88: How to Pay Off Debt When You’re Already Stretched Thin

Are you living paycheck to paycheck and wondering how you’ll ever pay off your debt when there’s nothing left at the end of the month? In this episode of The Money Mom Podcast, host Rachel Coons—mom of four and grocery budgeting mentor—shares practical, encouraging strategies to help you make real progress on your debt, even when your budget feels impossibly tight.

Discover why traditional budgeting advice often falls short, how to shift your money mindset, and the power of small “margin moments” that add up over time.

 Rachel breaks down actionable steps like finding hidden savings in your grocery budget, choosing the right debt payoff method for your family, and balancing debt repayment with living your life.

If you’re ready to stop feeling stuck and start celebrating every win, no matter how small, this episode is for you. Tune in and learn how to create financial peace, one small choice at a time.

Listen now and join a community of moms cheering you on!

xoxo,
Rachel

Where to find me:
Instagram: @heyrachelcoons

Join me for my next LIVE training 'Save $600 On Groceries'!: REGISTER HERE

Chapters

• 0:00 Welcome And Episode Promise
• 1:16 Why Mindset Comes Before Math
• 4:56 Reframing Debt Stories
• 9:56 Small Margin Moments That Add Up
• 13:19 Stop New Debt And Target Groceries

Transcript

SPEAKER_00: 0:00

If you've ever thought to yourself, I would love to pay off all my debt, but there's actually nothing left over at the end of the month in order to do so. This episode is for you. Because the truth is, you can make progress, even when it feels like there's no wriggle room in your budget. It's not about working harder or depriving yourself. It's about shifting how you approach your debt. And in today's episode, we're gonna figure that out with you. So stay tuned. Welcome to the Money Mom Podcast, the show where we empower moms to take control of their finances, break free from money stress, and build a life of freedom, confidence, and abundance for their families. I'm your host, Rachel Coons, mom, money mentor, and your personal cheerleader on this journey. Whether you're here to save money, pay off debt, or dream bigger for your family's future, you're in the right place. Here, we believe that being a mom is already a full-time job. But your role in shaping your family's financial success is just as important. And the best part, you don't need to sacrifice everything to start winning with money. Let's get started. This is the Money Mom Podcast. Hello and welcome back to the Money Mom Podcast. I'm your host, Rachel Koons, Mama 4, grocery budgeting mentor, and your cheerleader on this journey to create financial peace in your home. And today we're tackling a big one that I know so many people struggle with, and it's how to actually get yourself out of debt when you're feeling stretched financially thin. If you feel like, oh my gosh, we're living paycheck to paycheck, there's literally no extra money in the bank account at the end of the month. How am I supposed to tackle debt, specifically high interest debt, when there's just no wiggle room? And one of the things that I am really passionate about is how you don't need to work harder. You don't need to deprive yourself of everything that you enjoy in order to pay off debt. It's actually just changing some simple things in how you look at money, how you experience money, and maybe even changing the way that you budget in order to be able to tackle this once and for all. Here's the thing that most budgeting advice gets wrong. They tell you to start with the numbers. Just go look at the spreadsheets, make sure the numbers are making sense. Once you know your numbers, everything will be fixed. But the truth is that when you're already stretched thin or you already feel like you don't have enough, the numbers are just gonna remind you of that situation. They're gonna remind you how stuck you feel. They're gonna literally, they don't give you answers. You have to start before the numbers, and that's with the mindset of money. Now we dove into money mindset in the last episode. So if you missed last week's episode, make sure you go watch that. That will kind of help you before we get into today's episode. But if you ever find yourself really feeling chaotic and really stressed, what are you telling yourself about your debt? What are you telling yourself about your worthiness, about how you experience money, about how you treat money when you look at the numbers? Because for a lot of people who struggle with debt, that story sounds like, I'll never get ahead, or I'm terrible with money, and that's why I'm in this situation. Or even on the flip side of that, I just need to make more money. If we just had more income, then we wouldn't be in debt and we could pay it all off, and everything would be sunshine and rainbows. But when those thoughts are the ones that are running through your head, it's not giving you power. It's not giving you actual tangible things that are gonna help you move towards the correct actions. You're just gonna continue feeling defeated and shameful and judging yourself before you even begin. So instead, when those thoughts try to creep into your head, try to reframe those thoughts to every little step that I make counts. I am trying to build financial stability one small decision at a time. Or even the fact I'm here listening to this episode today shows me that I care and that I actually want to make a difference. The mindset shifts, the energy, the thoughts around money don't actually erase your debt. But it's gonna help change the energy that you bring to it when you sit down to look at the numbers. And that energy is what allows real change to start happening. So if you haven't done that work first, go listen to last week's episode and really start to shift the energy that you have around money. Now, step two is we're gonna talk a little bit more practical because when you're stretched thin, you probably don't have big chunks of money to just throw at your debt every month. But you do have small little moments, small opportunities to redirect some cash. Maybe that's just$10, maybe that's just$25 or$50 at a time. But when we start to make small intentional changes, you're going to create a domino effect. And when we push over that first domino, which maybe is just a little bit of cash going towards your debt, that's going to breed more action in the future. Maybe that means you cancel a subscription you forgot about. That's another$20 a month that you can put towards your debt. Maybe you're gonna focus on meal planning and shopping the shelf for the next couple weeks and you're gonna save a couple hundred dollars, you could put that towards the debt. Maybe you're gonna choose not to get takeout one night and eat at home instead and put the$50 that you would have spent in takeout towards the debt. Those small little actions, those small, we call them margin moments. Those small little margin moments where you are saving money and having extra money, put it towards the debt. It's going to train your brain to throw money at the debt. And those smaller moments don't maybe sound like much in the moment, but they add up over