Today I come up with a slightly different perspective. My purpose is to highlight the needed habits to pay off debt fast with low income. If you are someone from a low-income individual then these habits are essentially important for you, although these ideas apply to all income group people.

It’s human nature that paying off debts doesn’t feel good. Debts could be a barrier in your life to achieve financial independence early. Because the majority of someone’s saving would go in making repayment of loan principal amount as well as interest.

Life is easier and more peaceful when you don’t have any mortgage debt, credit card debt, or personal debt. By paying off debts fast, you can focus on your long-term financial goals at an early stage.

In short with no debts Life is more simple and peaceful. With no debts, his monthly expenses will lower and hence can save money for future retirement plan.

Debt freedom is not a not ha gift handed to someone by somebody. But it requires necessary changes in daily routines of life to pay off debts fast.

I am going to mention the list of habits that will help you to pay off your debts fast even with low income and will help you to achieve your financial independence early to retire early.


    1. Make your Debt Visual

This is the first thing that you have to do is Visualizing the debts. Visualizing the debts means you have to clearly identify the amount and period required to become debt-free.

To visualize the debts you can do

  • Identify the debt’s principal amount and interest amount and figure out what is the percentage of each.
  • Identify the number of years and months left to get rid off of the debts
  • In which year and month you will become debt-free you have to identify
  • You have to identify what percentage of asset acquired through a loan, you own right now. For example, at the time of apply for a car loan or any other loan, you should know your previous loan’s key figure. This will help you to make a quick decision whether to increase the liability or not. By doing this you will have a countdown and this will motivate you to achieve your goals of paying off debts fast and become debt-free.

2. Effective Communication Among life partners

To pay off debt fast with low-income communication between you and your partner is very important and both of you should be aware of your plans. For example, if your partner spends money through credit card without your knowledge. This act of your partner could cause a deviation from a plan of becoming debt-free early.

“Communication works for those who work at it.”

In our daily routine life, we communicate with each other all the time on spending so helps us to stay in line with our plans of becoming debt-free early.

On the first day of every month, I and Alexis Sit together to look at the previous 30 days from a financial and money perspective and we make forecast accordingly.

Effective communication is also important with the people from whom you borrow the money. You may not be able to repay on time, so communicating with them would help you efficiently.

Action point– today sits with your partner and identifies your real debts. Also, discuss all possible ways to pay off these debts early and make a repayment schedule.

3. Recall the Key Numbers

In managing your money one of the best things is always keeping key figures of money in mind for example.

  • You should know how much money you borrow from credit cards
  • What rate of interest you are paying on different debts you should keep in mind
  • At the time of applying for any new loan, you should know how many total debts you already have in the bucket to repay. By recalling this number will make your money management efficient and effective. And you can make the right decision on the spot to become debt-free quickly.

Action Point:

  • Identify how much you are earning
  • Calculate the total debts that you have to repay
  • Figure out the cost of different debts
  • Identify your key numbers


4.Make Budget and Continuously Review it 

First of all, you have to calculate your current monthly income and expenses. Then you can make a projection for one year of your income and expenses. In the last watching at your projected figure set targets, for example, to increase income than projected income and decrease the expenses. In simple and easy words this is called budgeting.

Budgets will help you to set your targets in terms of money management to achieve your goals of becoming debt-free early. A money budget means you can set a goal to reduce your spending by 10% and use this money to pay off debt fast. Also, you can target to increase passive income by working part to become debt-free. You have to consistently review your current performance and match with your targets this will help you reach your goal. And your ultimate goal is becoming debt-free.

Action Plan:

  • Calculate your total monthly income, expenses, and total debts as of today.
  • Forecast your income and expenses for the future 6 months, 1 year, and the longer period up to the period of loans
  • Based on your forecast make plans to increase your monthly income e.g. by working part-time.
  • Make a proper financial schedule of monthly repayment of debts up to becoming debt-free

5. Identifying why becoming Debt Free is important

You must identify that why you need to become debt-free early, everyone would have a different reason. Someone would want to become debt-free early to gain financial independence early for early retirement. Others may want to pay off debts fast with low income to save enough money to start their own business.

The reason is important because this will motivate you to achieve your goal to pay off your debts early.

For me I have seen my parents struggling while achieving their target to become debt-free, I wanted to tell a different story and rewrite it.

Action Point I want you to please write it down right now in your diary that:

I want to become debt free by this date ___________ and I want to become debt free fast because my goal is to _______________________________.

For example, for me, I want to become debt-free before 31st December 2022. And I will start saving to save enough money to start my own business as of 1st January 2026.

These statements will help you to reach your goal of becoming debt-free on the desired date. Also, this will help you to achieve your financial goals to make your dream come true.

So please write your debt-free statement, and actually, we would love it if share this statement with us below in the comment box. We would be very happy to look at your debt-free statement and long-term goals.

6.Avoid Taking Debt as stress

As per the latest study and research on mental health issues, one in every four people suffering from mental health issues is due to stressing themselves about debts. So you have to think about debt only about how you can improve it. It always sounds obvious to avoid stress but making it a habit is very difficult.

Action Point: You can avoid stress related to debts by increasing your passive income by working part-time. You can update your skills with the changing technology to get more increment in your current full-time job. Also, you can increase your income to pay off the debt by doing online affiliate marketing like the Amazon Affiliate marketing program. These all part-time work will reduce your stress and help you to pay off debt fast with low income through a full-time job.

7. Declutter your home

it means you have to decide whether the item in your home needed or not, you may choose to sell some items outside the basic needs. You can sell the item which may fall in the luxurious category to pay off your debt easily and quickly.

you can pay off your debt fast with low income by using this technique of decluttering. Actually, it helps to declutter your mind in fact.

you can prioritize the debt that which debt needs to be paid first by reading the post here on Pay off these debts first.

finance/050115/mortgage-vs-student-loan-vs-saving.aspHence to pay off debts you have to forecast your financial position and based on that make a plan. You have set repayments dates and work on increase side incomes. Also, you must keep communicating with your partner on every step of spending.

If you follow above all mentioned steps properly and regularly you will definitely pay off debts even with a low income quickly. you can also think about debt consolidation for the purpose of easy management of debt