How to Pay All Debts When You Have Low Income

Being indebted for more than you owe can make your financial hole feel like quicksand. Much like quicksand, however, a slow and steady option allows for survival. Even with a very low income, you can pay off all of your debts; it is just going to take much longer. The key to paying off all debts, no matter your income, is to cut your spending. While increasing your income is a clear way to help, it isn't necessary (but extremely helpful) as you eliminate your debt. Remember that the man who struggles in the quicksand sinks, but the man that calmly and slowly removes himself from his hardship survives.

Understand your income and implement as much frugality as possible. Forget about eating out even once a week. Don't purchase magazines and don't buy new clothes. Record every transaction and cut out anything that isn't a necessity.

Classify your debts. Separate secured debts such as a mortgage or a car loan, from unsecured debt, such as credit card bills and charge cards. Secured debts such as your mortgage are secured by collateral, and that means that if you don't pay them the security is seized. If you don't pay your mortgage, your house will be sold by the bank to recover as much of its money as possible. Prioritize your secured debts and commit to paying them as fully as possible. If you cannot do this, speak with your lender about your options.

Prioritize remaining, unsecured debts. Your credit card bills come next. Stop using all of your credit cards and start paying minimum payment. While this battle might seem hopeless, paying minimum balances at least will help you pay down your bills and salvage a FICO credit score that may very well be tanking. Organize your unsecured debts with the highest interest rate first. Pay double its minimum payment and then pay the minimum payment on all additional cards. You will save yourself accrued interest by tackling and conquering your worst debts first.

Keep paying your minimum payments and double the highest (as you eliminate a card, the next available slot for the card needs to now be doubled in payment) and make sure that you avoid extra fees by not sending late payments.

Attempt to increase your income. Even if only temporarily, such as selling older electronics, the money you gather can be applied to your debts.


  • Lock down your spending. You need to spend only on the necessities and absolutely nothing more.


  • Don't continue using your cards while you're paying them off. You'll only make the problem worse.

    Don't lose hope. Remember that even if it takes several years that you'll no longer have this debt.