How to Get Out of Debt Fast With a Low Income

How to Get Out of Debt Fast With a Low Income

Written by Kale Havervold
Fact-checked by Caitlin Wood
Last Updated October 8, 2019

Dealing with debt is not fun for anyone, especially for those who have a relatively low income. If you have a lot of debt and a low income, it might feel like you will never be able to crawl out of debt. However, this doesn’t have to be the case.

When it comes to getting out of debt, there are always ways, even though it might not appear that way at first. Not only that, but there are ways to do it at speeds that you never thought possible before. Basically, if you are willing to put your heart and soul into eliminating your debt, and make some important lifestyle changes, it can be done.

This article will look at a number of different tips and tricks to help you get out of debt fast, even with a fairly low income. Some will be relatively easy and quick to implement into your life, while others might take a little bit of time and planning. Either way, all of the tips in this article will be instrumental in helping you dig yourself out of debt.

Living without a steady income? Read this.  

Take a Close and Unbiased Look at Your Finances

The first thing you should do when you want to get yourself out of debt fast? You need to take a look at your entire financial situation. How much you have, what you spend, what you make, future outlook for earnings and upcoming expenses are all things that you should think about. Of course, you also need to make a detailed list of all of your debts, so you understand what you are going up against. Once you take a look at everything and preferably make spreadsheets for it all, you will be ready to attack your debt.

Make a Budget

Yes, if you want to get out of debt quickly and effectively with a low income, you will likely need to make a budget. Making a budget is not something many people love or look forward to doing, but it is a necessary evil. A budget is perhaps the best way to know exactly where all of your money is going, by tracking every dollar you spend and save every month. Thankfully, if you don’t like the old method of pen and paper, there are several different types of budgeting software (including YNAB and Mint) out there that make budgeting easier than ever.

Here’s a list of the top budgeting apps for Canadians.  

Educate Yourself

Personal finance is a very complex and difficult-to-understand topic. There is a lot to know and if you want to get out of debt fast, you need to study up. It’s good to learn all the ins and outs of the financial world. If you don’t educate yourself, you will not be able to make much progress. By reading this article and others like it, you are taking the necessary steps to educate yourself on this topic and others like it and you deserve to be commended for it.

If you have children, it’s also important to teach them about personal finance. Click here to learn how.  

Look at Your Expenses and Cut Back

It becomes very difficult to get yourself out of debt when you are spending a ton of money on various expenses and subscriptions. Most people simply spend too much on things they don’t need, it’s as simple as that. Whether it is a cable package, Netflix, a music streaming service, gym or anything else, these can often be very expensive for how little most people use them. While we’re not telling you to ditch every single subscription and cut all your expenses to nothing, it could be a good idea to take a close look and see what you could at least be cutting back on. If you are working with a fairly low income, every dollar counts, so you want to cut down your spending and expenses as much as you can handle.

Trying to get fit on a budget? Read this.

Find Ways to Make More Income, If Possible

If you find it difficult to cut your spending even more than you already are, then you might have to look at making more money. If you have more money, your debts will be easier to eliminate. While this isn’t always an option for everyone, there are a ton of things you can do to make some extra money. Try taking on more hours at work, renting out items or a room in your home, finding a second job or doing odd jobs, taking online surveys, and more. Even just selling some items for some cash to throw at the debt can help.

Learn how to become debt freeCheck out this infographic to learn more about tackling your debt. 

Make More Than Minimum Payments

Simply put, if you just pay the minimum payment on your credit cards each month, you may never be able to get out of debt. Essentially, if you are only paying the minimum, your interest charges are likely accumulating quicker than you can pay down your debt. In addition to that, making larger payments will also help you become debt-free much quicker than if you only made your minimum payments. While you should be aggressive with tackling your debt and make large payments, be sure to save enough money in case of an emergency.

To read more about the minimum payment trap, look here.

