If you have a limited income, there are still plenty of ways you can start paying down your credit card and other types of debt. Most Americans have at least $10,000 in debt, with those just leaving university usually shouldering a much higher dollar amount. If you want to buy a home, reducing the amount of debt you carry will make it much easier to purchase a house. While you do not have to pay it off all at once, there are plenty of ways that you can start to pay down this debt, even if you are living from paycheck to paycheck. Here’s how:
- Start by making a budget. If you have not yet made a budget, now is the time to start. If you are living on low income, it is very important to know exactly how much money is coming in and how much is going out and where exactly it is going. This will help you start to find places where you can reduce or eliminate spending, allowing you to devote this money elsewhere.
- Ask for help. If you do not know how to make a budget or how to start dealing with your debt, there are places you can go for help. A debt relief program might be a good place to start. Many can help you negotiate with credit card companies and other lenders, or they can simply help you start to find a way to pay off your debts, starting with the smallest and then snowballing into the heftier ones.
- Take a financial literacy class. It is important to be as educated as possible about your money and how to handle it. The truth is that very few people actually know how to read their credit reports, what all of the jargon on their credit card statements means, or even how to evaluate the value of a loan they are being offered. Taking a class that helps you understand these things can get you out of the cycle of debt.
- Make sure you are using credible sources. There are lots of sources out there that will provide you with less-than-credible information. Before you believe what they are telling you, make sure that they are a legitimate resource.