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Get rid of debt when you’re on a low income with a no budget plan
Debt creates income outflows, it produces earnings for the lender, not for you. The longer you stay in personal debt with high interest rates, the longer it will take you to start saving.
This post is for people with medium to high levels of debt who want to start getting rid of them without a self-imposed budget.
We’re not going to set up a budget or a quantifiable goal or a time frame.
The goal is simply to get rid of as much debt as you can – a general goal.
The challenge – where is the money coming from? You’ll create new cash inflows and free up cash you already have.
If you’re looking for some of these ideas this post can help you.
- Debt payoff strategies
- How to payoff debt with low income
- Debt payoff planner
- Debt consolidation
If budgeting is your thing, you can use our Excel Budget Spreadsheet to easily start and keep one.
You can use all these options or some of them to start creating or freeing money inflows to payoff debt.
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- 5 Hacks to improve your FICO score
- How can I improve my average credit score
14 Ways to payoff your debts with a no budget plan
Start paying off your smallest debt completely
Pay off your smaller debts or pay more than the required amount every month.
This is a way to get rid of some debt completely and achieve a sense of accomplishment towards your general goal.
So, you’ll have extra money after the smaller debts start to disappear. You can use this money towards your larger bills.
Track your payment flows
Use an excel spreadsheet or a paper sheet to track your payments. This is not a budget, just a way for you to easily keep track of your payments and extra cash.
Tracking also allows to see your progress visually to keep you motivated.
Take note of your debt elimination accomplishments
Feed off your achievements when paying your debts. This appreciation will keep you motivated to continue to pay the higher level debts.
Make double payments on your smaller debts
If you can’t pay off the smaller bills completely, start by making double the minimum payment on them. This is a way to get rid of debt faster.
Manage the extra money you have as you’ve eliminated your smaller debts
Once you’ve paid off smaller amounts of debts or reduce them, you’ll have extra money flowing every month. This will add up.
Take note of these inflows and manage them. Depending on where you stand overall, you can save or invest these or put them toward your higher credit bills.
Freeze your credit cards use
Put your cards out of reach and start paying cash or just go down to one credit card.
Spending with credit cards is much easier. Once you start using cash you’ll gain more control and discipline over your spending habits.
Review your subscription services
Review your spending from monthly or annual subscriptions. Cable and meal subscriptions are two big one.
Save money on your cable bills. There are some good alternative to cable that allow you to spend less.
Three streaming services that allow you to cut your cable bills include; Direct Now, Netflix and Hulu.
Also, YouTube TV and Amazon Instant Video offer large libraries of TV, movies and documentary content.
Meal subscriptions. Another subscription service you can cut down on is Meal Subscriptions.
If you’re buying your meals via a box-subscription, you may be able to save by cooking at home.
Free activities. Find free weekend activities around town and at home. From doing outdoors activities to visiting cultural places like museums, you can get many of these free.
Review your Free credit report
Obtain your free credit report and review it to see where you stand. Focus on negative entries and potential errors included on your report.
You can a free report at annual credit report.
Contact the lenders or credit cards involved and discuss terms for settling the disputes.
Cleaning up these negative entries can improve your credit score. A better score allows you to borrow at lower rate or to negotiate existing debts.
All this will reduce your monthly interest payment and put more cash on your pocket.
Consider debt consolidation
Debt consolidation is an alternative if you have many high interest debts.
Consolidating them may make sense if you can get a lower interest rate to the average rate you’re paying now.
Any saving from interest adds money to your pockets.
Use reward credit cards
Reward credit cards give you points or rewards when you spend money with them. Some of these cards have an annual fee and some don’t carry any fees.
If you’re shopping for a new card or consolidating your debts with a balance transfer card, make sure it has rewards feature.
Shop at cash back websites
Cash back websites pay you points for shopping in their platforms. Many household goods are offered on these site and shopping there can save you money.
Swagbucks is the largest online rewards site that gives free gift cards to its members for their online activities. $5 bonus for new users.
To earn points that you can convert to cash (Paypal option) or free gift cards. Gift cards are for stores like Amazon, Walmart, Starbucks and Target, among others.
Join Swagbucks to start earning points and cash.
How you can earn on Swagbucks,
- Taking surveys and polls – This is the most profitable way to earn at the website, answering questions online.
- Shopping online – buy stuff you need and earn points. Earn 20% cash back on your purchases.
- Watching Videos and surfing the web
- Playing games
- Download the Swagbucks app to your phone
- Get discount coupons
Look for a side hustle
There are many side hustles you can do part time as a freelancer. Here are some ideas to make extra money from home side hustling to pay down debt.
- 16 Websites to find freelance work at home
- 9 Simple ways to make $1,000 a month
- 21 Sites that pay you to write
- 10 Amazon work at home jobs
Sell your unwanted stuff
You may have tons of unwanted stuff at home you can sell online to make money. You can sell your old items to make cash and to payoff some of your debts. Here are some ideas.
Review your insurances
Review your renters, home, car and pet insurances. Negotiate with the insurance companies and try to consolidate your policies into a single company to save money.
These are some ways to start making or freeing extra cash to payoff debt without having a hard budget.
Although some people do well sticking to a budget, when it comes to managing their finances this is not always necessary.
Some feel more comfortable and are able to accomplish sound financial management without hard budgets.
The way they do it is by having a general goal of getting rid of debt.
They payoff the debts by creating new income flows, as small or large as they can, and by freeing cash they’re already spending.