How to become Debt Free while on a Low Income

As some of you may know, I became Debt Free in February 2018. During all of that time, I only earned just above National Minimum Wage as a single parent.
Many people told me that I was crazy for even attempting it, that I’d never manage it as a single parent.
All I can say is that I’m glad I never listened to them!

It may have taken me longer than some couples, but the end result was the same, Debt Freedom!

These are the steps I took to become Debt Free while on a Low Income.

1. You have to know your numbers.

This is by far the scariest part, and the reason that many people don’t even start their Debt Free Journeys. It can be really scary to see exactly what you owe to people written down. The reality of that number can be enough to pretend you didn’t see it, and run on the opposite direction, choosing never to look at your debts again.
I promise you, if you have the desire to face this, you won’t be seeing that number for long.

2. Know your Income and Expenditure.

Have you ever thought ‘I don’t know where my money disappears to every month’? This exercise will show you exactly where your money goes!

Next, go through the previous months bank statements. Write down all of your income for the month. This may include things like:

Tax Credits/Benefits
Child Maintenance
Rent from Lodgers/Older Children
Second jobs

Now assign different categories for everything you’ve spent. Examples could be

Direct Debits

Now split all of your expenses into either ‘Necessary’ or ‘Not Necessary’.
So items like Utilities would go into the ‘Necessary’ section, and those cups of coffee you buy in town would go into the ‘Unnecessary’ section.

3. Start Cutting Things Out!

So, from your ‘Not Necessary’ list, you now know what you need to cut out, or cut down on.
Some ideas to help might be

-Invest in a good coffee flask and make all of your ‘on the go’ coffee from home
-Stop buying.streaming films, get Netflix instead
-Reduce/Stop your Sky or Cable subscriptions
-Sort through what clothes you already have, so you don’t buy anymore
-Have a skincare and Makeup audit. Don’t buy any until you’ve used up what you already have
-Think of free things you can do with your children instead of taking them on expensive days out
-Invite your friends over to your house in the evenings instead of going to a bar or pub. If everyone brings a bottle, it works out much cheaper

Whatever it is that you currently waste money on, you can find a way around it, you just need to get creative sometimes!

4. Write Your Budget.

This part is quite simple, and there are plenty of Budget Templates available on Google to help you with this step.
Essentially you write down all of your Income and Expenses, then see what you have leftover.
One of the best Budget Planners I have seen is this one from The Money Advice Service and i have a blog post about it here

5. Have an Emergency Fund!

Whatever is left after your necessary expenses are deducted from your income, gets saved towards a £1000 Emergency Fund (EF). At the beginning on this journey, you only need £1000 as an Emergency Fund, and the plan is to get that £1k as quickly as possible.

How can you make money as quickly as possible?

-Go through your clothes, your children’s clothes and sell what you no longer need or use
-Work extra hours
-Matched Betting
-Get a 2nd Job

To realise the importance of an Emergency Fund, imagine what would happen without it. What will happen when your washing machine breaks down, or your car fails the MOT? What happens if someone drives into the back of you and damages your car?
If you don’t have an Emergency Fund, you’ll end up getting further into debt to cover those types of emergencies, and get further into debt.

6. Sinking Funds.

Now that you have your £1000 Emergency Fund, and written your budget, you should know exactly how much money you have left at the end of every month. At this point, when you are feeling motivated to start paying off our debt, it’s really tempting to throw every penny at debt. But it’s really important to have Sinking Funds.

What are Sinking Funds? They are basically just a pot of money ( either a physical pot, or online) where you save for expected expenses. For example, you know Christmas is on the 25th December every year, it shouldn’t come as a shock!
So instead of panicking in October or November, plan ahead. Decide on how much you’ll spend on Christmas and divide it by how many months until Christmas arrives. So in January you’d divide by 12 and in June you’d divide by 6. Then bank that amount every month to pay for it.

