According to the Federal Reserve, the average American has at least $6,000 in credit card debt, which is the highest amount that it has ever been in history. On top of this, several million people owe close to $50,000 for their student loans. Then there are those who have mortgage payments, car loans, and payday loans with high interest rates.
While these statistics are scary, they aren’t nearly as frightening as the fact that the average American also has less than $1,000 in savings. So if they were to lose their job, it could put their family at risk of becoming homeless in a matter of weeks. But, in order to save money, the total amount of debt that a person has needs to be reduced, which is a major struggle for those who are already barely scraping by. Thankfully, learning some helpful tips on how to pay off debt fast with low income can make this process easier.
Make a Budget
The first step to pay off debt fast with low income is to sit down with a pen and paper to make a rough financial report that lists out all of your monthly expenses. Be sure to be as detailed as possible when performing this task because if any bills are forgotten, they could create a financial strain later on. Add the dates that the bills are due, their interest rates, and their balances if you know them. After this is done, match up your total monthly income with them. This will give you a starting budget to work with.
Reduce Your Expenses
Once you have made a budget, it is time to go through your expenses to see if there are any of them that can be reduced. For example, if you normally purchase car washes once a week, start washing your car at home to save money. Grocery bills can often be reduced by using coupons and buying in bulk and lunches can be packed instead of eating out every day. While these expenses all might seem small initially, they can add up to a large amount of money over time, which could be applied to paying off your debts.
Get a Second Job
It is much easier to pay your bills when you have more money coming in from a second job. Those who have a limited income because of health problems or other reasons can try to earn some extra money from home in other ways though, such as yard sales, bake sales, or doing small chores for people in the neighborhood.
Each time that extra cash is received, don’t include it in your budget though. Instead, set it aside in a small jar or envelope until you get enough money built up to make an extra payment on a bill. And remember, no matter how tempting it might be, don’t spend it frivolously on unnecessary items.
Stick to Cash
In order to pay off debt fast with low income, it is imperative to start using cash instead of credit cards because credit cards accrue interest each month. This adds to the total amount of money that you owe. Those who find that it is too tempting to go shopping whenever they have had a bad day might want to cut their credit cards up. Debit cards can be used though because they withdraw money straight from a person’s bank account. However, purchases should only be made with them for the amounts that were designated for the items or bills in the budget.
Apply for a Debt Consolidation Loan
If you have so much debt that you can’t break even no matter how hard you try, the best solution is to apply for a debt consolidation loan. These loans pay off your bills, so you don’t have to worry about harassing phone calls, repossessions, and low credit scores from late payments anymore. Then, all you have to do is pay the debt consolidation loan company one easy installment a month.
As you can see, paying off debt fast is possible even if you have a low income. Consider applying for a debt consolidation loan with Christian Debt Counselors to help make this journey easier. Our company makes the process of paying off your debt fast and painless.
Our professional debt counselors will sit down with you to create a customized budget that works for your needs. We will work on your behalf with your credit companies to get you a debt settlement with lower interest rates. Doing so will create one monthly payment for you to manage, and reduce the stress of trying to meet numerous payments each month. So call today to speak with one of our representatives about how to get started.