Did you know that the average American has roughly $38,000 in debt? This doesn't include mortgages, either.
Debt affects everyone, regardless of income. Having a low income doesn't mean you can't free yourself from the constraints of debt.
No matter what your income, you have the right to free yourself from debt, alleviating the financial burden that prevents you from moving forward with your life.
If you're ready to learn how to pay off debt with low income, then keep reading to discover the tips and tricks needed to free you from financial purgatory.
How to Pay off Debt With Low Income: The Basics
Unfortunately, as bills pile up, so does your stress. Various bills may accumulate, with no end in sight.
You may find yourself saying, "How can I stop debt collectors from calling me?"
Luckily there are guaranteed tips and tricks for paying off debt, no matter what your income is.
1. Refinance Your Home
This only works if you're a homeowner. Contact your lender (or shop around) for lower interest rates. You may also be able to pay off higher interest loans by consolidating them into your mortgage, such as student loans.
You'll have to start from scratch in terms of how many years are left on your mortgage, but you'll be able to save some cash and fast.
2. Balance Transfers
If your primary source of debt is a credit card, then the interest rates aren't making matters easier. In fact, the average interest rate on a credit card is anywhere from 15 to 18 percent.
If you have $10,000 in credit card debt, that can easily be $150 a month just in interest!
Look for credit cards that offer 0 percent interest for 12 to 18 months (or more) for balance transfers. There's a one time three percent fee, but it pays for itself in two months if your balance is $10,000.
3. Cut Expenses
Sit down and analyze your bills. Is there anything you can eliminate, such as Netflix, Amazon Prime, or other non-essentials?
Contact your cable company and see about economy plans, limiting yourself to just the basics. Reach out to your cell phone provider to see if they have more affordable plans available.
The money saved can go towards paying off higher-interest debt.
If you frequently spend money on personal grooming, reconsider how often you go. Instead of spending on personal expenses every week, consider going once a month.
You'll still have something to look forward to, but you'll have extra money to pay off debt.
4. Sell Old Items
Know that pair of Michael Kors rain boots you had to have, but no longer wear? Or that rookie baseball card you've had stashed in the back of your closet?
Instead of letting them collect dust in your home, consider selling them to pay off debt. This is also true for old jewelry, especially gold and silver.
5. Find a Second Job
While it may only be temporary, a part-time job can help you bring in extra cash and pay your debt off faster. Depending on your skill set, you can tutor from home, work as a server in a restaurant, or a weekend bartender.
Eliminate Debt Once and for All
Now that you know how to pay off debt with low income, you can start chipping away at bills. Whether it's consolidating debt, finding a second job, or selling items you no longer need, you can easily tackle debt no matter what your salary is.
Be sure to check out our website for other finance solutions and debt repayment strategies. If you've got questions on paying off debt on a frugal budget, we've got answers.
