Managing debt can be a struggle especially when working with a limited income. However, by making a plan and prioritising debt repayments wisely it’s possible to make steady progress toward financial freedom.
1. Assess Your Debts and Income
Begin by listing all of your debts, credit card balances, personal loans, medical bills, or other obligations. Include interest rates, minimum payments, and due dates for each debt.
Next, calculate your monthly income after taxes. Understanding exactly where you stand financially gives you a clear view of how to tackle each debt effectively.
2. Create a Basic Budget to prioritise debt repayment
Outline a budget that covers all your essential expenses, such as rent, utilities, groceries, and transportation. Whatever remains is your available income to priortise debt repayments. A realistic budget helps you stay on track and avoid overspending.
You can also out our Free Online Budget Calculator. It breaks down all of your expenses so you can determine how much money you have left over each week to spend.

3. Consider the Debt Avalanche or Debt Snowball Method
There are two popular strategies for prioritising debt repayment:
- Debt Avalanche: Focus on paying off debts with the highest interest rates first. This method can save you more in interest over time.
- Debt Snowball: Pay off the smallest debt first, then move on to the next smallest. This strategy offers quick wins and a morale boost as you see debts disappearing.
Select the method that best suits your goals and personality. The avalanche method might save more money in the long run, while the snowball method may keep you more motivated.
4. Look for Extra Income Opportunities
Finding ways to bring in a bit of extra income each month even if it’s only temporary it can help you pay off debt faster. Consider part-time work, freelancing, or selling items you no longer need. Every little bit helps reduce your debt burden.
5. Set Up Automatic Payments for Minimums
Missing a payment can lead to late fees and a negative impact on your credit score, which is why it’s essential to make at least the minimum payments. Setting up automatic payments ensures you won’t miss any deadlines, even when things get tight.
6. Negotiate with Creditors
If you’re struggling to keep up with minimum payments, reach out to your creditors. Many creditors offer hardship programs, which can reduce your interest rate or allow for smaller payments temporarily. Negotiating terms can provide some breathing room while you work on repayment.
7. Use Windfalls Wisely
Any unexpected income, like tax refunds or bonuses, should be used to pay down debt. Applying these lump sums directly to your debt can give your repayment plan a major boost, saving you both time and interest in the long run.
8. Cut Down Non-Essential Expenses
Look for areas in your budget where you can cut back, even if it’s just temporarily. Small sacrifices, like reducing streaming services or eating out less, can free up extra funds to put toward your debts.
9. Stay Consistent and Review Progress Regularly
Debt repayment on a low income takes time and persistence. Celebrate each milestone, even the small ones, and review your budget regularly to ensure you’re making the most of your money. Staying motivated is key to reaching your goal of becoming debt-free.