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Many people in the part of this world now face mountain of debts in their life. Those with low income are finding things tough as a result of inflation. And in today's easy-credit society has led more people to burdensome financial obligation more than ever before.
Are you under a burden like one of them? Don't worry because in this blog post, we will get you covered with:
- 6 Possible Causes of Debt
- How to Pay Off Debt Fast With Low Income
Is it possible to pay off your debt even when you have low income? Yes. It is possible if you have faith in yourself. Whether you have low income or fixed income, you can come out of debt to stay healthy free-debt for many years to come if you follow this lesson.
6 Possible Causes of Debt
1. Products of Wants
Failing to control wants causes debts. Our debts cause not from our inability to meet the basic of needs, but from our wants. Man’s wants are unlimited. Wants bring anxiety. Anxiety brings fears. Fears bring desperation, worry, shame and blame because of debts we find ourselves in. A debt is a product of spiritual malady.
2. Excessive Consumption
It causes debts because we can't control our appetite. We want now. We want everything now. It is dangerous because it can bring burden on us.
3. Lack of Discipline
What leads us to debts is indiscipline. It makes you act without giving you a second thought about what may be the consequence of the act. Indiscipline is destructive. Indiscipline is the “instant gratification”, desire or the lust, which lurks in us and whisper, “That is pretty, get it or that’s a bargain; grab it”. Indiscipline makes us to bite more than we can chew. Lack of discipline makes you spend more than what you earn or above your means.
4. Carelessness
Most of us are careless in the way we live. We take many things for granted. Instead of seizing a little opportunity to their future advantages, many people allow such a chance to elude them.
5. Lack of Written Budget
Planning is essential to our life. Many people fell in debt because they are not organized today. They never plan for how they spend their life, time and money. And if you don't establish a budget on low income, you will always spend above your means. You would have spent far above your means before you realized it.
6. Delay Paying Bills
Procrastination is a product of debts because we fail to pay bills monthly on time. We delay little things until we can't afford to pay when it comes to big debts.
How to Pay Off Debt Fast With Low Income
Step 1: Change Your Money Habits
If you want to get out of debts, you have to change your money habits. Stop taking on new debts. Stop adding to debt by buying things you do not need.
Step 2: Repay What You Borrow
Borrow and repay same time. Don't wait till you have great debts. Make fast payment as you borrow.
Step 3: Call Your Creditors
Call creditors and let them know that you have low income and you would like to pay them 2%,or 5% or 10% out of your inome every month or every week, depending on what you want. You have to negotiate with them well.
Step 4: List out All Your Debts
As you list out all your debts, you need to know exactly how much you owe and how much you can pay off debts daily. List those lowest debts and pay off as much as possible.
Then list other higher debts and tackle it as much as possible, with God’s help. Even when you feel tempted for one reason or the other or face bad time, just pay off debt first.
Step 5: Repeat the process till you clear all your debts including other mortgage.
Step 6: Work Out A Schedule for Each Debt
You have to work out a repayment schedule for each debt that fits into your budget. You have to give a priority to your high interest loan.
Step 7: Pay Minimum or More on All Cards
Every month you must pay more or minimum amount on all cards. You must pay off your credit cards.
Step 8: Seek for Advice on Credit Cards
You have to ask a credit card expert for good advice on how to make your credit card good report and how to keep your credit card so healthy for many years.
Step 9: Stay Discipline
Even when you have low income that makes you not able to pay off debts, stay disciplined. Check your credit card to ensure that you are not in debt. Never try things on credit. Learn to live within your means.
Step 10: Get Some Side hustle If Possible.
One income is not enough. You need to have some side hustle or extra income stream to cover (monthly) bills.or enjoy yourself.
Step 11: Pay Yourself Firsts
Pay yourself a fixed percentage of your low income first daily even when you have debts. You must pay yourself first before you pay off other debts.
Step 12: Save And Invest for Future Growth
Work hard to save and invest in investment options like fixed deposit, high yield savings account, real estate investment automatically, to build wealth over time. Never work all day, every day just to pay bills because it can cause debts if you can not meet your expenses with your income.
Learn to build your net worth over low income. Keep doing this till you make sure it can cover all your monthly expenses.
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