But here is the reality: you can pay off your debt on a low income. But again: there is much more! You can do that without selling your high-value properties like your building or vehicles. Today I am going to show you the things you ought to do in order to do this.
1 The beginning step to paying off any debt is to account for your present financial situation
You can’t take care of the debt you don’t want to admit exists, for the reason that one of the crucial strategies for paying off debt is selecting which debt you have to settle first.
Sit behind your computer- or notepad if you prefer- and pen down all the monies you owe. Do well to write down the amount owed, the terms of payment, the interest, monies you have paid already, and the credit limit on every type of debt.
Doing this will help you grasp the situation you are in. Make a separate schedule for things you cannot do without-necessities like medicine, food, shelter etc.
2 Make a budget
A budget is simply an estimate of your income and expenditure over a set period of time. A lot of people do not like budgets. But believe me: it is the key way to pay off your debt.
You can begin to distribute your monthly income on debts, once you have identified all of them. The first things you have to deal with when you make your budget are savings and debts. Then you can manage what remains after everything else.
If you have to slash down on expenses in someplace, it must affect things like your wants, like entertainment and transportation rather than paying off debt or investments.
3. Look at your biggest spending and see where you can reduce it
You must take careful steps regarding your budget, income and expenditure, once you know debt position. You can never pay off debt if you allow your debts to continue increasing. Go over your expenditures again, and group your spending in order to know where the bulk of your expenses go into- eating or transport, for example.
Then make a plan to reduce your expenses.
- Some Ideas: Buy food in bulk
- Sell your car (if you own one) and walk, bike or take public transport to work.
- Eat at home than restaurants.
- Reduce your subscriptions for things like gym and choose for lower packages like exercising at home. Still maintain your mobile phones and internet subscription as these are very important.
- Make thrift stores your priority anytime you want to buy thins including home appliances, clothes etc.
Being in debt is always a difficult thing, and more so when you are doing your best to get out of it on a low income. All hope is not lost though, you can still pay off the debt.
The most important thing to do in getting in paying off the debt on a low income is deciding on a strict budget, solving one debt issue at a time, and not relaxing, no matter how hard it goes.
After all, which would you like: living modestly for a few years of living in a lifetime of debt?