How to manage debt with low income is an important thing to implement so that your financial condition isn’t destroyed. Good and proper debt management with limited income can make your income run out over time. To live more peacefully without excessive debt that makes you miserable, pay attention to the management tips below.

6 Tips on How to Manage Debt with Low Income

• Find a Side Job

Is the income from your main job relatively small and tends to be very limited to pay off debt? If possible, find a side job to increase your income so that you can manage your debt better. At least you won’t be in a slump because there is additional income that you can rely on.

Online side jobs are now abundant and easy to find, so you can become a part-time worker or freelancer. If you’re in a pinch, this situation can be overcome by selling your unused but still good items. Or if you’re an office worker, try to open a small business from home according to your skills.

• Create a Tight Budget

Whether you still rely on your main job and income or have a side job, create a tight budget. Even though you have additional income, you still need to manage your finances wisely and not waste them. In making this tight budget, you need to record all income and expenses so that it’s easy to monitor them.

Debt management plan which is considered right is to prioritize basic needs, such as transportation, food, housing and electricity. Cut expenses for tertiary needs such as shopping for clothes to subscriptions to certain platforms. Also, you need to cut expenses that aren’t too important such as eating out to save your money.

• Avoid Adding New Debts

If you have a fairly small or limited income, then manage your debt by avoiding adding new debts. Your finances can be disrupted and even your income can be chaotic when you continue to have debts. Focus on old debts and pay them all off first before taking on new debts so you live more relaxedly.

Even if there are illegal online loan offers that seem easy to get, avoid things like this. This includes not seeking additional loans in other forms so that your debt list doesn’t grow even more. Even avoid opening new credit cards if you don’t want to be overwhelmed and endanger your own financial condition.

• Build an Emergency Fund Slowly

How to get out of debt on a low income should be tried by building an emergency fund slowly. You might think it’ll be difficult to create an emergency fund while your income is low and you’re in debt. In fact, this is one of the right ways to manage debt by putting aside a little bit of income.

It doesn’t matter if you can only build an emergency fund little by little from your limited income. Do it every week to collect it slowly so that you can avoid new debt that shouldn’t happen. When there’s an unexpected event or sudden need, you can use your emergency fund as a rescue expense.

• Prioritize Debts Payment Based on Interest and Due Date

Even if your income is low, manage debt by prioritizing debt payments based on the highest interest. Write down all your debts to find out which debts have high interest and when they are due. That way, you can try to pay off the debt with the highest interest first; this is the avalanche method.

How to manage debt with low income in business can be learned by prioritizing high-interest debts payment. Or if you want to pay off the smallest debt first, that’s fine too; this is called the snowball method. However, if you find it difficult to pay, contact creditors to ask for relief and you don’t feel too burdened.

• Ask for Help

When you find it difficult to manage debt due to limited income, consult an expert. Financial experts offer consulting services for those who want to learn how to manage their finances well. This way, you aren’t burdened by debt and can pay it off without worrying about low income.

How to manage debt with low income is possible to learn so that you avoid various problems. The risk of unmanaged debt can lead you to legal and social problems. So in order to live peacefully and save little by little for the future, debt management must be done.