How to Pay Down Debt Fast When on Low Income

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Debt sucks! Not only does it hold you captive like a thief locked away in Fuchu Prison, Japan – one of the strongest prison in the world –, it somehow steals your sense of purpose.

How do you expect to buy that dream car when you have sunken deep into the oceans of debt? What about owning that home you have for so long dreamed of?  How would your life be when you eventuallyretire? If you have nursed such dreams – or something like them – and still trapped in debt, you might just resign to fate, and accept those dreams as fairy tales.

The sad truth is that many people, particularly shopaholics, have embraced debt as a way of life. Never for once have they made getting out of debt a priority, and things keep on getting worse. If you belong to this category of people, it is time for a change. Seriously.

Now, you don’t need to wait until your monthly pay check increases to put your foot down on debt accumulation. No matter how low your income may be right now, you can still pay down your debt fast.

Here is how to lead a debt free life

#1. Determine How Much You Have In Debt

Simple isn’t it?

But why include this step here when it is so easy? Simple: there is a good chance you just have a vague idea of how much you have accumulated in debt. Or it could that you’re shying away from reality, and so have unconsciously decided to turn blind eyes to your financial woes.

Either way, a good first step to paying off credit card debts is by evaluating where you currently stand.

To get on with this task, place a call across to all the credit card companies you are indebted to and request for a balance. Write down the figures on a notepad or, better yet, a spreadsheet.

Now that you have a fair idea of what you are up against, it’s time to move to the next task.

#2. Increase your minimum monthly payment

This is a no-brainer.

Say you accumulated a student loan to the tune of $15,000, and the loan company you owe agrees that you pay $100 every month. When you do the math, it will take you 12.5 years to pay off that debt. Mind you, there is a good chance you will accumulate more debt along the way, further weakening your ability to offset the student loan you borrowed.

To this end, it is best to pay more than the required if getting out of debt fast means anything to you. The key here is effective budgeting.

Closely examine your monthly expenditure to find areas to cut back on. Cut back on frivolities that merely siphon your money but never adds any real value to your life. Then do the needful – put in whatever you saved towards paying off your debt

#3. Supplement your income

There are times when straining your income just to pay off debt won’t just help in any way. This is particularly true if you run a family, and you are the sole breadwinner.

So, instead of wasting away in the mire of hopelessness, pick up another job or, better still, start a side hustle. Picking up an extra job may not be so easy, so starting a side business while still working on your day job is a better option.

With the gig economy growing at a very fast pace, it means there can’t be scarcity of work-from-home gigs. Upwork, Indeed and Fiverr are good places to get a lay of the land.

#4. Deal with bad spending habits

One of the habits you shouldn’t for one day entertain is impulsive spending. Impulsive spending blinds you to the realities of life. It makes you buy stuff you don’t need, and will probably never use, makes you believe all is well while your finances are burning up in smokes.

If you have this habit – or something that has its semblance –, it’s time to make amends.

Don’t get it twisted, bad habits don’t and won’t go away at the snap of the finger.

The secret to conquering bad spending habits is replacing them with good spending habits. Some of the good habits you can start cultivating right now include:

  • Tracking your monthly expenditure
  • Setting up a budget and militantly sticking to it
  • Using less of credit cards and more of cash

#5. Sell off stuff you don’t need

pay debt fast

Take your time one day to examine all the possessions you own. The day you do, you would discover that a large chunk of the items in your home are nothing but trash. They have been lying around because you either didn’t notice them or you lacked the courage to discard them.

The plan is to use whatever proceeds you realize from trading unused items to fund your debts. Additionally, if you have got a car that is raking in hundreds of dollars in interest every month, you might as well consider trading it off.

A rule of thumb: if it hasn’t been used in the past 6 months, sell it off!

#6. Set debt payment on autopilot mode

Paying off debt isn’t fun. It gets harder when you barely making enough to sustain yourself and your family.

But, those debts still need to be paid off.

Make life easy for yourself by automatically paying back the money you owe. The easiest way to go about this is arranging with your bank to automatically take away a certain percentage of your income. The money deducted will be used to settle your creditors.

#7. Stay strong

The road to living a debt-free life is rough, filled with hurdles and contours. You will slack and slip. Don’t worry, all that makes you a human.

No matter the number of times you fall, pick yourself up. Get back on track. Keep the goal alive, and before you know it, your travails will become a testimony.

Your turn!

Have you enjoyed a debt free life over the years? How did you do it. Kindly share your secrets by dropping a comment.

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