There are a number of reasons you may find yourself in a lot of debt with little income. You may have made poor decisions as a young adult or you may have gone from a dual to single income household. Regardless, it can be difficult to get out of debt on a low income, but not impossible. Whether you stop utilizing debt or focus on one debt at a time, you can conquer your debt.
Stop Utilizing Credit
First things first. You want to stop using credit cards. If you find yourself using credit cards to cover expenses, you need to rethink your budget. Continuing to use credit cards will mean never getting out of debt. If you find yourself maxing out your credit cards each month, you're never going to make even a small dent in your debt.
If possible, look for a way to consolidate your debt. You can find many consolidation loans or use a low or no-interest credit card. Either way, this can save you literally thousands in interest fees. You want to make sure to pay attention to the small print. For example, if you find a low or no-interest credit card to transfer your debt to, make sure you can pay off the debt before the promotional period ends. You also need to be absolutely sure that you don't take on any additional debt after the consolidation.
Focus on One Debt at a Time
You will pay your debt off much faster if you focus all your money on one debt at a time. Once that debt is paid off, move on to the next one. You can choose to pay off the smallest debt first, which can be very motivational, or you can pay off the highest interest debt first. Either way, it can make a huge difference.
Cut Unneeded Expenses
There are things in life that we need and there are things we want. For example, TV service is a want. If you have debt, you want to cut unneeded expenses so that you can get out of debt. Once you're out of debt, you can enjoy more of the things you want.
Put Extra Money Towards Debt
Any time you receive extra money, you want to put it towards your debt. For example, if you get a tax refund, put the money towards your debt. You may want to spend the money on something fun, but once your debt is paid off, you'll have more money each month to do fun things.
Just because you're on a low income doesn't mean you can't get out of debt. It takes a bit of sacrifice, but it's well worth it in the end.