How To Pay Off Debt Fast With Low Income -13 Genius Tips
Want to know how to pay off debt fast with low income? These are 13 tested and proven ways to get out of debt faster when you have less money.
Being debt-free can seem like such an impossible financial goal to achieve especially when your income is low.
However, you can achieve this financial goal if you decide to sacrifice a few things for a short period, face your debt head-on instead of acting like it’s not there and make necessary financial changes.
If you have any one of these questions: how to pay off debt fast with low income, how to be debt free in 6 months, how to pay off debt with no money, creative ways to pay off debt, and how to get out of debt with no money and bad credit, you’re in the right place!
After reading this post, you will be a pro, and extra prepared to start tackling your debt the right way and will be on your way to living a debt-free life!
Just keep in mind that change is necessary if you want to eliminate debt in your life.
So after going through these 13 tips, commit to applying these things in your life starting today instead of going back to old habits that made you get into debt in the first place!
This post is made up of two parts:
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Part 1: How to get out of debt fast with low income in 3 simple steps
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Part 2: 10 Frugal living tips to help you get out of debt even faster
This post is about how to pay off debt fast with low income.
How To Pay Off Debt Fast With Low Income In 3 Simple Steps
Step 1 – Figure out how much debt you have
If you have been avoiding thinking about your debt, it’s time to face the problem head-on. The first step to paying off your debt is assessing the amount of debt you owe.
If you have several types of debt, you’ve probably lost track of how much debt you have altogether, and understanding these numbers is an important first step.
This is because you cannot pay off your debt or put together a debt repayment plan that works if you don’t know how much debt you have.
So take some time and make a list of all your debts and their respective due dates, interest rate, and the minimum monthly payment.
The minimum monthly payment is the smallest amount you can afford to pay on your debt, which is due every month.
For this step, you can use bank statements, recent billing statements, and your credit report to ensure that you don’t forget anything.
Step 2 – Put together a debt repayment plan
After figuring out how much debt you owe, it’s time to put together the right debt repayment plan. Here are two main debt repayment strategies:
1. The snowball method
With the snowball method, you will focus on paying off the smallest debt first, regardless of the interest rate, while making minimum payments on the rest of your debts.
The smallest debt is usually the one you can pay off quickly with the help of any extra funds you may have or a side job.
Once your smallest debt is paid off, the money that was going into it will be put towards paying off the next smallest debt, and you will continue to make minimum payments on all your other debts.
This process will continue until all your debt is gone.
2. Debt avalanche
Unlike the snowball method, which focuses on paying off the debt with the smallest balance first, the debt avalanche method focuses on paying off the debt with the highest interest first.
With this method, you will put any extra funds towards paying off the debt with the highest interest first while making minimum payments on other debts.
Once this debt is paid off, you will move on to the next debt with the highest interest rate and continue making minimum payments on every other debt. You will continue this process until all your debt is paid off.
While the debt avalanche method will save you more money in the long run, the excitement of getting rid of your smallest debt, using the snowball method, will motivate you to get rid of bigger debts as well.
Whatever debt repayment method you decide to use, make sure that you stay consistent and stick to it.
Step 3 – Spend wisely
After choosing the right debt repayment plan, it should become your top priority.
When you’re in the process of paying off your debt, keep your spending in check, and avoid racking up more debt.
Doing this will help you find ways to save more money to put towards your payment plan, and it will help you get out of debt even faster.
That is why I put together this list of frugal living tips for you so that you can keep your spending in check and get out of debt as quickly as possible.
10 Frugal Living Tips To Help You Get Out Of Debt Even Faster
1. Make a budget
To keep your spending in check and achieve your financial goal of getting out of debt, start making a monthly budget.
Creating a budget will help you take control of where your money goes, even before the month begins, and it will give you the freedom to spend your hard-earned money on things that matter the most.
Related Post: How To Make a Monthly Budget You Can Easily Stick To – 6 Simple Steps
3. Make shopping lists
Impulse shopping will increase your monthly expenses and will definitely make it hard for you to find money to save.
Instead of going shopping without a clear plan, make shopping lists before heading to the store. You can easily write it down or make one quickly on your phone.
Doing this will prevent you from randomly adding things you didn’t plan for into your cart or wasting money on things you don’t need.
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2. Have fun for free
Trust me; you don’t have to spend money to have fun. As you prioritize getting rid of your debt and sticking to your payment plan, start taking advantage of free things to do.
Look up fun things to do for free in your city, and you will be surprised by how much you’ve been missing out on!
Related Post: 61 Fun Things To Do When You Have No Friends
4. Check out the library first
Before buying that book, make sure that you check your local library first to see if they have it. You will save a TON of money by doing this as most libraries have a lot of books you can check out for free.
5. Save on coffee
To keep your spending in check and find extra money to put towards your debt payment plan, skip your daily trip to the coffee shop, and start brewing your coffee at home.
This may seem like such an insignificant thing to cut out of your budget, but cutting back on your daily Starbucks routine can save you between $1000 and $2000 a year!
6. Make your own food at home
If you’re always eating out, ordering take-out, or spending money on fancy meal kits, you’re definitely spending more money than you would by preparing ingredients and cooking your own food at home.
If you’re thinking that this is a tiresome and time-consuming activity, you can make the process easier by meal planning.
7. Find ways to make more money
To pay off your debt faster, consider taking a part-time job or starting a side hustle that will help you get extra money.
There are many options to make extra money out there; choose one that will work out well for you or that you’re passionate about.
Related Post: 15 Insanely Easy Side Hustles To Make Extra Money In 2022
8. Sell things you don’t use anymore
Do you have a lot of things in your home you don’t use anymore? Then consider listing them on eBay or Facebook Marketplace to make some quick cash.
You’ll be surprised by how much money you can make by selling stuff you don’t use anymore.
9. Use the envelope system
The envelope system allows you to track how much money you have in each budget category by keeping your cash in envelopes (by category).
The pain of paying in cash will help you stick to your budget, and you will most likely not overspend on unnecessary things.
Using this system will also help you keep track of how much you’re spending, and this will easily help you see where you need to cut back.
10. Don’t keep up with the Joneses
Avoiding the comparison game is the final tip that will help you get out of debt faster and protect you from racking up more debt.
Stop buying things just because other people are buying them or comparing yourself to other people.
Who knows? Maybe everyone you’ve been comparing yourself to has been buying expensive stuff on credit.
When you finally eliminate all your debt, you will be at peace and without worries, while everyone else will probably still have credit card debt or car loans.
So from now on, focus on getting out of debt instead of how other people spend or manage their money.
This post showed you how to pay off debt fast with low income.
