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Getting out of debt on a low income is not an easy feat. There are many steps involved in this process, and some financial experts will tell you to cut back on certain things, but these changes won’t make a huge impact.

Although it’s possible to reduce your spending, there are other ways to manage your debt. These steps will help you get out of debt, but be careful not to get carried away.

Build an Emergency Fund

It may seem strange that the first step in paying off debt is to establish an emergency fund, but many consumers end up carrying a lot of debt after an unexpected bill, such as a job loss or a veterinary bill.

Experts recommend you have savings account for around three to six months of expenses. After that, you will have enough money to pay off your debt. To start, set aside $1,000. You should also include an emergency fund line item in your budget.

Avoid Acquiring New Debt

If you have a lot of monthly expenses that are bigger than your salary, then it may be difficult to manage your debts. However, it’s important to avoid getting new credit cards or loans if you are already struggling to pay them off.

It’s also important to avoid high-interest debts, such as those that people with low income commonly use. Unlike other types of loans, which require a credit check, payday loans do not require a credit report. However, they have high-interest rates and short repayment periods, making it hard for people to pay back.

Know What You Owe

You need to know how much debt you have to pay to avoid financial trouble. Before you start making payments, you must have a credit report and a credit score. A good credit score can help you lower your interest rate and get a debt consolidation loan.

Create a Budget

To create a budget, start by looking at your current spending and comparing it to your income. You can also automate this process by using an app or a spreadsheet. Before you start making any changes to your budget, look at the total amount of money you spend and look at the amount of money that you have left over to pay off debts. If you have no money left to pay off debt, consider cutting down on expenses.