Most people have at one point during their life been in debt. Getting paid your salary and only just clearing your overdraft each month, before other bills come out, can be a daunting future for anyone. From my experience of being in red, here are some tips that helped me get out of debt whilst on a low income.
Focus on high-interest debts
Most banks charge up to 39.94% variable for going overdrawn, a lot more than most standard credit card rates. Tackle where your biggest interest rates are first, it is not always on your credit card. If you are in debt with a credit card, consider a 0% balance transfer for a set period of time. You essentially transfer debt from one card to another card but don’t pay any interest for a period of time (usually just a small transfer fee).
Saving is much easier when you have a list of regular incomings and outgoings. There are a number of free budgeting templates available to download on your phone app and accounts like Monzo are great for budgeting and recording your spending.
A blind test of 100 consumers found that 95% could not taste the difference between a supermarket own brand porridge and a more expensive version. A few pounds here and then during a weekly grocery shop run, but things can quickly begin to add up. Try using loyalty apps on your phone when you shop regularly at a shop. Check out the Shopmium app – it rewards you cashback on a number of products at most supermarkets (from Sainsbury’s to Asda).
The app encourages you to turn your shopping trip into a “find the free stuff” game. You just scan the offer items from your phone when you are at home. Download the Shopmium app on Google Pay and the App Store and get a free can of Pringles with the referral code ga8yq3. Once registered you can tell your friends too and receive £3.
Avoid Impulse buys
Most people love treating themselves, but when you are on a low budget, those treats can really add up. Here is a simple checklist to minimise unnecessary purchases:
- Do you really need it? (Answer honestly!)
- Can you afford it?
- Will you still want this item in a week’s time?
Cancel unused memberships
Cancel those subscriptions you don’t use much. From watching your team occasionally play on Sky Sports, to watching a new series on Netflix to using that singing App you never use – it all adds up. You can get all these things again when you are out of debt, guilt-free.
Make Extra Money
Consider doing a side hustle to make extra money outside of your salary. This could range from blogging, tutoring to even focus groups. Check out my article on side hustles that work.
Switch providers after the contract ends
Many of us know we are not always getting the best deal on our energy bills, phone contracts, or bank accounts but think it is too much of a hassle to change. The major firms know this and even offer incentives to win potential new customers over into doing business with them. On Great Deals Made Easy site there are some great broadband deals and also a £50 referral bonus for moving to a renewable energy company, Octopus Energy. Several banks pay a generous amount if you switch over and use them as your main bank account; in fact, you can change bank accounts several times to take advantage of the free money incentives.
Other bloggers with Debt reduction tips
Please check out some top bloggers with useful tips to share:
–Become Debt Free: 5 Things You Can Do by Emma at Bee Money Savvy.
–8 best ways to pay off debt by Money Savey Mum UK.
–Let’s Talk About Debt: Debt Awareness Week by The Reverend.
–7 steps to pay debt faster by Miss Manypennies.
–5 Amazing Debt Charities That Give Free Debt Advice (National Debt Awareness Week) by Cashback Collette.
–10 steps to get out of debt by Broke in Bristol.
–How I Paid off £12,000 in 2 Years by Financially Independent.
–What can a debt adviser do to help? by Squanderlust.
–Embrace frugal living to pay off debt by Shoestring Cottage.
–Let’s Talk About Debt by Mrs Mummy Penny.
–Drowning In Debt? 9 Ways To Build Yourself A Life Raft by Young Fun and Thrifty.
Hope these tips help you. If you want to save money fast on a low salary, check out the article. For saving tips for 2021, find out how you can save with the UK top money bloggers. Need to save money quickly? Check out some top articles. Finally, for more ideas on earning money from home, read the exciting article now. Other useful posts include how to start an emergency fund online in the UK, ideas on how to earn money from home in the UK, a guide to ethical shopping in the UK. GreatDealsMadeEasy tip – Check out a £50 Octopus Energy for a balance between value, customer service, and ethical ratings.