How Do I Cover Basic Living Expenses When Managing Credit Card Debt?

Key Takeaways 

Focus on essential needs like food, housing, and utilities while reducing unnecessary purchases.

Establish a structured budget to prioritize needs vs wants and stick to it.

Consider community resources and government assistance that provide help with food, housing, and utilities.

Investigate professional credit counseling from a non-profit agency for personalized debt management to reduce your monthly credit card payments.

Explore side gigs and freelance work, sell unused items, or ask for extra hours at your current job. Even short-term boosts in income can help you stay afloat while paying off debt.

How to Cover Basic Living Expenses When Managing Credit Card Debt?

When credit card debt is weighing you down, managing your daily expenses can feel overwhelming. So, how can you effectively cover the essentials when managing credit card debt? Most experts recommend focusing on essential needs and reducing unnecessary spending. Basically, examining your spending habits and looking at wants vs needs, and keep in mind that debt is temporary, you won’t always have to live this way. 

You’re Not Alone 

Please know that you’re not alone in facing this challenge. In 2024, for the first time since 2009, the FINRA Foundation’s National Financial Capability Study revealed a decrease in the number of Americans who didn’t find it hard to cover their bills and expenses. This figure dropped from 54% in 2021 to 44% in 2024.¹ However, the survey also indicated an increase in individuals making only the minimum payments on their credit cards, as well as those incurring late fees for missed payments, compared to 2021.

Many individuals and families are balancing the struggle between repaying debt and managing their everyday expenses. First, we must understand the difference between needs and wants so that we can adequately pick what are essential expenses to focus on.

Understanding Needs vs. Wants 

The first step in managing expenses involves distinguishing between essential needs and discretionary spending. Needs are the non-negotiables, such as food, housing, utilities, and transportation. Conversely, wants are non-essential items like dining out, entertainment, or luxury purchases. It’s important to evaluate what you can do without, such as foregoing a paid streaming service while ensuring you pay your electric bill. Transportation for work is necessary, whether it’s gas, bus, or train fare, but opting for a luxury rideshare is not. Compiling a list of essentials provides a starting point, as it may reveal expenses that aren’t truly necessary.

Remember The Goal 

While nobody likes to cut expenses, it sometimes becomes necessary to achieve the ultimate goal of debt freedom. It’s crucial to prioritize making payments on credit card debt, no matter how challenging it gets. By focusing on essential needs first, you can ensure that your basic requirements are met before addressing discretionary spending. This approach helps maintain financial stability and keeps you on track toward managing your expenses effectively.

Budgeting Tips From A Professional

“I always tell my clients to spend less than they earn and to pay themselves first (put money into savings when they get paid). I also remind them not to justify paying for wants before they have the money in their account. They need to plan for seasonal expenses and communicate their budget with their loved ones.”

-Mathew Richards, Certified ACCC Credit Counselor

Creating a Budget to Prioritize Spending

A well-structured budget is crucial when you’re in debt. Start by listing all sources of income and categorizing your expenses into essentials and non-essentials. Allocate funds for essentials and see where you can cut back on discretionary spending.

1. Track Your Spending: Use apps or a simple spreadsheet to keep an eye on daily expenses. This visibility helps in making informed decisions.
2. Set Spending Limits: Establish limits for each category in your budget. For instance, cap your dining out budget to a fixed amount each month.
3. Review and Adjust: Your budget should be as flexible as your life is. Regularly review your budget to identify areas where you can save more. Adjust as necessary to stay on track.

Are There Community Resources I Could Use for Financial Assistance?

When financial resources are tight, community programs can be invaluable. Many communities offer assistance for essentials like food, housing, and utilities.

• Food Assistance: Programs like SNAP or local food banks can provide groceries at no cost or at a reduced price.
• Housing Support: Organizations like HUD help those struggling with rent or mortgage payments.
• Utility Assistance: Many utility companies offer programs to help reduce bills for low-income families. You can also find assistance through the government, if you qualify. According to usa.gov, “The LIHEAP and WAP programs help pay for heating, cooling, and home weatherization.”²

Where Else Can I look for Financial Assistance?

Consider looking into local community centers or nonprofit organizations that may offer additional support services, such as free financial literacy workshops or job placement assistance. Libraries often host events and provide resources that can aid in improving your financial knowledge and skills.

Furthermore, some faith-based organizations and charities run programs to assist with clothing, school supplies, or emergency financial assistance. These can be a lifeline when unexpected expenses arise. 

Can I Contact My Local Government to Help Me Find More Resources?

