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3 Powerful Techniques on Paying Off Debt Fast And On A Low Income

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How much longer are you going to feel miserable because your low income doesn’t allow you to pay off your debts and live normally?

Is your work hard and drains your energy without giving you almost anything in return (besides sleepless nights and I’m-a-failior feeling) ?

Oh, and a few bucks a month that flies away to cover your debts the moment they enter your account.

You know you have all these debts because of your low income, and you want to pay them off fast but you can’t… because of your low income.

What could you do about it then?

It might seem that finding a new job is the perfect decision, but what if it isn’t an option for you right now?

What if you don’t have any other choice but to stick where you are and do your best with what you have?

In this post, I will show you the exact steps of paying off debt fast on a low income.

Do you know what the scariest thing about having debt is?

You are accepting it like it’s the most normal thing ever.

Because everyone around us has debts, we all struggle financially. It’s “normal”.

The flashing ads with happy people who purchase thousands of things with their credit cards, drive the latest models cars and go on a holiday every few months thanks to the “yet-another loan” they took to make things look OK.

But these people there… they are actors.

Their job is to be happy in front of the camera, get their money and cover their own debts.

The moment we stop accepting our life with debts as something normal is the moment we actually start paying them off.

Method 1 – Action Plan 101 on how to pay off debt fast on a low income

Let’s do some math. I know you never liked doing it, but it’s the main part of the process.

In fact…

I used to do the calculations I’ll show you below at least once a week even though my salary was the same. I was training my brain to accept the numbers and work with them even if I wasn’t working with them if that makes any sense.

To help you with the process I prepared a printable for you. It’s FREE, and you could download it from here.

Step 1: Have a Clear Vision of How Much Do You Owe To The Creditors

On the first page of the templates write down every debt you have. Not only the ones you would’ like to cover but every single debt you have – loans, credit cards, car payments, mortgage, etc.

Write the type of credit in the first column, the initial amount you took in the second column, the amount you’ve got left to be paid (this is roughly the amount you’d want to cover), the monthly payment you do and the date you do it on.

Let’s say that I have a credit card of £2000 and I’ve already paid £500 on it. My monthly payment should be around £80. If I had a loan of £5000 for 5 years, my monthly payment would be around £120. This is how this would look like on the template:

Free Template How to Payff Debts Fast on a Low Income Sample

Step 2: Know How Much You Earn

Usually, that’s the easiest part. We know how much we earn better than how much we spend. And often, that’s the problem.

List the ways you make money. If you do side jobs, write them down. If you get money from selling things – write it down.

For the example here let’s assume I make the minimum in the UK which is £8.21 per hour (at the point of writing this post). This could earn me almost £1200 monthly after taxes.

Let’s write this down on a separate piece of paper.

Step 3: How Much Should You Pay?

To get where we want to be – no debts to pay, and to get there fast we need to pay more to the creditors. At least, more than we do now. Before we get to How to pay more? we should make another stop – How much more should we pay?

I used this credit card calculator to do the math for me. I assumed the APR (Annual Percentage Rate) is 19.95%, and I want to pay off the full amount on the card in less than a year. By paying double of what I already pay (this means £160), I should be able to pay off the credit card in 11 months fully. That sounds realistic to me.

paying off credit card faster

We double the payment and we reduce the time in half.

Credit Card Calculator paying off £160

But what about the loan?

Here’s a screenshot of how to fill the details correctly.


I have £4600 left to be paid off (interest included). My monthly amount is £120, and my goal is to pay it off in 2 years. The same calculator tells me that if I pay £200 a month, I will be able to do that. But if I increase my monthly payment to £203 (yes, that’s a £3 difference), I should finish the loan for 1 year and 11 months. That’s one month of less struggle.

In the two screenshots below you will see this illustrated:

paying off debt fast calculation

Another £3 on top of the £200:

£203 paying off loan fast

Step 4: Where To Get All These Money From?

I could hear you right now: “I thought this post was clarifying that the income is low!!! If I had £160 extra, I wouldn’t need to read this sh**t here.”

First of all – Language!

Second of all – of course, you have £160 more. And I will help you find them.

Open your bank account statement for the last two months and start writing down.

How much do you spend on food? – grocery shopping only

How much do you pay for car insurance?

Life insurance? Any other insurance?

How much did you pay on bills?

