Paying off debt is challenging. This is especially the case when it’s high-interest rate consumer debt. Depending on your specific circumstance, there are going to be other factors or issues that impact the ability to “kill” the debt once and for all. One challenge that will likely impact your ability more is having a low source of income. There are various reasons for having a low source of income, though each presents a unique challenge to cover your debt. Don’t be fooled by the notion that by having a low income will impact your success. While it may be difficult to thread, it can be attainable with the right mindset and attitude.
Know where your every penny is doing. – You heard it before! Paying your debt requires a lot of budgeting, tracking of spending and discipline. It is more important when dealing with your low income. You need to know what every penny/dollar is doing. You also need to figure out ways to lower what you are normally spending on everything. You need to have the eagle’s eyes to look for things like:
> Housing – rent a room or downsize.
> Transportation – take public transportation to save on gasoline.
> Mortgage – refinance at a rate that can easily be paid with your low income.
There may be some ideas that’s too extreme, but you need to take a look at any possibility to save up.
Make your efforts effective. – If you want to get rid of debt forever, you have to take the very root cause. This is however becomes more challenging with your low source of income, but it can be done by finding some ways possible to lower the interest rates you are paying. You may consider to transfer the balances to a lower rate card or take out a lower rate loan to pay them off. If none of those work, you can always ask the creditor for a lower rate. The worst they can do is tell you no.
Reduce food waste. – One of the best things to look at is your grocery bill. Your budget may vary based on your needs and sometimes, the tendency to luxuriate. There are things to consider beyond cutting eating out.
> Make meals in advance and freeze.
> Bring a lunch box to work.
> Have pantry weeks.
Peer through the other side of the equation. – Paying off your debt with your low source of income and reducing spending habits can only take you so far. You should also find ways to earn extra money. When you add the extra income to the cutting, you create a more powerful synergy to kill the debt for good. If that’s not an option, then look into a second part-time job. If that doesn’t work, try taking on a side hustle.
Paying off debt with a low income can be a challenge, but with the right attitude and commitment you can do it. Find what works for you and use every extra dollar you earn to help you achieve debt freedom that much quicker.
This might be an interesting topic, right? One thing most of us worry about is “hitting the wall” along our ways. People who focus too much attention on “hitting the wall” often find themselves in the position they feared most.
The same can be said about focusing too much on debt and other obstacles hindering financial success. Instead of focusing too much on the possibility of failure or ‘hitting the wall,’ concentrate on reaching financial freedom.
Each year, thousands of consumers take the pledge to begin the path toward financial freedom on FinancialLiteracyMonth.com. While this year’s month-long financial literacy initiative is over, the quest for financial freedom continues. The financial educators or financial advisors offer the following tips on how to create wealth and avoid debt throughout the rest of the year.
Invest wisely. Many people find themselves in difficult financial distress because they have not properly prepared for emergencies or for the future. If you don’t want to end up broke, start putting things in place now to help you reach your financial goal/s.
- Start contributing to a 401(k) account or some other retirement investment. A little put away now will bring huge results later.
- Build an emergency savings fund. Prepare for the unexpected such as a job loss, home or car repairs, and even periodic expenses. This way you won’t have to rely on credit when these instances occur.
Hone your passion. Invest in a career that is rewarding and challenging. Don’t chase money. Many people are living their dreams and making money at the same time.
Protect assets. Insurance may seem like wasting money, but it will come in handy when it’s needed and could save you a boatload of emergency expenses. Make sure all your valuables are protected including yourself. Purchase the right coverage to avoid an unnecessary financial strain.
Pay off credit card debt. Carrying a credit card balance each month is not helping you. The money going towards payments could be put to good use in another area. Be careful not to charge more than you can afford to pay off in a reasonable amount of time (90 days or less). Also, don’t use more than 30 percent of your credit limit.
A good piece of advice on obtaining wealth is to simply live within your means. Spend less than you earn. Don’t buy a $60,000 car when you’re only earning $30,000. Develop some achievable financial goals and stay on course – and off the wall.