Here’s How Low-Income Families Can Get Out of Debt

24
low income families get out of debt

Follow These Easy Tips to Get Out of Debt

Debt can be paralyzing and weigh heavy on anyone’s shoulders, especially when you’re struggling to make ends meet. If you’re feeling like the road to being debt free looks like a long and fruitless one, don’t give up yet! Here are steps you can take to speed up the journey.

Start a “Side Hustle”

A typical 9 to 5 job is a good start to paying off debt, but it’s only one of many avenues you should be exploring. Take a hard look at your schedule and see if there’s a way to add a part-time job during evenings or weekends.

If you have a service or product to utilize, consider starting a small business. Yahoo! Finance reports that nearly half of Americans have side hustles, which include a variety of gigs such as Uber driving, an Etsy shop or freelance writing and photography. And lastly, turn to the Internet where there are virtual jobs involving online teaching, data entry, and customer service jobs.

Check out this article on how to start a side hustle.

Manage Your Money (For Real This Time)

We probably all have that friend; the one who claims they are broke but spends $6 every day on a Starbucks coffee. If that friend was seriously concerned about money, they would know that $6 a day means over $182 a month!

This behavior is called “want-itis,” according to businessman and popular radio host Dave Ramsey. “You’ll only start saving money when you develop healthy money habits and your future needs become more important than your current wants,” Ramsey says. Scrutinize your grocery and energy bills, cut ties with cable, and set up automatic bank transfers to your savings account to make every penny count.

Find Ways to Increase Your Credit Score

Another important number to know is your credit score. A credit score ranges from 300 to 850 and is based on your credit history; do you pay bills on time? How many accounts do you have? Any recent credit inquiries?

A score above 700 is considered “good,” and may be worth asking your creditors for a lower interest rate, according to former vice president and editorial director of Consumers Union Julia Kagan. If your creditors say no, an alternative is transferring the high-interest credit card balance to a card with lower interest rates or to a personal loan.

Read this article on how to repair bad credit and increase your credit score.

Don’t Be Ashamed to Ask for Help

Having debt is nothing to be ashamed of. There are many helpful resources such as the nonprofit Consumer Credit Counseling Service (CCCS). Agencies such as these offer a variety of services such as financial education, budgeting assistance, and Debt Management Plans.

The CCCS will even negotiate with your creditors to lower your interest rates.

If it sounds too good to be true, the Federal Trade Commission strongly advises to watch out for scammers. In 2018 three million people were victims of fraud related to debt collection.

Think you’re too savvy to be caught by a scam? Over 40% of people 20 to 29 years of age reported a loss to fraud, while only 15% of people in their 70s did.

With the right tools and plan, your journey of getting out of debt can be cut short. It may be hard work but getting rid of debt is priceless.

Debt can be paralyzing and weigh heavy on anyone’s shoulders, especially when you’re struggling to make ends meet.

Leave a Reply