The bad news is there is no easy way to pay off your financial debt when your earnings aren’t high. The good new is that it is possible! I paid off my $25,000 student loans while earning $30,000 a year. It wasn’t easy to get rid of my debt, but it was worth the sacrifices I had to make.
And sacrifice is part of being debt-free…
“One half of knowing what you want is knowing what you must give up before you get it.” ~ Sidney Howard.
To pay off your debt with a low income, you gotta give up something – whether it’s time, energy, recreation, sleep, or socializing with friends.
One way to stay motivated to achieve your money goals is to learn how other people overcame their financial debt – such as by reading The Simple Dollar: How One Man Wiped Out His Debts and Achieved the Life of His Dreams.
8 Ways to Pay Off Debt When You Have a Low Income
Relate your money goals to your overall life purpose
What do you want to do with your life — where do you see yourself in 5 years, 10 years, 20 years? Your thoughts become things, so stay focused on the positive things you want to achieve in your life. Relate your life goals to specific money goals. Say, for instance, that your life goal is to live in a home with a view of the ocean. Use that vision as motivation to pay off your current debt. Remember that people with low incomes can achieve big life and money goals!
Write your goal in the present tense
Don’t say “I will pay off my debt with a low income” — it’s too future-oriented and uncertain. Instead, repeat your money goal as if it already exists. Say, “I am paying off my debt with my low income” — or even “I have paid off my debt with a low income.” Your logical mind knows it’s fiction, but your spirit listens to the truth in the words. Your spirit dictates your actions, which will work towards achieving your financial goals.
Tell three supportive people that you’re paying off your debt
Ask one person to be your accountability partner — to keep reminding you of your goals and intentions. Ask the second person to be your cheerleader, to be proud of you no matter what. Ask the third person to keep your life and money goals in their prayers or meditation — to keep lifting you up in thoughts and spirit.
Reach for the stars — but don’t set yourself up for failure
Another way to pay off debt with a low income is to set money goals that are ambitious, but not impossible. For instance, if paying $20 a week towards your debt is too easy, then pay $50 or $75 a week. The idea is to set money goals that aren’t too easy or too difficult. When you’re setting your money goals, it helps to know your credit score.
Break your money goals into three stages
Stage One is the starter and momentum builder — it’s a money goal you can achieve in a few weeks (eg, paying $20 a week towards your debt). After a few weeks, step into Stage Two: a mid-point measurement that requires you to put your low income to work. Stage Three is the final achievement, and includes the celebration! This final stage doesn’t necessarily mean you’ve achieved your money goals and paid off your debt — but it could be the highest level of achievement that pushes you to the pinnacle of success.
Put your blinders on – focus on paying off your debt with a low income
Make achieving this money goal the focus of your life. It doesn’t have to stay #1 on your to-do list for years — but if you put this money goal front and center for a few weeks or months, you’ll be more likely to achieve it.
Savor the benefits of paying off your debt
Paying off my student debt was one of the best days of my life! The freedom and sense of accomplishment was unreal. Get serious about paying off debt with a low income by listing the benefits of achieving it. Your primary motivation for achieving your money goals comes from within you — so get real about it. Make this goal worthwhile!
Write a press release that announces you’ve paid off your debt
Create a press release that describes your accomplishment in detail: the ways you paid off your debt, the low income you were earning, how this money goal fits into your life’s purpose, and how you overcame all obstacles by setting immediate, mid-range, and long-term goals. The first paragraph emphasizes the benefit you (will have) derived from achieving this goal. Read your press release at least once a week until it becomes reality!
Here’s how a guy I know paid off his debt while making a low income: When Your Wife Maxes the Credit Cards and Depletes Your Bank Account.
If you’re a woman, you might want to read about the money mistakes women make.
And if you have any thoughts on paying off debt with a low income, please comment below…
I'm glad you're here! My name is Laurie Pawlik-Kienlen; my husband Bruce and I live in Vancouver, BC with our critters. We can't have kids, and are learning to accept whatever life brings - both good and bad. I have an MSW (Master of Social Work) from UBC, and degrees in Education and Psychology. I hope you say hello below - I can't give relationship advice, but writing can bring you clarity and insight.