Welcome back for more advice on reducing debt on a low income! Now that you’ve done the necessary preparation, it’s time to take actionable steps to pay down your debt.
Reduce Unnecessary Spending
You should also find ways to reduce your expenses, big and small, to pay off debt. For instance, you can reduce your purchases on non-essentials such as coffee, food, and parking. These habits can add up and can cost you more.
One of the most important ways to reduce your expenses is to stop using multiple streaming or subscription services. Doing so will allow you to save money fast. You should also check your bank statements to ensure you aren’t being charged for services you no longer use.
Instead of going out, try hosting a dinner party instead. Instead of going to the movies, try going camping. You can also shop second-hand for essential items and borrow books.
After you have found all the excess spending, follow these steps to revise your budget spreadsheet. You should then plug in the numbers for the next month.
Find Extra Income Streams
While it’s important to save money, it’s also important to consider ways that you can earn more. For instance, you can boost your income and make more money by investing in something you love. Some side hustle ideas include working as a freelance contractor or driving for a ride-sharing service. If you are a full-time worker, you might also want to look for a new job with a higher salary. There are additionally many ways to earn extra cash, and you can use this money to pay off debt.
Start with Smallest Debts
The first step in paying off your debts is to start with the smallest ones. This method, known as the debt snowball, involves releasing money that can be used to pay the next smallest bill. Although it doesn’t reduce the amount of interest that you pay, it can motivate you to continue paying.
Refinance or Renegotiate Interest Rates
If you are having a hard time paying off your debts, then it’s possible that you could be able to negotiate a lower interest rate. If you have been making on-time payments, you are more likely to receive a positive response from your credit card company. You can also point out that your account is in good standing. Lowering your interest rate can also help you save money on your debt over time. It can allow you to pay it off faster and lower your monthly payments.