Earning a low income doesn’t mean that you can’t pay off your debts fast. With these simple, but genius tips you can start paying off your debt even if you’re on a low salary. These tips will motivate you to decrease your debt, achieve small wins and lead a financially free life. These are tips and hacks I’ve gathered from countless success stories of people who cleared their debt quickly whilst living on small income, so you definitely know it’s possible.

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Debt Repayment Tip #1

Agree a settling payment. Some debt companies will allow you to pay a lump settling sum which wipes off the rest of your debt. If you have been consistently paying your monthly debt off, even if it’s in small increments, they may enable you to get rid of the rest of your debt providing you can pay a heavily reduced fee. It’s definitely worth checking if your debt company will do this, as they often will not openly advertise they do this for obvious reasons!

Debt Repayment Tip #2

Ask if your default payment is the lowest it can be. Speaking of small payments, again, ask your debt company if you can reduce the monthly payment on your debt. If you’re on a low income and are struggling to pay off your debt, it could be that their default monthly repayment figure is too high for your earnings.

Debt companies would rather you call them to conduct what they call a full financial audit, where you just tell them what you spend your money on, and reduce your payment, rather than have you miss payments. Why? Because this costs them money to solve. Calling a debt advisor or debt collector out costs the debt company money, and they don’t want to do that.

Debt Repayment Tip #3

Conduct a financial audit of your own. To establish just how much you can really pay off your debt, you’re going to want to conduct a financial audit. This helps you to analyse where you are spending your money, where excess expenditure can be cut down, and how much free income you have left at the end of the month. Write down all your debts, credit card loans, interest rates and default payment for each.

Once you’ve figured out how much you can realistically pay, you’ll want to pay the debt with the highest interest rate first. Each company will want regular payments, but make sure to target the highest one with the highest interest rate straight away.

Debt Repayment Tip #4

Set SMART financial goals. SMART goals can be useful when figuring out how to pay off debt quickly. To make sure your financial goal is attainable, you’ll want to make sure it’s SMART. This stands for;

  • Specific
  • Measurable
  • Achievable
  • Relevant
  • Time-bound

Each debt repayment goal should be SMART. This will help you to stay on track and get rid of your debt quickly even if you’re on a low income.

Debt Repayment Tip #5

Start as you mean to go on. Once you’ve done your financial review and set SMART goals, you’ll want to create a monthly budget that takes into account all of your current debts. You’ll also want to assign every single dollar you earn to cover your four walls; this includes bills, food, clothing and anything home related. Depending on your income, you’ll want to save around 5-10% of your earnings solely for debt repayment.

Debt Repayment Tip #6

Diversify your income sources. But if you find you don’t have enough money to cover everything, you’re going to need to up your average monthly income, at least short term to pay off your debts. Whilst to some people this means working a second job, to others this will mean starting a side hustle or finding some passive income ideas, or even finding stuff to make and sell online. Did you know that the average millionaire has 7 different income streams?

Related: 13 Super Profitable Things to Make and Sell For Extra Cash

Debt Repayment Tip #7

Cut wherever you can. You’ll be surprised just how much extra money you’re needlessly spending in areas such as groceries and utilities. For saving more money on your groceries, you’ll want to look into meal planning, bulk buying for the week as well as brand swapping.

Related: 5 Easy Ways to Cut Your Grocery Bill in Half

Whilst switching utility suppliers can be a hassle, you could be paying an extra $100-150 a month just by staying loyal to one provider. Utility companies often offer better rates for new customers right until their 18 month contract. Depending on your income, you may want to consider swapping suppliers every 18 months to make sure you’re getting the best deal.

Debt Repayment Tip #8

Trim out unnecessary expenses. Making your own lunch for work, and buying tea bags for the office can save you money in the long run. Whilst cutting out your $5 coffee alone isn’t going to pay your debt, it doesn’t hurt to trim out unnecessary expenses.

Debt Repayment Tip #9

Try the snowball method. Paying off large amounts of debt can be overwhelming, especially when you don’t know where to start. Consider trying the Snowball method, coined by personal finance expert, Dave Ramsey. Ramsey recommends listing your debts from highest to lowest and begin by paying off the lowest debt first, whilst still keeping on top of the minimums for the rest.

This is best of a psychological mind trick that works well. It gets you excited to pay off your debt because you can see short term wins. The con to this though is that your lowest debt might not be the debt with the highest interest rate, and so you could end up having to more slightly more on that one, but this tip is definitely a good place to start if you’re completely overwhelmed by a mountain of debt.

Debt Repayment Tip #10

Establish sinking funds as soon as possible. Sinking funds act a bit like an emergency fund, except sinking funds are put aside for a known, reliable source of payment i.e. debt repayment, monthly gym membership, birthday presents etc. It’s a bank account put aside purely for known circumstances where you will have to pay money.

Sinking funds prevent you from spending all your money in one go, and make sure you have money left to pay your debts. Ideally, you’ll want to deposit some of your monthly pay packet straight away into a sinking fund account.


Having a low income doesn’t mean that you can’t pay off your debts. Whilst it may take longer than someone who has a higher income, you’ll be surprised just how quick you can turn your credit score around once you follow some simple financial advice. As always if you’re defaulting on your payments or are struggling to keep up, it’s best to call a financial charity for a free debt consultation. They will be able to give you personalised advice to help you out.

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