Paying off your debt can be very challenging, especially when it’s high interest rate consumer debt. Owing debt that has built up year after year and left alone to accrue interest that doubles in price may be driving you off the edge. It is evident that having a low income makes it increasingly challenging to finally clean out all of your debt, and start your life anew. Low income results from a variety of a reasons and each reason holding a unique challenge in paying off that debt. Reasons spanning from job loss, low pay, and copious amount of other reasons. Some may beg to differ, but low income does not entirely inhibit your ability for being successful in life. Here are four ways you can pay off your debt despite having a low income.
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Account For And Document Every Dollar Spent
Having success at paying off debt with a low income requires budgeting, tracking your spending, and managing your money. To pay off your debt with a low income, these factors are very important. You must be aware and account for where each dollar is spent. You also should find options to lower any of your current costs at home and everywhere you are spending money.
Consider all options, whether they are big or small to the equation. The only way to pay off you debt with a low income is to consider all factors and cut costs from each. You can look at things like:
- Your housing costs – are you able to save by downsizing, renting or sharing an apartment?
- Transportation – can you take public transportation to save cash on gas or carpool?
- Your energy usage- can you use a less expensive service or cut down on your usage costs?
Some options may be extreme, but this is necessary to pay off your debt with a low income. All options must be assessed and used since there is not disposable income available to spend. All savings must come from what you are paying for now in order to be effective and reach optimal resources. This will help to pay off your debt with a low income and bust the cyclic debt cycle.
Make Your Efforts Cost Effective
If you want to eliminate debt completely, you must find the epicenter of the problem and eradicate it. This becomes pretty challenging with a lower income – but it can be accomplished by lowering the interest rate you are currently paying.
Drowning in numerous credit cards with outstanding balances? Check to see if you are able to transfer the balances to a lower rate card. You can even take out a low rate loan to pay them off. Stuck with student loans? Seek to consolidate them into a lower rate. Finally, just speak with your creditors to see if they can work with you to lower your interest rate. In most cases, they are willing to work with customers to settle debt.
Decrease Food Waste
Your grocery bill can be taking up a big chunk of your monthly spending especially with a low income. You have to be cognizant of each penny that you are spending on food. If you are wasting food, this is money down the drain. The average family spends between $146 and $289 per week on groceries. If you are wasting food, this means you may be buying too much, or purchasing items that you don’t need. So, eliminate the waste and put those savings in your pocket.
Here are a few ways to decrease your food spending:
- Prep and cook your meals for the week
- Take lunch to work
- Eliminate eating out as much as possible
These small tips may end up saving you loads on your food bill, especially when one meal while eating out may cost up to $15. Paying off debt with a low income can be challenging at times, but with small easy steps like this, it could really increase your ability to pay off debt.
Switch Your Perspective
Paying off debt with a low income is a challenge and requires cutting spending, but this can only take you so far before you run out of places to save. Another option is to discover ways to increase your income. Adding more money to the equation is especially powerful in allocating enough money to eliminating debt.
Making money may seem unpromising, especially in a situation where you have a low income, but it is possible. Whether the amount is big or small, it will help you no matter what. Having a positive perspective and believing that it can happen will lighten the situation. Look for part time work, overtimes opportunities, and even odd jobs to bring in strings of cash to help supplement your income.
Do you have a skill you can monetize? If so, that skill can earn you some extra cash. If not, there are many side hustle jobs that require little to no skill, like babysitting, walking dogs or cleaning houses. Find what works for you and utilize the extra money to pay off your debt despite your low income.
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Paying off debt with a low income can be a challenge, but with the right attitude and commitment anything is possible.