time. So if we're doing those small little moments once a month and that adds up to$200 a month, that's over$2,000 for the next year. The key is to notice that they're there. And instead of telling yourself, oh, I don't have any extra money at the end of the month, tell yourself, I probably can find some money at the end of the month. Now, step number three is to halt yourself from going into more debt. So if we're stuck in a hole and we're trying to get out of that hole, if we continue digging deeper into the hole, it's going to be harder to get out. So if you are doing something that is continuing the debt, we have to stop it. If you are in credit card debt, stop using your credit card. Do not use your credit card until you are out of debt. We're going to find that extra money. And one of the places that we do that is in our grocery spending. We can find that extra money and throw it towards the debt before we get into any more. And the truth is, most families overspend$500 to$800 every single month on groceries without realizing it. And so that's the number one place I tell people to start. If you want to get out of debt, you don't have extra money at the end of the month, let's just focus on your grocery budget because the money that you save there could be going towards paying off debt instead. In fact, we did our pantry payday experience in the month of November, and we have hundreds of moms that have put their savings towards their debt, and they're continuing to do so with their grocery savings that they're still having. So start with your grocery budget. It's the easiest and flat fastest way to free up extra cash without going out and getting a job or without actually bringing in more money. And if you haven't yet, you can grab my free grocery savings class at heyrachelkoons.com forward slash class, and I'll walk you through the exact method our community uses that they've saved over$2 million in groceries alone in just two years. That's the money that's gonna help you pay off debt faster. Now, step number four is to build a realistic debt plan. Once you've freed up a little bit of margin at the end of the month, you need a plan that feels doable for your family and one that you and your partner are on the same page about. This shouldn't make you feel stressed, it shouldn't make you feel trapped, and it shouldn't make you feel overwhelmed. Now there are two main methods that people tend to use when it comes to paying off debt, and those two methods are either the snowball method or the avalanche method. You can't go wrong with either method. One, the snowball method tends to be for someone who struggles with sabotage and struggles to get in control of their spending. So if you have debt and you want to get out of it, choose one of the methods, snowball or avalanche. Snowball basically means that you start with your smallest debt first, whatever you know, you pull in all of your debt accounts and find whichever one has the lowest number. And then each time you pay off debt, it goes to that lowest number debt first. And then once you pay that off, then you're gonna go to the next highest number and you're gonna pay that debt off. This one will give you a momentum and it will give you wins really quick because we're closing out debt accounts as fast as possible. Now that's one method. The other method is the debt avalanche method, where we basically pull out all of our debt accounts and whichever one has the highest interest amount, that's the one we're gonna focus on first. This method will save you more money in the long term, but it doesn't give you that quite momentum that the snowball method does. But like I said, you could choose which one other one you want as long as you're taking action to do it. Here's what I tell most moms in the Money Mom Club is just pick the one that helps you stay the most emotionally engaged. Because remember, money is emotions. Debt payoff isn't just about the numbers, it's also about consistency and mindset over time. If paying off a$200 storecard gives you a spark to keep going, do that. That spark is worth more than just saving a couple hundred dollars in interest. But the thing that will make it really a lot easier is to make it visual. Don't just have it on your computer, create a chart that you can physically check off as you go when you start to pay off debt. The numbers, create a tracker, create color in the progress, and celebrate those small wins as you start to pay off debt because again, that momentum matters more than perfection over time. Step number five is balance paying off your debt with also living your life. Because the truth is paying off debt can take time, it can take years to get out of debt. And so if you are constantly feeling restricted and you're constantly miserable, you're going to burn out fast. We do not want all or none thinking when it comes to paying off debt. You can pay off debt and still enjoy life. You just have to make decisions along the way as to what matters most for you and what you value the most. Maybe that means you cut back on eating out as much, but keep your kids in their sports programs. Or maybe you skip out on new clothes or a really fancy birthday party, but you still budget for date night every week. You're allowed to make your own version of balance. And balance is key. Balance breeds consistency, and that's what we want over time. You're gonna pay off more debt over time by being balanced and consistent. And then step number six is to keep that energy going every time you make a payment. Step number six is to keep that energy flowing. That's one of the things I love about the Money Mob Club is we are a community of moms who cheer each other on and we keep that energy going. Sometimes it's really hard to do it on your own. But every time you make a payment, every time you cut money somewhere, no matter how small, I want you to celebrate it. Heck, just insta, heck, just send me an Instagram DM and I'll celebrate with you. Because that simple act keeps you emotionally connected to your progress. And if there's anything I want you to know, it's that the emotion matters. Debt payoff is less about the debt itself and more about who you become in the process and who you embody and the energy that you hold. Because a woman who is calm, confident, and in control of her finances is going to get out of debt. So if you're in a season where you feel stretched thin, please hear this. You are not failing. And you have not failed. You are currently just trying to figure it out. Your debt does not make you any less worthy. It doesn't define you. It's just a season that you're in right now and you're learning your way through it. But we can start really small, and those small shifts will start to tip over those dominoes to make even bigger ripple effects later on. Find your margin. Focus on what you can do. Maybe that means just starting with your grocery budget and saving a couple hundred dollars there. Find balance, find consistency, celebrate the wins, and cheer yourself on as you go. That's all I have for you today. Remember, even when it feels tight, your financial story isn't stuck. You're building something powerful, one small choice at a time. I'll see you next week.