The thing here is to set REALISTIC amounts for Christmas. Pre ‘Debt Free Planning’ you may have spent a huge amount every year on Christmas, but your budget will tell you what you can afford now!
This is the same for all big expenses. Plan ahead and you wont ‘Sink’.

Some examples of Sinking Funds are:

-Car Expenses (MOT, Tax, Insurance, repairs)
-School Expenses (Uniforms trips, bus pass)
-Pet expenses (annual vaccination boosters, emergency vet visits)

Again, depending on your personal circumstances, these may be different from mine and you may have less or more of them.

7. Paying off your debt: Snowball vs Avalanche.

Now, things get exciting! You get to put every single penny towards debt and get started with becoming Debt Free!

But which method should you choose? I don’t think there is any ‘should’ in that question, I believe its YOUR decision, not up to me to tell you.

There are 2 methods
The Debt Snowball and The Debt Avalanche.

Put simply, The Debt Snowball ignores interest rates on your debts and tackles each debt in order from lowest to highest balance. There is some good Psychology in using this method, as you gain traction quickly and get those ‘quick wins’.

The Debt Avalanche is the opposite. You list your debts in order from the highest interest rate to the lowest interest rate, and you pay them off in this order. This method has maths on its side!

Whichever method you decide to use, it’s entirely up to you. Don’t feel like you can’t change your mind either! If you start by using The Debt Snowball but find it doesn’t work for you, it’s perfectly fine to switch to using The Debt Avalanche. Whatever keep you motivated and keeps you on your Debt Free Journey is the best thing.
I personally used The Debt Snowball, as it meant that I paid off some of my smaller debts really quickly. This helped keep me motivated, but some of you may be more ‘maths people’ and prefer The Avalanche.

Here is a better explanation of both methods:

How To Get Out Of Debt On A Low Income

But after writing your budget, what happens if you don’t have any money leftover? Well, the issue is either that your income is too low, or your expenditure is too high. Or it may be both! 
In this case you either need to try working more hours (if you work outside the home already) or if you are a stay at home Mum, then you’ll need to find work outside the home that fits around your husbands working pattern. 
If you are a Single Mum like I am, you’ll need to work outside the home if you don’t already, or work more hours. I understand this isn’t always possible, but these are just guidelines.
 If you need childcare and are worried about the cost, please look at to work out how much better off you will be in work. Despite many misconceptions, I have NEVER been worse off working than when I was on benefits. 

How I meal Plan.

One of the main things I’ve always struggled with, even while working towards getting out of debt, is keeping the food budget in check.
I have 2 teenage boys, and as anyone with teenagers will tell you, they are expensive to feed!

I could (and often did) easily spend £500+ a month on food. But when trying to become debt free I knew I had to tackle this, as it was my biggest expense every month and I hated seeing so much money being spent on it, while food was also being wasted.

So I did what I suspect anyone does in this situation, I had a look on YouTube and watched what everyone else was doing. But to be honest, I didn’t find many meal planners that I could relate to, and definitely none who had dietary issues ( my older son has smell and texture issues with food).

So I needed to come up with a way that worked for me and my family. I developed these really simple steps, and I hope they help you too.

1. Work out how much you want to spend

The first thing I did was work out what was a acceptable monthly food budget for the 3 of us, taking into account how much I wanted to put towards debt, how much my monthly expenses were, and how much food we normally wasted.
I settled on spending £100 per person, per month. So £300 a month. Over time I’ve managed to get this lower, but just concentrate on spending £20 less than you were each month.
This may be more or less than what other people are spending for their families, but as long as it’s less than what YOU have been spending, that’s all you need to think about. There will always be people spending less than you, but comparisons don’t help anyone.

2. Do an inventory.

To avoid food waste, I always try and start by using up what is already in the cupboards, pantry, fridge and freezer before. Not only does this avoid food waste but it saves you money too. I go through the kitchen and write down every bit of food that I have.

