How to Attack Debt Even if You Aren’t Making the Big Bucks

Debt can put a stranglehold on your finances. Once you fall behind on payments you’ll end up paying more than necessary, your interest rates will go up, and you’ll continually find yourself struggling to pay back what you owe.

You already know the importance of climbing out of debt, but if you’re not making the big bucks you might wonder how in the world you can even go about doing this. While naturally it is easier to pay off debt when you’re making more money, but it is still possible to attack debt even if you’re on a low income. Here are a few tips.

Create a Budget and Stick to It

First, look over the kind of money you have coming in. Once you know exactly the kind of money you have you can begin to form a budget.

One of the biggest issues with climbing out of debt is not following a budget. You spend money when you like, which is the reason why you’re in debt to begin with. Instead, you need to create a budget and stick to it. When it’s written down it becomes easier to follow the budget and stay within your financial needs.

Write Everything Down

Write down what you spend. If it helps you can put up a chalkboard or something to remind you of what you’ve spent within your budget and what you have left.

It’s pretty easy to forget what you’ve spent during a given month, so if you have it written down it becomes easier to keep track of.

Use Cash

One of the biggest culprits behind debt is the credit card. Using a credit card is helpful, as it makes payments easy, not to mention some locations and online services only accept credit cards. However, because you’re not physically handing over a payment it because easier to buy items you can’t afford. Swiping a credit card for a $100 payment doesn’t have the same kind of impact as pulling $100 out of your pocket.

By using cash you’ll only spend what you have. There’s no way to spend more, and so you’ll be forced to stick within your budget. Of course, there are other advantages with cash. One is some locations (such as gas stations) provide a cash discount. If you do have to use a credit card for online payments use a cash-back credit card. This way you can at least earn money back on these payments, which you can then use to make added payments on your card.

Cut Out All Unnecessary Spending

This is the most difficult part. But go over every line of the budget and cut out everything you don’t need. You don’t really need all the cable and television services. You don’t need to go out for coffee when you can make it at home. You can avoid restaurant bills by making all your meals at home. You can also stretch your budget further by using coupons. There are coupon apps you can download on your phone that are easy to use and will give you cash back. Yes, you’ll need to make some sacrifices, but that’s what it takes to get out of debt, especially when on a low income.

Paying off debt is an important step in improving your finances. Not only will it help improve your credit score but you’ll have more money at your disposal with the lack of needed payments. While making more money will make it easier to pay off the debt, you can still attack your debt when on a low income by following these tips.

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