How to Pay off Debt With A Low Income


Paying off debt can be a challenge like no other. This is especially the case when it’s high-interest rate consumer debt. Depending on your specific circumstance, there are going to be other factors that impact the ability to kill the debt once and for all.

One challenge that will likely impact your ability more is having a low income. There may be a variety of reasons for the low-income though each presents a unique challenge to paying off debt. Don’t give in to the excuse of thinking that having a low income will impact your success. While it does make it more difficult, it can most definitely be accomplished with the right attitude.

You Need to Know What Every Dollar is Doing

You’ve heard it before. Having success at paying off debt requires things like budgeting, tracking your spending, etc. This is even more important when dealing with a low income. You need to know what each dollar you’re bringing in is doing. Not only that, but you need to find ways to lower what you’re paying towards each service.

This goes beyond the typical things like subscriptions and memberships. With a low income, nothing should be off the table. You can look at things like:

  • Your housing situation – can you rent out a room or downsize?
  • Transportation – can you take public transportation to save money on gas?
  • Have a mortgage? Can you refinance to a lower rate?

Some ideas may be a little more extreme, but anything that frees up money you can use now to pay down outstanding balances will help you bust the debt cycle.

Make Your Efforts Effective

If you want to kill debt forever you have to attack the principal. This becomes more of a challenge with a lower income – but it can be done by finding any way possible to lower the interest rate you’re paying.

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Do you have student loans? Look for ways to consolidate them into a lower rate. Do you have multiple credit cards with balances? You might be able to transfer the balances to a lower rate card or take out a lower rate loan to pay them off. If none of those work, you can always ask the creditor for a lower rate. The worst they can do is tell you no.

Cut out the Food Waste

Another big area of spending to look at when paying off debt is your grocery bill. The average family spends between $146 and $289 per week on groceries. The amount you spend will vary based on your given situation, of course, but there’s often ways to trim the fat off your grocery bill and apply the extra toward paying down debt.

Beyond cutting down on eating out, here are some other options to reduce food spending:

  • Make meals in advance and freeze them
  • Take lunch to work
  • Have pantry weeks

These only scratch the surface, but with each change you make, you free up more money to throw at debt.

Look at the Other Side of the Equation

Paying off debt with a low income is a challenge and requires cutting spending, however, cutting will only take you so far. You also need to find ways to make more money. When you add the extra income to the cutting, you create a more powerful synergy to kill the debt for good.

Making more money might seem like a challenge, but it can be done. Look into getting overtime hours at work. If that’s not an option, then look into a second part-time job. If that doesn’t work, try taking on a side hustle.

Do you have a skill you can monetize? If so, that skill can be an avenue toward earning extra money. Even if you don’t, there are plenty of other side hustles that require little to no skill from babysitting to walking dogs to cleaning houses. Find what works for you and use every extra dollar you earn to help you achieve debt freedom that much quicker.

Paying off debt with a low income can be a challenge, but with the right attitude and commitment you can do it.

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  • 90david

    better plan just live life with low income they really cannt collect what you do not have

  • Stephi Kemp

    This is all depressing , Rent is one whole pay check for less than 500 sf studio. I gotta get this figured out, cause I don’t want to but may loose my credentials for my job if I can’t pay for continuing education but I’m so tired of eating rice and beans or just being hungry all the time , even more so I just wanna dig outta the hole!

    • Joseph Purdy

      If your able to rent paying 25% of your gross income. It makes a hugh difference in paying down debt. Unfortunately government subsidies keep rent higher. Factor in taxes and more than half your paycheck is gone. Public education neglects to teach real world accounting practices. A priority is to take control of your tax burden.

      • Stephi Kemp

        Pfft I got it all figured out just move away from the expensive east coast. I hate the mid West but the living is cheaper

  • GenericBS

    Such bs..skill you can monetize? Side hustle? I mean really dude? And public trans cheaper than a car? LOL! Yeah let me go dog walk the other poor peoples dogs cuz they can afford the luxury to pay me for that.

  • MsWanderer

    Truthfully, Im at the point where I just need a better paying job to balance my rent, utilities, medical, phone bill and car payment. Those are my necessities yes to function daily. I can cut back on food spending cus I don’t go out and eat much anyway. I cook and prep my food daily. I don’t have credit cards. Just school loans for the next 20 yrs. Whoop.