5 tips for getting out of debt on a limited budget

BY SIENNA BEARD WITH THE CHEAT SHEET | Source: Fidelity

Wouldn’t it be nice if all debt would just magically disappear? Debt can be so daunting, especially if you are trying to pay down your debt on a very limited budget. When you don’t have much extra money, making debt payments can seem like a waste of money or even seem impossible. It’s also easy to get frustrated when you have a large amount of debt and so much of your payments goes toward interest.

However, you are almost always better off making even a small payment, rather than no payment at all. If you don’t have an emergency fund or you are barely scraping by and can’t even pay your current bills, then you may need to focus on those issues now. However, if you have any available funds, you should be paying off your debt. Here are 5 ways to get out of debt even with a limited budget:

1. Make a payment plan

If you want to get out of debt, particularly with a strict budget, you need a plan. Start by determining just how much debt you have and writing down the different lenders that you owe money to. Then, order your payments by which debt you think needs to be paid off first. (You can determine this by looking at the amount owed, the terms of the loan, and the interest rate.)

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