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How to get out of debt when you're broke

If you’re trying to figure out how to get out of debt when you’re broke, you’re not alone. More than 87% of Americans have debt. But chefs are particularly vulnerable to debt because they are traditionally overworked and underpaid.

If this describes you, your debt is relentless and will follow you (I know you already know this) until you do something radical to shift your circumstances you’ll continue to sink.

If debt is a word that describes your level of financial fitness, you can’t afford to wait another day to change what you’re doing, how you’re doing it, or who you’re doing it for.

Yep, I said it. If you’re overworked and underpaid and have debt, now’s the time to change it. FAST. In last week’s blog post I shared the four reasons to start a private chef business, which included shaking debt. (To be honest, winning the lottery might be a better way to shake debt but it’s not a reliable plan for securing your future or your retirement.)

You’ve got to act now if you want to get out debt even though you’re broke!

Did you hear me? NOW, chef!

Here are the top four ways you can get yourself out of financial deep water within just a few weeks (faster if you light a fire under your bum!)

Step #1: Sell your stuff to get out of debt. 

This is the simplest way to make some extra dough to get out of debt faster. This is obvious but it’s also one of the most underutilized methods. Truth is, you’ve got stuff lying around you don’t need or use. You may even have a storage unit that’s costing you to hold the stuff you don’t use. When you have debt and stuff crowding around you that you don’t use it’s like having an anchor around your heels. Time to fix that. Sell your stuff.

  • The last time I held a garage sale I pocketed $950 for ONE day’s work AND cleared out space in our closets and basement – without getting rid of anything sacred or currently useful.
  • Last month I listed four pieces of furniture that were sitting in my attic and put over $500 cash toward a bill.
Sell your stuff -- get out of debt

If you can pay off a few debts and lighten your load in the process, do it. Your vintage electronics and that brand name leather jacket are not bringing you peace. Craigslist and Facebook Marketplace are great places to offload these treasures.

Step #2: Spend less money to prevent more debt.

Duh, right? Chances are you’re thinking the way to get out of debt faster is to stop eating out and buying toys. Discretionary spending is one part of the equation, but the money that’s flowing out in the form of monthly bills is what I’m talking about – the phone bill, cable, car insurance, and more. This is something most people rarely question and one way to make money is to stop paying as much for the things you already buy.

  • At the beginning of 2019 I did an internal audit of our family expenses and dropped them by over $700 a MONTH just by shopping for better deals on the things I already spend money on such as our phone, cable, and car insurance. Really!
  • At the same time I did an internal audit on our business, HeyChef!, and reduced our monthly operating expenses by 40%. Forty percent! By cancelling some services and repricing others the result of both efforts was a shift in net profits by a whopping $60,000 annually!
Lower your bills to get out of debt

Start calling those customer service numbers on the bills you pay every month and ask them these three questions: 

  1. How they can lower your bill without reducing your services 
  2. How you can get more services for the price you’re paying now, and 
  3. What they’re willing to do to keep your business. 

Here’s a tip: if they are unresponsive, ask to be transferred to their retention department, and, yes, every company has one. Call one or two a day and by the end of the week you’ll have reduced your expenses big-time. You’ll be amazed!

Step #3: Budget your money so it works for you.

Most people work for money instead of making their money work for them. What’s more, people are often misguided by the greatest misconception that if they simply made more money their financial problems would be solved. The fact is, nothing could be further from the truth. People who are living beyond their means now are likely to always live beyond their means – unless they make a conscious shift in the way they think about money.

If you can’t put your finger on exactly where you’re spending and how much you’re spending, make a list. Track your expenses for a month. After that, set a goal to reduce the leakage. If you play it like a game, it’s fun because every small victory leads to greater freedom from the burden of debt.

Few things feel better than financial freedom.

Step #4: Make more money without making things worse.

Make more money to get out of debt

Making more money is indeed one way to get out of debt when you’re broke. However, a lot of chefs actually worsen their financial health by skipping strategies 1, 2 and 3, and focusing on this step alone. Give a little thought to these common mistakes so you don’t fall into their trap.

  • Most chefs make the mistake of thinking they should get a different job that pays more money per hour. Problem is, when you trade your hours for dollars you cap your income when you reach exhaustion,or when you hit the pay ceiling for chefs in the restaurant industry. A $1 per hour raise is only about $40 more per week. This will not make a significant dent in debt. You need to swing your income by hundreds of dollars, not tens.
  • Another mistake chefs make is thinking that getting a second job is the solution. Problem is, there are only so many hours in a day and at some point you have to sleep, right? Uber or Lyft are fine for making some side cash for Christmas presents, but this tactic won’t change your life. You may even get you out of debt but if you don’t make real changes, you’ll find yourself right back in debt the next time life hits a snag. You need a real solution.
  • And the best way to make things worse is to deeper into debt by investing get rich quick schemes. House flipping, day trading, retail internet sites often require large upfront costs of money and time. Not only are these endeavors incredibly risky, many of them don’t work because too many factors are outside your control, experience, or knowledge. In my experience any financial proposition that promises to be the “answer to all your dreams” ends up gathering dust on the bookshelf. There’s a name for this kind of self-help. It’s called shelf-help.

Side Hustle #1: Become a personal chef –it’s the best way to make money.

Stick to what you know. It works.

You’re a chef, and a damn good one. So, if you have debt, if you’re sick and tired of being sick and tired, and if you’re ready to finally, and permanently, change the trajectory of your future invest in yourself. 

Follow steps #1 and #2 – sell some stuff and cut your expenses. That will give you breathing room. Next, live by step #3 – create a budget, stop the leakage, and set goals to trim your expenses. This will give you a concrete path to build a new, practical, and very rewarding future doing what you love. Bringing us to step #4 make money without making things worse. This is where creating the perfect side hustle comes into play.

My experience is the path of becoming a personal chef or starting a private chef business is the number one opportunity to elevate your career, especially now (see my prior blog post about white space). The reason a personal chef business is better – way better — than a restaurant is because: makeyour 

  1. Personal chef businesses require little to no investment, 
  2. When done correctly there is huge potential to be profitable from day one, 
  3. A personal chef business utilizes your current professional skills and talent, and 
  4. Being a persona chef allows you to spend time doing what you love most – making people happy with your food! 

I’m not saying this is easy stuff, but it is simple. In just a few weeks you will be prepared to step forward and set yourself up to make more money doing what you love.

How to get out of debt when you’re broke is tough, but it is also immensely rewarding. 

Personal chefs make extra money

You heard me right. Chef, if you’re up to your eyeballs in debt you can start getting out of deep water now. Follow these four steps AND start a private chef business as a side hustle. You will 

  • Generate cash to help get out of debt
  • Place your career on a path with a more secure future than being at the whim of a restaurant employer
  • Make money without having to trade more hours
  • Permanently shift your financial future

I’ve seen it happen to lots of chefs. There is a way out of the hot water you’re in. Once you establish yourself, you might even find that your side hustle left you debt free and with a new thriving personal chef business.