In this article I have stated how to pay off debt with a low income in very clear terms. So if it has been difficult to pay off debt, especially if you just have one source of income, you’ll love these inventive strategies to pay off debt!
Debt is a curse. Unfortunately, it runs rampant in our household.
Despite making several mistakes in the early years of our debt repayment, I was able to pay off $32,000 in the last year (on top of our mortgage payments) and it feels amazing!
How Did I End Up With So Much Debt?
Become a university student! Student loans make up the bulk of our debt.
I made the very minimum payments for the first year or two after college, but I kept assuring ourselves that everything will work out.
After a year of making only the bare minimum payments, our debt had ballooned to unmanageable proportions.
I sat down, mapped out our strategy, and drafted a budget.
You can get out of debt on one income if you follow these suggestions if you’re feeling overwhelmed by debt.
How To Pay Off Debt With A Low Income (My Experience)
Some of the methods I employed to pay off our large amount of debt may be found here below.
Method 1: The Zero-Sum Budget was put into place.
You must have a financial plan in place before you begin. There’s no escaping this one. You must instruct your money exactly where to go if you want to pay off your debt.
Simple, your income minus your expenses equals zero in zero sum budgeting
Do not consider yourself finished with your monthly budget if there is any money left over. You must designate a destination for this money.
Everything I had left over was earmarked for our student loans.
Method 2: I Made Debt Payments a Top Priority
Our main financial goal is to get out of debt.
I scribbled down every single one of our financial goals. After that, I set priorities and eliminated those that wouldn’t be appropriate for this year. The debt I oI from college was at the top of the list.
At times, I had to ask ourselves, “Would I rather go out to eat or be debt-free?” when our drive waned.
I was able to stay on track each month since I had that as our end goal.
Method 3: I Pay Our Debts in Full Using Our Tax Returns.
Once the money came in, I dumped it straight into our debt!
Method 4: A Pay Raise Helped Us Pay Down Debt
Knowing how much money I spend on items like groceries and electricity was easier with a budget in place.
The only things that changed when my husband earned a raise was our monthly debt payments and our retirement funds.
Method 5: I pay off debt with every bonus money I receive.
I paid off all of our loans whenever I received a bonus at work.
Method 6: In order to save money, I terminated subscriptions.
Subscriptions was one of the first things to go when I was putting together our spending plan.
As an example, I’ve been subscribing to HGTV magazine for a long time. It was difficult to say my final goodbyes, but a year later, I have no regrets about it. I was doing the same thing this year to see how much closer I can get to our goal by cutting out Netflix.
Method 7: I Didn’t Take Any Vacations
I came to the conclusion that I didn’t need a vacation to have a good time. This year’s vacation was a difficult decision, but it saved us hundreds of dollars in the long run.
Rather than going on a family vacation this year, consider making a family bucket list of free or low-cost activities.
Method 8: I Found Free Family Events
“Sacrifices” like this one was among of our favorites.
I was able to get to know our city better by searching for free events and discovering everything that it had to offer. Finding free activities has been made simple thanks to our local radio station.
In addition, I contacted our neighborhood parks and schools and signed up for a neighborhood newsletter.
That means free museum visits, zoo visits, even free family caricatures, all because of the generosity of the donors. You won’t be disappointed if you take the effort to search for free or low-cost events.
Method 9: I Sold Out My Unwanted Products Online
Things that you don’t use or even need may be lurking around your home. To get some extra cash, you can sell them on the internet.
Our emergency reserve was able to be replenished, freeing up funds that could have been used to make more payments.
My Conclusion On How To Pay Off Debt With A Low Income?
The most difficult aspect is keeping yourself going. Following a payment, it’s hard to see your money disappear into the ether. To keep us motivated, I had to remind ourselves on a frequent basis of our ambition to be debt-free.
Now that I’ve completed our debt-free year, I can see that it was a lot of fun and a great investment.
I gave up a lot, kept a tight rein on our spending, and paid down our debts first. Just one year into our single-income existence, I was able to pay off $32,000 in credit card debt!
I am eternally grateful for the opportunity to spend every day with my children at home. I was continuing making progress on our debt, and I was optimistic that things will become much better in the coming year!
I hope I address the issue of how to pay off debt with a low income to your satisfaction. Opps!