Finding your way out of debt when you don’t earn much money is hard. You can have all the desire in the world to change your financial situation but maybe you just don’t know where to start. Keep reading for top tips and helpful advice on how to get out of debt on a low income.
Firstly you must take charge of your situation. As much as you may wish to ignore it or forget about it, it won’t go away. Acknowledgement is the first step. Now it’s time to write things down. A spreadsheet is the best way as you can update it over time but a pen and paper will work just as well. Details all your debts. This includes who you owe, how much you borrowed, how much you now owe, the interest, your payments and the credit limit available. Once you have actual figures on a page, in black and white, things are easier to comprehend. The situation suddenly has a light shining upon it and you can start to see a way out.
Make A Budget
How much do you earn every month? Just like above, write it all down. Open a separate page on your spreadsheet and label is accordingly. Every part if your monthly income should be detailed, as well as all your outgoings such as rent and bills. This will show you what you have left over, if anything, once you’ve settled your everyday life expenses. Now is the time to budget. Reduce your shopping bill by swapping supermarkets and cut back on chain-shop coffee. Whatever you have left should go towards clearing your debts. Interest on debts mounts up every months and the longer you leave it, the longer it’s going to take to clear. Tackle on debt at a time. Speak to the creditor you owe inform them about how much you can pay off every month.
Transfer Your Balance
If you can get a 0% credit card you could pay one of your debts off in one go, basically transferring the balance to a different credit card. The huge benefit is that you would now be paying 0% interest. So you’re paying off what you owe instead of an ever increasing amount. Be aware that even though some credit cards are 0%, they only offer that lack of interest for a certain amount of time. It could be a few months, it could be a couple of years. Be aware that you still need to pay this amount off. It’s not a long term solution to just transfer your balance between cards but it might be the start of how to get out of debt on a low income.
Earn Extra Income
What could you sell that you no longer use? List it on Facebook marketplace or eBay and see how much you can earn that way. Could you put your hobby to use and earn extra income? Maybe you could pick up extra shifts at work or do overtime. Perhaps a part time job for a few months would help you get on top of paying back what you owe? This works especially well in the run up to Christmas when seasonal temps are required. Put this extra money straight into paying off your debts. It is worth having different streams of income to help you out.
Please know that there is help out there if you are in debt. The panic and stress of debt causes us to make choices we wouldn’t ordinarily make. Don’t turn down the wrong path and think that another loan will help. There are expert charities and organisations like Christians Against Poverty who will help you tackle your debt if it’s too overwhelming for you to do by yourself.
There are ways to reduce and eradicate your debt, even on a low wage. Never bury your head in the sand. Debt does not just go away when you stop thinking about it. Tackling it sooner is far more beneficial than leaving it to escalate. Use our advice on how to get out of debt on a low income and you’ll be in a better financial situation before you know it.