Any takeaways last month? Are you going out with friends?

Did you go to the cinema at least once?

Did you get any new devices (a smartphone, a new TV, etc.)

How much do you pay monthly on your phone bill?

Write down every £5 you spent on I-have-no-idea-what.

Step 5: Let’s Find The Hidden Treasures

After having all that written down, let’s split the expenses into three main categories:

My Debts – The full amount you usually pay on debts (loans, credit cards, mortgage, etc.)

My life depends on that – rent, electricity bills, gas, car insurance, taxes, grocery shopping, etc. This category is for everything you need to live a normal life – to have food on the table, water, electricity, to be warm and to have proper transportation to get to work. It does not include your debts.

Everything Else – Yes, you guessed right. Everything else goes in the second category. Your phone, your cable TV, Netflix, takeaways, monthly allowance for any hobbies, pub visits, cinema with friends, coffee at work, whatever isn’t in the first category goes in the second one. It does not include your debts.

Did you find your extra £160? How about an extra £200 or even more?

With all my respect, let me be completely honest with you.

I can bet that 30%-40% of your salary goes into the second category.

Two main things to make all that correctly.

1. Be completely honest with yourself – it is your money, your debts, your life. You could only benefit if you are honest with yourself.

2. Write down every single penny. If your salary is £1200 you should end up with three different categories that sum up to £1200:

Your Debts + Things Your Life Depends On + Everything Else = £1200

On the Template, I suggest you use, you could see a place for it at the end of page 2 – Final Total. This amount has to be as much as your salary is.

Method 2 – One Step At a Time

So far we’ve discussed how to pay off debts on a low income if you attack all of them at one.

However, this is not the only way to approach the problem.

Let’s work with the numbers we already have from our example above.

The second way to pay off your debts fast is by simply redirecting all of the extra £160 to one debt only. In this way, you will pay it off even faster.

Let’s say I decide to allocate the £160 to the credit card first as the interest there is higher than on loan. My regular monthly payment is £80, my extra money to work with – £160. The total is £240, and it would take me 7 months only to pay it off. Wow, that’s before Christmas.

Method 2 £240 credit card first

But what about the loan?

In these 7 months (while I’m paying off the credit card) I will be paying my regular £120 per month. After 7 months I will be left with £3760 to pay back to the bank.

Here’s the thing…

Once you pay off your first debt, you will be used to depart with a certain amount of money every month. Keep doing that. However, redirect the same amount to the next debt. This is known as The Snowball Method.

Let’s say 7 months are gone and I am free from the credit card (Yay!). I will still put aside the same money I used to pay there – £240, but this time I add them to my monthly payment on the loan – £360 (£120 + £240). Let’s go back to the calculator and see how long it would take me to pay off this debt.

Method 2 loan pay off

11 months.

That sounds fantastic!

In total it would take me 1 and a half year to pay back both loans, instead of over 3 years as it was initially.

Method 3 – All Together

The third way to pay off debt fast on a low income requires you to go into another debt.

Many banks offer debt consolidation loans and pay only once a month a larger amount. It is a good option if your interest on the credit cards and the loans is higher than average. However, many times this type of merging the loans could result in even higher APR so be careful.

I would recommend going for it only if you answer with “Yes” to both questions below:

  • Do you have more than 4 or 5 different debts? – If you have 4 or more debts to cover and you really struggle financially every day, this could be the perfect option for you. Instead if paying interests 5 times a month and struggling to keep track of your payments, you will have only one loan to worry about.
  • Do you get paid once a month only and feel like you cannot coop with the payments? – Getting paid once a month is tricky if you don’t do your math regularly. That results in “going on red” a week before you get paid and is probably the reason you are in so much trouble.

By consolidating your debts into one big loan, you could focus on one place only. After that, use the calculator to see how fast you could pay it off.


Paying off debt fast on a low income is hard but not impossible.

People do it al the time, and the fact you haven’t done it yet is because you didn’t put enough effort into it.

Download your free template and see the opportunities.

There are always at least 5 ways you could save money every month. I have listed 7 ways to live within your means in this post.

Also, check how many of these 20 smart money habits you’ve developed so far. Money habits will pay off your loans even faster.

If you often overspend when grocery shopping and you would like to see more options to get better, I introduce you the secret Price Book that will save your life in this post here.

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