Pay off your debts and start saving for the rest of your life – moneyvsfuture
Money Management

Pay off your debts and start saving for the rest of your life


Even if income is low, you can get rid of debt. It’s not easy, but it can be done. Here is an example of how a family of four can repay only $35000 a year. When your income is below average, these tips will help you pay off your debt.

How to repay debt with low income and save for the future

It is difficult for anyone to repay the debt. It stays in your mind until it disappears and clears it. Debt hovered over you like a dark cloud waiting for the storm. When your income is low, the clouds seem darker. If there is no necessary money to repay the debt quickly, it will feel like eternal debt.

When your income is low, it feels like a mountain climbing. Mount Everest is easier than getting rid of the debt. I know, because I’ve been there myself, though it’s not the easiest thing in the world to pay off the debt, but it’s still very likely. These steps will help you develop a plan to pay your bill as soon as possible.

Our family earns about $35000 a year, we have a family of four, and we use the following tips each month to repay our debts as planned.

Maintain a positive attitude

The most important thing is that you need to maintain a positive attitude. Looking at life optimistically can really mean getting rid of the difference between debt and leaving it behind.

No matter if you lose the power to pay the debt because of the new year’s resolution, or you are now deciding to pay off the debt is not very interesting and you want to be out, never forget to believe in yourself.

Are you ready to know how to get rid of the debt and avoid the secret of the debt?

Knowing how you spend money every month is the first step. You can track expenses in several different ways:

Write down each charge with a pen and paper

Use a free budget application like Personal Capital to track your revenue and expenses

When you need help making a plan, pay the budget application, such as you need a budget

The exercise was boring at first, but it’s important when you get out of debt seriously. You need to know how much you spend on the following categories:


Rent and utilities

Current minimum monthly loan payment

Commuting expenses

Entertainment includes cable TV and friends going out

Your goal is to cut expenses, not income. Suppose you bring home $3000 and your fee will cost $2999 or less to earn more than you earn. If you haven’t, look where you can cut your expenses to avoid paying your salary.

You can consider downgrading to a cheaper phone or cable subscription or packing lunch, rather than going out with these people for lunch or using the Trim Financial Manager (it’s free! ) To re-negotiate or cancel your monthly subscription so that your monthly payment will be reduced.

Cutting spending is the easiest way to get an immediate raise!

Because you can only reduce your expenses so far, making more money in your free time is another way to get more money than you do. Here are 101 ways to earn extra money to get rid of debt.

At the end of each month, continue to compare your expenses with your income to ensure that you are still on track.

Emergency set at $1000

After you know how much money you currently earn and spend in a month, you now know how much extra money you have each month. While you can put the money aside to pay for a Hawaiian vacation, it’s best to focus on setting up a contingency fund and then on getting out of debt.

Why not skip the contingency fund and inject all additional funds into debt?

Because 40 per cent of Americans cannot afford 1000 dollars in surprise costs.

If you do not reserve at least $1000 to cover the surprises of your life, please use your extra monthly income first. I don’t want to see your debt service progress not cancelled because you need to borrow $1000 to pay the bill because you don’t have enough savings to pay for it.

Continue to make minimum monthly payments on your current loans and use your additional income to establish an emergency fund of $1000. I suggest you deposit your money in a high-yield online bank account so that you don’t pay the bill, which eliminates the temptation to deduct life from the contingency fund for non-financial emergencies.

Develop a debt repayment plan

This is an interesting start! You have $1000 in a separate “contactless” account to hedge against the unexpected surprises of life, so you can pay your debt without interruption.

You need to choose the best options for you, but the two best debt repayment plans are the debt snowball and the debt avalanche. Both options are good, but you may prefer the debt snowball. You first pay the smallest loan balance to achieve regular emotional victories, which makes it easier to maintain a positive, “can do” attitude.

How to start the debt snowball

Here are three simple steps to start your own debt snowball:

List your debt in order from minimum to maximum balance

First, make an additional monthly payment for the smallest debt balance

Deposit any extra money into the minimum loan balance at the highest interest rate each month. Continue to make minimum monthly payments on your other loans so that you do not receive any late payment. After your first loan is paid in full, give yourself a high five and focus on the next minimum balance.

You may only be able to pay an extra $100 now, but when you pay a smaller loan, the extra monthly payment will snowball to an additional $500.

Keep living in your means.

How long you will repay your loan depends on several factors:

Total amount of arrears

Interest rate per loan

Are you still borrowing money?

Spending cuts and income increases are two ways to have extra money to repay loans each month, but you also need to stop borrowing. Others, you will only continue to “break even” and will never escape the debt cycle.

If you expect to have to borrow money while still paying off your existing debt, please reduce the size of the additional payment and set aside the difference until you have enough cash to pay for the purchase instead of credit.

When you turn your attention to debt instead of paying on a monthly basis, you may need to make some psychological adjustments, but the reward is well worth it.

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