• Rent out part of your home.

Another way to save is to tackle high-interest debt by transferring your balance to our Classic Card. For a limited time, enjoy 0% APR* through June 30, 2027, on balance transfers that post between January 1 and June 30, 2026. A 5% balance transfer fee applies to each transfer that posts to your account during the promotional period. After the promo ends, you’ll enjoy a low 12.90% APR (subject to change). Learn more at psecu.com/balancetransfer.

Ditch the Credit Cards

If you’re serious about getting out of debt on a low income, it might be time to move away from your credit cards and make the switch to cash.  It’s easy to forget how much you’re paying when you can’t see the money in front of you.

With the rise of digital shopping, it’s gotten easier than ever to overspend. Stick to the money in your wallet and use your zero-sum budgeting skills to decide how much cash to take with you when you’re out and about.

Explore Home Equity Options for Debt Consolidation

If you’re a homeowner, one option to help manage your debt is leveraging the equity you’ve built in your home. A home equity line of credit (HELOC) or home equity loan can allow you to consolidate your high-interest debts into one manageable monthly payment at a lower interest rate. This can be a smart way to reduce your overall debt burden while making your monthly payments more predictable.

PSECU offers competitive rates and flexible terms on home equity products, so you can take advantage of your home’s value to pay off debt faster and save money in the long run.

Keep in Touch with Creditors

Lenders are people just like you who understand what it’s like to pay off debt. If you’re having trouble paying your monthly bill, give them a call to ask what debt management services they have available.

Talk to your creditors as soon as you begin to struggle, rather than waiting for them to contact you because you haven’t paid your bills. They may understand your situation and could even have the ability to reduce your payments temporarily while you work through a tough financial situation, like a medical emergency or job loss.

Ways to Manage Your Debt on a Budget

From working odd jobs to stopping by the ATM before going to the grocery store, there are plenty of ways to save while on a low income.

Are you working toward conquering your debt? Check out our resource center to learn more tips and tricks on debt management in every stage of life.

*PSECU Visa® Classic Card/Visa® Alumni Classic Card:  Promotional Visa Balance Transfer  Rate Offer– PSECU is offering a promotional rate of 0.00% APR on all Visa balance transfers that post to your account on January 1, 2026 through June 30, 2026 (“promotional period”). Any Visa balance transfers that post to your account after June 30, 2026, are not eligible for this promotional rate offer. The promotional rate will continue to apply to Visa balance transfers made during the promotional period until June 30, 2027. Thereafter, any remaining  unpaid portion of your original balance transfer(s) made during the promotional period will be subject to the current APR for balance transfers, which is 12.90% APR as of 01/01/2026 and is subject to change at any time. A Balance Transfer Fee equal to 5% of each transfer will be charged when the transfer posts to your account. This fee is separate from any interest or other charges. The total of the balance transfer amount and the Balance Transfer Fee cannot exceed your available credit limit. APR  denotes Annual Percentage Rate. Visa balance transfers are limited to the available credit of your Visa credit limit. PSECU Visa Business Cards are not eligible for this promotional rate offer. Payments will be applied as stated in your Visa^® Classic, Visa^® Alumni Classic, and Secured Visa® Consumer Credit Card Agreement and Disclosure. A minimum of $250 must be requested for balance transfers through digital banking. The 0.00% APR  promotional offer cannot be used to pay off any PSECU loan or be made payable to cash, yourself, any joint owner(s), or co-maker(s). Balance transfers access credit under the terms of your Visa^® account as stated in the Visa® Classic, Visa® Alumni Classic, and Secured Visa® Consumer Credit Card Agreement and Disclosure.