Hey – thanks for stopping by to read about single women and busting debt! The fourth in the series of becoming a financially savvy single woman. This series is aimed more at lower income women. Women who are high income earners will probably have trouble relating.
Read Part 1: Single Women and Banking
Read Part 2: Single Women and Choosing Basic Financial Services
Read Part 3: Single Women and Investing
Bust your debt
We’ll never be financially free as long as we have debt. Especially when it’s bad debt, like a credit card or high interest loan.
One of the steps to becoming a financially savvy woman is figuring out how to bust debt and then staying debt free.
I don’t make a lot of money and can’t afford to use my credit cards and go into debt. Most of my past credit card debt was due to dental work, car repair bills, vet bills, and living expenses to help me through bouts of unemployment. It was hard getting rid of that debt and once I became debt free, I was determined to stay that way.
So you need to look at debt the same way I do before you whip out that credit card.
Can you afford to go into debt?
Taking control of debt on a low income
It really bugs me when I read what is supposedly an inspirational article about how to bust debt, only to realize the people featured in the article have a six figure income or dual six figure incomes! They got into debt by buying a big house, lavishly furnishing it, buying expensive cars, and taking luxury vacations.
Who can relate? Not me! Most of us got into debt just trying to survive. We don’t make enough money to cover our basic expenses: housing, food, and transportation. Forget luxury vacations. For us going to the dentist is a luxury.
This is our reality of how we got into debt. Survival mode!
We need real advice for real women! Our debt probably didn’t happen because we have wild out of control spending habits.
Many single women are lower income earners. Less income means less ability to deal with debt. Lower salaries mean women have more problems saving money and paying down debt.
We’re overwhelmed. We don’t want to open the credit card bills when the mail comes because that means facing the harsh reality. How are we going to make the minimum payment? Paying off the debt in full seems like a fantasy that will never come true.
Here’s how you start:
1. Acknowledge you owe money.
2. Gather up credit card statements and other loans and add them up.
3. Use a spreadsheet to write down what you own, interest rate, and minimum monthly payment.
4. Decide if the debt avalanche or the debt snowball works better for your situation.
5. Tackle one debt at a time. Pay off one debt and then move onto paying off the next debt.
No more debt!
1. First thing – incur no further debt! Cut up or put away your credit cards. No more unnecessary spending.
2. Gather up all your debt obligations and figure out whether to use the debt snowball or the debt avalanche to repay the money.
3. Find extra money by lowering expenses. What can you live without for awhile until the debt is paid off?
4. Is there an opportunity to find another job or work overtime to get more income?
5. Use credit card offers to transfer credit card debt to another card that has a zero or low interest promotion for a few months.
6. Find a non-profit credit counselling program in your area for assistance.
When you’re trying to pay off your debt, the most important thing is to avoid using your credit cards, or doing anything else to increase your debt.
It doesn’t matter if you’re trying to find extra money to pay off debt or save for your retirement (or something else), the advice is going to be pretty much the same: figure out how to make more money and trim expenses.
Published by Cheryl @ The Lifestyle Digs on March 6, 2022.