If you have a dime in your pocket and no outstanding debt, you are wealthier than a majority of the country. Most Americans have over $15 thousand in credit card debt alone. When you add the average student loan debt of $40 thousand, and car loans, and mortgages, it is not surprise that 20% of Americans are considered to be in “debt hardship.”


If this is you, we’ve put together a guide help paying off your debt, even if you have a limited income.


Four Steps to Take Charge of Your Debt

1. Calculate Your Debt and Make a Payment Plan
   
   Sometimes, we feel so overwhelmed by the bills hanging over our head that we just try to pretend like they aren’t there. When you get out a pen and paper and calculate your debt, it removes the mystery that makes getting ahead of your mountain of debt feel overwhelming. You aren’t going to accidentally get out of debt; you have to have a plan to get yourself ahead, and you have to calculate your debt in order to create a plan.
   
   
   After you calculate your debt, rank your debtors in order of what should be paid off first, and then figure out how much extra money you can spare to get towards your goal. We imagine you’re probably shaking your head and saying, “I can’t spare anything! That’s what got me into this mess.” We’ll get to that part later.
   
   
   Another point that is worth noting is that if there is no way you’ll ever get ahead of your debt, you might benefit from working with a debt consolidation management company, who will negotiate payoff settlements with your lenders and create one manageable payment for you. Keep that in the back of your head, there is hope for everyone, no matter what.




2. Set Up Automatic Deductions
   
   So now you have an idea of your debt situation, and a plan for getting it paid off. In an ideal world, you’d simply follow that plan and get yourself out of debt, right? Well we don’t live in an ideal world. In reality, unplanned costs arise. They definitely arise more than unplanned money falls in your lap. Actually handing your hard earned money over to your creditors when you technically do not have to is painful.
   
   
   When you make your payments towards your debt manually, it’s easy to think, “Money is tight this week. I’m going to skip this payment, and get back on track next week.” Pretty soon, you’re back to your old habits and nothing changes. On the other hand, when you figure out how much you need to pay towards your debtors and set it up with an automatic payment, it removes the factor of human nature that prevents you from sticking with it.
3. Cut Back on Spending
   
   Okay, we know this is really a no-brainer. We would say to skip your morning latte, but if you’re broke, there’s a good chance you don’t have that luxury as it is. But take a look at the last three months of bank records, and make a list of where the majority of your money goes. You might find little ways that you could tighten your belt.
   
   Do you go out to eat often? Do you pay for cable? Could your internet be reduced to a lower speed? Do you subscribe to monthly services that you could live without? Maybe most of you money goes to groceries. You could probably cut a chunk of your grocery bill by shopping sales, switching to generic brands, and cutting back on extravagances. The money you save can go towards your goal to get out of debt.




4. Get Creative About Bringing More Money in
   Maybe there’s no way to tighten your belt any tighter while still enjoying life (which you deserve to do, no matter how much debt you’re in). You can find creative ways to bring more money in, that you can throw at your debt. Perhaps this means having a yard sale. Perhaps this means using skills you have to make a little more money on nights and weekends (think: tutoring, babysitting, doing odd jobs for neighbors). This extra money can go towards your debt, and get you a little closer to financial freedom.

Do you have any tips to add? Share below!