3. Write a list of as many meals as you can think of

The next thing I did was to write down on paper as many meals as I could think of that I knew everyone in the family liked. I was aiming for 20, but ended up with 30. When doing this, you want to refer to the Inventory you did, starting with meals you can make from what you have on this list.
This may be something that you need to leave and come back to throughout the day, as I found it quite hard to think of 20 meals just off the top of my head.

4. Look at your schedule for the month/week.

When meal planning, it’s essential to take into account what you are going to be doing for the month/week. On the nights when you are working late, you don’t want to have planned a meal that takes 45 minutes to cook. So what I do is make the quickest meals ( or eat leftovers) on the nights when I don’t get home until late, and make the meals than need  more time and effort of my days off, or on the days when I finish work early.

5. Assign each day a meal

To make this as easy as possible, I make most meals stretch 2 days. So I only have to make 4 meals a week. Any leftovers can be assigned to the days when you don’t get home until late and need to nuke something in the microwave. For example, you could make a Chilli on Monday and have it with rice. Then on Wednesday you could get home from work at 10pm and heat it up in the microwave with a jacket potato and dinner will be ready in less than 10 minutes. Or you can make fish pie on Tuesday and use it to make fishcakes on Thursday. 

6. Go shopping

Don’t be afraid to tweak your meal plan slightly if you see good deals. If you planned to make a roast chicken on a Sunday but once you get to the supermarket you find that Turkey is on offer for cheaper, it makes sense to change it. If you planned to have white potatoes but find that sweet potatoes are on offer and work out cheaper, get them instead.
Another way that you could help yourself when it comes to super quick meals, is to batch cook. 
Batch  cooking is where you make extra portions and then freeze. This means you’ll always have home made ‘ready meals’ available for you. Or you can do this with parts of meals, like home made chicken nuggets. I do this quite a lot with mainly mince based meals but need to restock my freezer as I’ve been slacking on this recently! 
My favourite meals to batch cook are:
Spaghetti Bolognese
Cottage/Shepherds Pie
Sausage Rolls
Pizza Bases
Cookie dough
Finally, the main thing thing to remember with batch cooking is to cook, cool, freeze and reheat according to food safety standards. Foods like rice can be tricky when cooling and reheating, so make sure you know the guidelines around items like these.
Nicola, over at mumonabudget also has a wonderful blog post on Meal planning, and I particularly love her use of transparent fridge magnets to organise her meal plan. Read her blog post  to see her tips on meal planning too.
See you next time!

How to Stay Motivated on your Debt Free Journey.

When people find out that it took 2 years for me to complete my Debt Free Journey, 1 of the most common questions I get asked is ‘How Did You Stay Motivated For 2 Years?’.

The truth is, I wasn’t 100% motivated all of the time. I think motivation is something we have to work on and accept that it wont always be easy.

Find your ‘Why’. 

I would say that for the first 6 months of my Debt Free Journey, I found it quite easy to stay motivated. The novelty hadn’t yet worn off and paying off debt felt great!
I had a very strong list of Why’s

In my experience, keeping your ‘Why’ in mind at all times is really important. It helps to keep you focused and in turn keeps you motivated.

Get Support

Shortly after the 6 month mark, I started to feel deflated. My friends were booking holidays, redecorating their houses and generally doing all the things that I wanted to do but couldn’t afford.
I could have just said ‘Screw it, I’m going on holiday’ but instead, I used this as a lesson in self-discipline and motivation.

It was DIFFICULT! But I carried on. At that time, I joined some Facebook groups dedicated to people paying off debt and following Dave Ramsey’s 7 Baby Steps. These groups really became my lifeline in the following months. In the end, I started my own Facebook group. This has been so helpful for me to stay accountable, complain when I’m feeling sorry for myself, get advice and share tips.

Mark your progress

This isn’t something that I personally did regularly, but I’ve heard that it can help spur a lot of people on. Many people I follow on Instagram (you can find me at ) use Debt Free charts to track how much debt they’ve paid off, and how much they have left to pay. You could make your own very easily if you prefer that.


