If there is ever a single word that can make almost anyone cringe, it’s debt.
Even the most careful and frugal can end up in debt. Paying it off can be overwhelming and feel tedious, especially when you have a low income to start with. There are a few things you can do to chip away at that debt when you have a low income.
The first thing you need to know is what exactly constitutes as low income. Here are the income caps for low income as of January 2016.
Working off that debt:
Step 1. Form a budget – and stick to it!
Learning how to budget is something that often stumps a lot of people. Especially if you are someone who likes to spend money! The simple answer to how to make a budget is to look at your income and your expenses. Then any extra income needs to be accounted for. Budget that leftover for entertainment, trips, or more savings! Check out this post for more on budgeting.
Step 2. Save Money
Start forgoing some of your extras so that you can pad your savings. Do you drink Starbucks every day before work? Trade a day or two for making it at home or work. Or make all of your coffee at home/work until your debt is paid off!
Step 3. Find small ways to make some side income.
Passive or non-passive income, it’s all the same when it comes to paying off debt. Find little nooks and crannies in your time schedule to add a few extra odd jobs in for making money. Then put anything you make towards the debt! Check out craigslist, care.com, or your local job board for little side jobs!
Step 4. Last Resort- Garage Sale!
Do inventory on everything you own. Sort it all into piles for Keep, Trash, and Garage Sale. The great thing about this is you are getting rid of potentially a ton of clutter, and making some money on the side! This is a last resort, though, because it’s pretty hard to do this more than once – unless you are a hoarder. Again, put all that money towards debt.
If you do all these things, your debt should start noticeably dropping. Is debt killing your credit score? Talk to your local bank about options for helping! I recently got a secured credit card, and only use it to pay my cell phone bill. It’s helping my score a lot!!
Have a great trick that I didn’t mention? Let us know in the comments!