Yes, don’t hesitate to reach out to local government offices, where you might find more information about state and federal assistance programs tailored to your specific needs. By tapping into these community resources, you can alleviate some financial pressures while working towards long-term stability.

What Are Some Debt Payment Strategies? 

Strategic payment methods can accelerate debt reduction. Consider the snowball or avalanche method:

• Snowball Method: Focus on paying off the smallest debts first while making minimum payments on larger ones. This builds momentum and motivation.
• Avalanche Method: Prioritize debts with the highest interest rates, saving more money in the long run.

Both methods have their advantages, so choose the one that aligns with your financial goals and personality.

Seek Professional Guidance Through Credit Counseling 

Professional guidance can be a game-changer when you’re buried in debt. Credit counseling services, particularly those offered by nonprofit organizations like American Consumer Credit Counseling, provide invaluable resources and support. ACCC offers one-on-one counseling sessions, and debt management plans to help you navigate your financial challenges.

• Debt Management Plans: These plans consolidate your debt into a single monthly payment, often with reduced interest rates.
• Financial Education: Gain insights into managing your finances, avoiding future debt, and building financial resilience. The goal is not only for you to become debt free, but to stay debt free.
• Personalized Advice: Counselors provide tailored judgement-free advice based on your unique situation, helping you make informed financial decisions.

Exploring Income-Boosting Opportunities 

Increasing your income can ease the burden of debt and provide more income for essentials. Consider side gigs or part-time work that fits your schedule. Platforms like Upwork or Fiverr offer freelancing opportunities.

1. Freelancing: Use your skills in writing, design, or programming to earn extra income.
2. Part-time Work: Retail or hospitality jobs often offer flexible hours to supplement your primary income.
3. Online Tutoring: If you have expertise in a subject, online tutoring can be a lucrative option.

Don’t overdo it. Only sign up for a side-job if you have additional time, strength, and brain power. Burnout can happen to anyone overwhelmed and overworked. According to Moira Lawler, “Burnout is hard to shake once it sets in, and it can lead to feelings of exhaustion and even complete hopelessness.”³ If you begin to feel anything like this, it’s important that you take a step back and find a way to deal with your stress, like professional help or even a support group.

Managing Stress and Maintaining Well-being 

Being in debt is stressful, but managing stress during this time is crucial. Maintaining your mental health can enhance your ability to tackle financial challenges. Here are some tips to protect your mental health from the American Psychology Association:

• Mindfulness: Techniques like meditation or yoga can reduce stress and improve focus.
• Regular Exercise: Physical activity releases endorphins, which help improve mood and reduce anxiety.
• Adequate Sleep: Ensure you’re getting enough restful sleep to recharge and face daily challenges with a clear mind.
• Maintain a Balanced Diet: Prolonged stress can trigger the release of cortisol, leading to cravings for sugary and fatty foods. Aim for a varied diet rich in vegetables and fruits.⁴

Paying your essential expenses while paying off credit debt is possible

Navigating the complexities of debt while covering basic expenses is undeniably challenging, yet it’s a journey that many are undertaking, often with similar struggles and triumphs. Remember, you’re not alone. By focusing on essential needs, creating a thoughtful budget, and exploring community resources, you’re taking powerful steps toward regaining financial control.

Frequently Asked Questions

1. What are essential needs versus discretionary spending?

Essential needs are non-negotiable expenses like food, housing, utilities, and transportation. Discretionary spending includes non-essential items such as dining out, entertainment, and luxury purchases. Focusing on essential needs first ensures your basic requirements are met while managing debt.

2. Are there community resources available for financial assistance?

Yes, many communities offer programs for essentials like food, housing, and utilities. Programs like SNAP, local food banks, HUD for housing support, and utility assistance programs can provide significant relief. These resources can free up funds for other necessary expenses.

3. How can I create a budget to manage my expenses better?

Start by listing all income sources and categorizing expenses into essentials and non-essentials. Allocate funds for essentials and reduce discretionary spending wherever possible. Regularly review and adjust your budget to match your changing financial situation and priorities.

4. Why should I choose credit counseling from ACCC?

Credit counseling from American Consumer Credit Counseling (ACCC) offers personalized support to help you manage debt effectively. ACCC provides one-on-one sessions, debt management plans, budgeting help, and financial education resources. Their counselors offer tailored advice to help you understand your financial situation and make informed decisions, guiding you toward a debt-free future.

If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.

Resources:

1. FINRA Foundation- National Financial Capability Study. 2025.
2. GOV- Get help with energy bills.  2025.
3. Moira Lawler- Burnout: Tips for Coping When You Can’t Just Quit.  2023.
4. American Psychological Association- 11 healthy ways to handle life’s stressors.  2024.