Make Plans

When it killed me to see the majority of my money going towards paying off my debt, I made plans for what I was going to do with that money once I was debt free.
I researched holidays, made lists of household furniture that I wanted to buy, and those plans got me through some pretty tough times!

Some other ways you can make plans are to write down how things will change in your life when you become debt free.
Maybe you’ll be able to work part time, or be a stay at home mum, or be able to save money in the bank for the first time in your life (this was and still is my plan). Whatever it is, focus on that and let it motivate you.

The truth of the matter is, you wont be motivated every single day. I had weeks and months where I just carried on my journey towards debt freedom because I knew that I’d kick myself if i gave up. I carried on despite hating it. I moaned to my Facebook group…but I just carried on. The frustrating times where I lacked motivation always passed, and so will yours.

I hope this helps someone who is struggling with motivation like i was,
Till next time,

Debt Free…Now What?

Hi, welcome back to Financial Friend.

As some of you may know if you’ve read my first blog entry My Journey towards Becoming Friends with My Finances. at the start of this year, in February 2018, I became Debt Free.
I had been working on this goal for just over 2 years, and I thought that once I had achieved it, things would be different for me.
It has come as a bit of a shock to realise that actually, this is where the journey towards building wealth gets really difficult.

I’m not sure what I thought was going to happen once I became debt free, but in the back of my mind I think I imagined a luxurious lifestyle, being able to spend whatever and whenever I want.
But the truth is, its not like that at all.

I’m a single mum working full time in retail, therefore I don’t have enough money to have a ‘luxurious lifestyle’ even if I wanted to! I do have more ‘spare’ money now that I’m debt free, but I have to admit that I’ve not really stuck to my budget since becoming debt free either. I know, a shocker!

What worries me more is that I KNOW having an emergency fund of 3 months worth of expenses will stop me getting back into debt. But I seem to have lost all motivation recently.

So I know I need to get back on the money saving wagon, and am going to get strict with myself.
I aim to do this by:

-Restart Meal Planning every week. I always meal planned when I was getting out of debt and I swear it not only saved me money and time, but took the stress out of cooking.

-Write a budget. This is crucial to saving money. It will also help me to see just how much money I could be putting towards savings.

For now, those are my main plans going forward, although I’m sure I’ll add to them as the weeks go on. Stay Tuned,

Feeding my Family on a Budget.

During Frugal February, I’ve been trying to eat out less, spend less on food, and eat what I already have in the kitchen.
I have a reasonably well stocked pantry, a safety net that prevents me from panicking, a reminder from when times were not so good for me financially.

During the last few months of my debt journey, I did something called ‘Scorched Earth’. I got the term from Dave Ramsey. What this meant for me, was reducing my food budget as much as possible.

As you may already know if you’ve read my first blog entry My Journey towards becoming Friends with my Finances , I am a single mum with 2 teenagers. As all parents of teenagers know, they have hollow legs and will eat like they’ve not been fed in weeks! So to keep them full and keep the budget in tact can be a lot of work.

I try and focus on a protein and fat rich diet. Fat and protein keeps them fuller for longer, and they also enjoy these types of meals.

For example, a whole large chicken can do us 3 meals each, plus a lunch for me and daily meals for the dog.

On day 1  roast the chicken and we have a roast dinner with all the trimmings (frozen veg keeps this cost low)

On day 2 I strip the chicken of all the meat I can find. This is how much I got from it during February. A whole pasta bowl full of it.

Then I will make a curry with some of it.

On day 3, I normally make a huge chicken and vegetable pie with some of it, plus i have stuffing and chicken sandwiches for lunch.

As you can tell, this gets boring after a while, and its at this point that i start getting fed up with chicken!

Days 4 and 5 are usually eating any leftovers of the meals I’ve mentioned above, or maybe chicken noodle soup if there is enough chicken left.

This is just 1 example of how i feed my family on a budget. I’ll be sharing many more tips such as this in future blogs.