Paying Off Debt With a Meager Source of Income
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.