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How to Reduce Debt on a Shoestring Budget

Are you one of the many Canadian women who are operating on shoestring budgets? If you’re successfully getting by each month through careful planning and minimal spending, but you’re also wishing you could reduce your debt, there’s good news. It is possible to get rid of your debt even when you don’t have much money coming in.

Canadian women are more likely than men to have a low income. In The Economic Well-Being of Women in Canada, a report prepared by Statistics Canada in 2018, it states that women’s vulnerability to low income is the result of:

  • Being paid less than men with the same qualifications, even when they work the same number of hours
  • Overrepresentation in low-paying occupations
  • Caring for children and elderly or disabled family members
  • Reducing their work hours or taking time off to care for family


Statistics Canada also found that single mothers make an average of $27,900 less than single dads. Their average net worth is less than half of the average net worth of single fathers.

Women aged 65 and up are also more likely to live on a low income than men of the same age.

Our 2018 survey on affordability and debt revealed that women are more likely than men to struggle with affordability and to carry significant debt. So it’s not surprising that many women on a low income are looking to reduce debt and the stress that comes with it.

How women can reduce debt, even on a low income

View debt as a challenge. Looking at your debt as a hurdle you can strategically overcome can help you deal with it.

With a different perspective, getting rid of debt becomes a goal that you’re determined to reach, and a priority when deciding what to do with your money.

Create a better budget. If you occasionally turn to credit cards to make ends meet, your budget might not be working. Take another look at it to identify which areas you need to spend less in.

Use a cash budget to ensure you stay on track. Create an envelope for each category in your budget and place the cash for each category in the envelopes. This will help you see exactly how much you have to spend so you can make more informed buying decisions.

Save, save, save. As a woman on a low income, you’re probably already looking for bargains and using consignment stores and thrift shops.

But have you thought about the “pink tax”? Many women’s products are more expensive than similar products for men, and often there’s less of the product. The cheaper versions are just as effective and you’ll save money.

Simply Frugal is a great resource for finding coupons and deals across Canada.

The important thing is that you put the money you save toward debt reduction. Start with your smallest debt and enjoy watching it disappear, even if that happens slowly. If you consistently use some of your savings this way, you’ll eventually eliminate the debt and can tackle another.

Get professional advice. If you’re already living as frugally as possible and can’t find any extra cash for debt reduction, visit a Licensed Insolvency Trustee (LIT). An LIT will review all available debt options and solutions to help you get out of debt, then help you choose one that works best for your situation.

Making minimum payments month after month, year after year, is going to keep you trapped in debt. Reduce your stress, and your debt, by working strategically towards paying it down sooner.

Are you reducing debt on a low income? What have you done to make that possible? Tell us your story on Twitter. #LeaveDebtBehind #WomenAndMoney #DebtTips

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