Attack Your Debt By Paying off One Balance at a time

If you only have one debt to pay, consider yourself lucky. Many people are dealing with multiple types of debt from multiple sources. With so much debt, it can be extremely hard to get ahead. Most people might think it’s smart to pay off each of their debt a little bit each month. That isn’t normally the best way, as you will likely just be paying the interest. Instead, you should pay off your debts one by one. As far as choosing what order to pay them in, it is generally a good idea to start with the debt that has the highest interest, as this will save you the most on interest in the long run.

Click here for a more detailed look at interest rates.  

Look into a Debt Consolidation Loan

If you are stuck with many different debts from multiple sources, it could be worthwhile to look into a debt consolidation loan. This will involve all of your other debts being wrapped into one, larger loan, which should be much easier to manage. You might even be able to consolidate at a lower interest rate. However, there are many risks associated with consolidation. For instance, once you’ve taken care of your other debts using your loan, you have to maintain responsible spending habits, as you will now have a whole new loan to pay off, which in itself can get expensive if not managed properly.

If your application for a debt consolidation loan gets denied, read this.

Consider Downgrading Your Car

One of the largest sources of debt for most people (outside of a mortgage) is a car payment. Oftentimes, people purchase a car outside of their price range and end up stuck paying hundreds of dollars a month for many years. If you want to get out of debt quickly, it’s a good idea to downgrade from your current car to a cheaper one. By selling your car, hopefully, you will be able to cover the remaining debt you owe. You may even have enough left over to purchase another car with a much lower monthly payment.

Is your car loan more than your car is worth? Click here to learn what you can do.  

Do Your Best to Stay Out of Debt Going Forward

Once you are able to get out of debt, you should do your best to avoid bad debt going forward. You should only take on debt you can handle and never let it get out control. These lifestyle changes you made should stick and you shouldn’t go right back to the way things were before.

For more loans and programs to help you get out of debt, check this out.   

If you follow the tips, steps, and tricks that have been laid out in this article, you will be well on your way to getting out of debt fast. Sure, it won’t be easy and sacrifices will have to be made. However, being debt-free is an amazing feeling and is something everyone should strive for. You will have much more money at your disposal and you will be able to save at a rate you never thought possible.

Rating of 5/5 based on 6 votes.

In his over six-year career as a professional writer, Kale has focused on writing about finance, technology, cryptocurrency, entertainment, and sports. Kale's work has been published on Yahoo, RentHop, the Regina Leader-Post,, and Kale loves to create a wide variety of personal finance-related content. Including everything from how-to guides to featured articles, to advice pieces and everything in between. Whether he’s writing about the newest piece of technology or providing tips to help people with their finances, Kale is passionate about educating Canadian consumers and making sure they have the information they need to make the best decisions.

Click on the star to rate it!

How useful was this post?

Research & Compare

Canada's Loan Comparison Platform

Largest Lender Network In Canada

Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.

Save With Loans Canada

Special Offers

You Could Win Up To $5,000

You Could Win Up To $5,000
Expires Soon

Borrow up to $50,000 from Fairstone and be automatically entered to win up to $5,000!*

View Offer
Earn 5% Cash Back With Neo

Earn 5% Cash Back With Neo
No annual fee!

Earn an average 5%¹ cash back at thousands of partners and at least 0.5%² cashback guaranteed.

View Offer
Build Credit With Refresh

Build Credit With Refresh

Build credit while spending money with the Refresh Financial VISA card.

View Offer
Build Credit For $10/Month

Build Credit For $10/Month

With KOHO’s prepaid card you can build a better credit score for just $10/month.

View Offer
Best Personal Loan Provider by Greedy Rates

Confidential & risk-free

All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.

When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.

Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.

Your data is protected and your connection is encrypted.

Loans Canada Services Are 100% Free. Disclaimer

Build Credit For Just $10/Month

With KOHO's prepaid card you can build a better credit score for just $10/month.