Low Income Tips To Manage Your Debt Today.
Take control of your debt with these low income tips for debt management. You always hear about these individuals paying off crazy amounts of debt in short periods of time. They say ‘sell off your third car’ or ‘only go out one night a week’. For individuals with lower incomes there is no third car or weekly expensive dinners out. Those tips are never going to work for people that are already scraping by. The individuals that still need to manage the extra debt of home, cars, and maybe even student loans. I am not going to try to sell you a get out of debt in a month scheme, unless you want to try bankruptcy.
These are ways to manage and lower your debt gradually and realistically on a low income. There is an end in sight when you work hard and stay focused, I promise.
Consolidate Your Debt
Consolidating your debts will be a huge asset in managing and lowering your overall payments. Go to a bank or credit union that you have a trusting and positive relationship with. Look into loan programs that will enable you to pay off credit cards, cars, or other debts by taking out a larger and longer term loan from that one particular bank or credit union. By consolidating those loans into one you are getting many benefits right off. You now have less payments to manage. The larger loans tend to have a lower interest rate than many auto loans or credit cards, so you are instantly saving money by not paying the higher interest. You will also have less to owe each month since it is longer term and lower interest. This means that you will have more money to put towards paying off debt versus just paying off interest.
Pay Off Debt with Lowest Amount and Highest Interest
You can start the process of lowering your overall debt, since you have consolidated the debt into more responsible loans. Locate the credit card or loan that has the lowest amount of money to pay off as well as the highest interest. High interest can easily add up to more debt each month that could be avoided. Locate those high interest debt areas and focus your money to pay those off. Make sure to continue making the minimum payment for the other debts. If you were able to consolidate some loans then there will be extra money in your overall budget. Throw that extra cash on those debts and get some peace of mind as the small areas get paid off. It will feel so good to be able to have one less bill to worry about. You will get a burst of confidence and want to keep pushing forward!
Check Over Your Bill
This is a easy one to overlook, especially in the busyness that is life. Check each bill from credit cards to phone bills to bank statements. Make sure that you are not getting charged for things that you either do not need or do not want. It is easy to forget about that small subscription that you started a year ago, but is still being taken out each month without you being aware. One should also keep in mind that many places will now charge for paper statements. Switch over to online accounts and save a few bucks each month. You may even notice that those small trips to the supermarket or convenience store really do add up and finally decide to kick your slurpy habit! You never know where you can find some money to keep in your pocket, so definitely give each bill and statement a good check over!
A family discussion is pivotal. Of course, this is depending on your family situation. If you have a partner, or even old children, this is an important discussion for everyone to participate in. Each family member needs to be on the same page, in terms of focusing on getting out of debt and the positive factors that will occur when your debt is more manageable. It will be a lot easier for everyone if it is a group effort. Sit down and discuss what the plan is moving forward. You could even set a side a fund for one monthly treat (like ice cream or something small), so that it does not feel like you are cutting everything out of your life. If you go full no spending it is more likely that you will break and splurge (just like a diet!), so instead adjust your overall spending habits and keep those inexpensive treats along the way!
Five Dollar Trick
This last little trick I learned from my mother. Every time that you come across a five dollar bill (or choose another amount if you are feeling up to it) take it and place it in a jar somewhere safe in the house. Continue to do this for a chosen period of time and then check out what you have saved! You can now choose to put this towards debt or have a little celebration since you have stuck to the debt management plan!
Have great debts tips & tricks for individuals with lower incomes?
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**disclaimer, I do not pretend to be an expert, but rather just sharing the knowledge and experiences that I have personally. Please read the disclaimer**