Being in debt is one condition no one ever wishes to be in. The situation gets worsened when you do not have a well-paying job due to multiple switches or personal reasons or family conditions. New mothers face this condition most of the times when they have to leave their previous job and look for something to work from home in order to take care of the newborn and of themselves as well. Who said life was easy and gets even tougher when you are a little low on finances?
In all this disparity if you happen to be in debt to a creditor, it pricks each and every day. Creditors are known to be merciless. Remember the movie “Confessions of a Shopaholic”? Derek Smeath the credit collector and Rebecca Bloomwood the innocent one in debt. We would never want a collector like Smeath to bug every now and then and embarrass us in from of people. Nor does anyone like cooking up stories like Rebecca had to. Things would not have been so bad had she not lost her job.
But the lesson to be learned from this movie is not to lose hope in any situation. You do not need a hefty paycheck to pay off your debt. You need to act smart. Here are 4 tips on how you can repay your debt on a low income;
1. Revise your spending style
A few changes in the lifestyle, especially spending style can bring about a huge difference in what is left by the end of the month. Positive spending behavior can help you curb false spending habits.
And this is not a child’s play but is not even impossible. You have to prioritize what you want more eagerly- the lavish spending or being debt-free?
For the starters, wait for the season-end sale to shop your favorite apparels or dine out at an averagely priced restaurant. You have a calculator all the time with you in your smartphone, use it to calculate how much you spend on luxury dining. Eat healthy, not expensive.
Take your own good care, by yourself. Do you really need that bi-monthly hair spa when you can do it at home almost one-tenth of the price salons charge or the gym fee you pay either monthly or half-yearly? Massage your hair at home with spa crème or essential oil and go out and run.
You will be pretty impressed by what you would have saved.
2. Work on an alternate source of income
It is not deniable that just saving the money from already low income is quite a task to pay-off the debt. At times, just saving does not help (depending upon the size of your income as well as debt amount). The solution is to look for an alternate source of income. There can be many ways to do so. You can go by traditional methods like taking up a part-time job at a superstore or restaurant or depending upon your skill set at a computer firm. Another way out is to take up weekly or half-monthly assignments which are in accordance with your work type. The best way out is the turn your hobby into work. This is the most sustainable alternate-income-generating-source. You will never get bored of it and later on, if you see fit, you can always take it up as a full-time job. Sell your paintings if you are good at it, give piano or guitar coaching classes, teach, blog, freelance anything, and everything.
Keep in mind that you have to stretch your limits to do both the jobs. Unsatisfactory results at work can lead to a serious problem. So, stay motivated and work hard towards your debt-free life.
3. Negotiate with the creditor
This may sound absurd but it actually happens. If things are not working at present in order to generate more income, talk to your creditor and negotiate for lower interest rates or some rebate in the whole amount. This may take a few calls and visits but you never know which call of yours melts the brutal heart away.
Be honest about your income while you ask the creditor to lower the amount, show your pay-slips as proof.
Sometimes the creditors even offer Hardship programs if they find the case genuine. Make them believe that you are genuinely interested in repaying the debt but are not able to. This will provide with a revised repayment plan which would be affordable.
At times (very few ones), if the creditor senses that you are about to declare bankruptcy, they may settle the debt in totality. Nobody wants a court-hassle.
4. Diagnose and verify your spending triggers
This is the most important ritual you need to practice. Watch your spending behavior. Determine what makes you spend money unnecessarily, those are the spending triggers of yours. For example, I tend to make unnecessary purchases when I feel alone or depressed. Online shopping has made all this easier to do. Currently, I am obsessed with home decor shopping and every now and then keep on checking my favorite apps for price-drop of the things I actually do not need.
Or I just hop into my car and drive to my favorite mall and shop till I drop.
But this is not right. I have started practicing credit-card-boycott i.e. I do not carry my credit card when I go out which makes me think twice before even getting my coffee.
Watch out for those nasty triggers and shun them.
5. Save some for yourself
Yes, it is ironic to the whole story above but trust me it is not impossible. With time when you start working on an alternate income source and have qualified for a hardship program, you will be relieved of a tiny portion from the whole burden. Make the maximum out of it. Save for yourself, your future. Learn a lesson from the debt-situation and start saving right away to make sure no such situation arises again ever.
Start with a small SIP, as low as Rs. 500 (try https://www.piggy.co.in/ ), and save for your emergency funds so that next time you need money, a credit card is not the obvious and only choice.
Start now towards clearing your debts and making some money for yourself. There will never be a day when you have enough to repay, needs and desires keep on increasing with time. Take the help of experts if you find it difficult. Piggy Premier has the best financial experts on-board to help you https://www.piggy.co.in/premier/ .
Get up and get going, make the most of today!