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How to Be Completely Debt-Free On a Limited Salary?

Many dream of living debt-free, but it can sometimes seem far away. However, for some people, the mere thought of owing someone money makes them feel dreadful. It is like a heavy burden is being placed on their shoulders. Many people place paying off their debts at the top of their priorities list for this sensation alone. Here, let us discuss how to be completely debt free on a limited salary.

It’s not simple to figure out how to pay off debt with a meagre salary. Some so-called “financial gurus” advise you to cut back on avocado toast and lattes. But, it’s unlikely that these little changes would have any significant influence. While reducing your expenditure can help, there may be other, more successful strategies you can use to manage your debt.

Steps to Be Completely Debt Free on a Limited Salary

Here are some ways to be debt free on a limited salary:

Debt free on limited salary

1. Stop acquiring new debt

You are not paying off debt; you are shifting it around if you borrow money from one source to pay for another. This can occasionally be advantageous such as when you acquire a new balance transfer credit card to take advantage of an introductory APR of 0%. It is also useful when consolidating your debt into a personal loan with a cheaper interest rate.

Why this matters: You risk piling up a lot more debt than you started. It may cause you to fall behind on your monthly credit card and loan payments. 

2. Find out how much you owe

Write down every credit card statement, medical bill, loan payment, and utility bill still unpaid, then total up your debts. Write the interest rate, late fees, and any other penalties you may be required to pay next to the principal balance. It is tough to figure out how to pay off debt with a low salary if you don’t clearly understand your financial condition. 

Why it matters: Developing a workable debt repayment strategy can be difficult without knowing your debt balance.

3. Set up a budget

You may track your spending and source of income using a budget. List all of your sources of income and regular, set costs to start. Determine how much money you should set aside each month for variable costs that cannot be eliminated, such as groceries, and then designate the leftover funds for debt repayment. Create a budget line item for debt repayment, stick to it, and raise it as needed. 

Why it matters: You’ll need to make room in your budget for extra monthly payments to your debts to reduce the sums more quickly.

4. Initially, pay off your minor debts

The total amount due after tallying up everything you owe may seem overwhelming. It’s difficult to get out of debt on a low salary, but marking minor victories will keep you motivated, and cutting down on the number of creditors will make you feel less anxious. 

Why it matters: Starting with your lowest obligations can help you get momentum and maintain motivation as you work toward paying off your debts.

5. Take on your biggest obligations first 

You can use various strategies to attack significant debts after you’ve paid off the lesser loans. The debt avalanche strategy is one option in which you pay the minimum amount due on each bill and then utilize the remaining funds to settle the debt with the highest interest rate. Stopping the worst bill from growing will put money back in your pocket because those interest charges add to your monthly debt. 

Why this matters: You can save a ton of money on interest by turning your attention to obligations with higher sums.

6. Find strategies to increase your income

If you’re still having trouble finding ways to pay off debt when you have no money, search for ways to improve your income. Put that extra money toward your debt if you can think of inventive methods to make the most of your free time. 

Why it matters: Even if your income rises temporarily, your additional money could aid your debt relief efforts.

7. Improve your credit ratings 

You can reduce your debt by raising your credit score. Low credit scores usually result in higher interest rates for credit cards and personal loans. 

Why this matters: Access to debt consolidation products with more favorable conditions and cheaper interest rates may be made possible by having a higher credit score.

8. Examine your alternatives for debt relief and consolidation 

  • Debt consolidation

A personal loan used for debt consolidation is frequently used to pay off your current debt and combine the outstanding balances into a single payment to your new lender. 

  • Debt Relief 

Companies that provide debt relief or “debt forgiveness” promise to speak with your creditors on your behalf and persuade them to lower the amount you owe. 

Why it matters: By combining your credit card and personal loan amounts, you can get a more stable monthly payment, save on interest, raise your credit score, and receive a clear timeframe for paying off your debt. However, if you choose debt relief, you may pay less than what you owe and finish paying off your debts sooner.


Personal finance can involve crunching figures to determine what will benefit your financial objectives the most. As long as you’re managing your emergency fund, saving for retirement, and achieving other personal financial goals, there is nothing wrong with not making an effort to pay down low-interest debt. It’s not impossible to get out of debt, even if you have a poor salary. Instead, implement these tactics to begin moving toward getting rid of those bothersome balances. If you have numerous bills with high-interest rates, you may also think about getting a debt consolidation loan to help you pay them off faster. In the end, acting quickly will help you raise your credit score and move closer to achieving financial freedom.


1. If I live paycheck to paycheck, how can I pay off my debt? 

You are doing great as long as you are moving forward with paying off all of your loans and other bills. Living paycheck to paycheck while trying to get out of debt requires prioritizing debt repayment. Move on to your debt each month after you’ve paid all your monthly obligations.

2. How can I pay off my debt if I don’t have any money? 

There are many ways to get out of debt, also known as debt relief, whether you do it on your own or with the help of a credit counselor: 

  • Apply for a loan to consolidate your debts 
  • Use a credit card for balance transfers
  • Choose the snowball or avalanche approach 
  • Join a debt management program

3. How much should I have in savings? 

According to conventional financial advice, you should strive to keep three to six months’ worth of basic expenses in a mix of short-term CDs and high-yield savings accounts.

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