These Steps Will Help You Pay off Debt When You Make Less Than $50,000/Year
Lots of us make less than $50,000 a year. We’re not doctors or lawyers or CEOs. We’re not the people who are buying luxury cars, first-class airline tickets or bottle service at the club.
We have to think twice every time we buy new shoes or a steak dinner.
And that makes it tougher to pay off our debts. Because the cost of living is so expensive, we rarely have much left to pay down the balances on our loans and credit cards.
You can still do it, though. We have some ideas for you.
Most of Us Earn Less Than $50K
A lot of us are in the same boat, you know. Roughly 70% of American workers earn less than $50K, according to the Social Security Administration. The average salary is nearly $47,000, but that average is a little skewed by the high earners who are pulling in six figures. The median salary — the one right in the middle — is more like $30,000.
Here’s a more painful statistic:
The average household with credit card debt has a LOT of it: $16,748, according to a survey by NerdWallet.
How can you possibly pay off your debts?
We’ve got tips for how to come up with the extra money you’ll need.
1. Let This Company Pay Off Your Credit Cards
When you think about how much debt you have, you might feel a little anxious — especially if you’re earning less than $50,000.
That’s where a company like Fiona can be helpful. It can help you find personalized lending options to refinance or consolidate your debt to potentially save thousands of dollars in interest.
Fiona will show you all the lenders willing to help you pay off your credit card and eliminate the headache of paying bills by allowing you to make one payment each month.
If your credit score is at least 620, you can borrow up to $100,000 (no collateral needed) and compare interest rates, which start at 4.99%. The idea is to secure a loan at a lower interest rate, potentially helping you save thousands. Repayment plans range from 24 to 84 months.
Take, for example, Katherine, who faced $12,000 in credit-card debt. Holding her back? The 15.24% interest rate. By refinancing with a 5%-interest, seven-year personal loan, she saved $12,000 in interest.
If she’d kept on the same road, she would have paid something like $14,000 in interest alone over 25 years. Yikes.
So even if you’re simply curious about what’s out there, know that checking rates on Fiona won’t hurt your credit score — and can probably save you in interest.
2. Knock Up To $715/Year Off Your Car Insurance in Minutes
When was the last time you compared car insurance rates? Chances are you’re seriously overpaying with your current policy.
If it’s been more than six months since your last car insurance quote, you should look again.
And if you look through a digital marketplace called SmartFinancial, you could be getting rates as low as $22 a month — and saving yourself more than $700 a year.
It takes one minute to get quotes from multiple insurers, so you can see all the best rates side-by-side. Yep — in just one minute you could save yourself $715 this year. That’s some major cash back in your pocket.
So if you haven’t checked car insurance rates in a while, see how much you can save with a new policy.
3. Find Some Hidden Cash
Before you start hashing out a plan to tackle your debt, it might make you feel better to find areas in your life where you can save. Then you can funnel that money directly toward those outstanding balances.
Sure, a lot of us know how to save money on groceries, but what about everything else?
For consistent savings, download Truebill, an app that’ll negotiate your bills, cancel unwanted subscriptions and refund your bank fees. On average, Truebill customers get $12 in credits off their cable bills each month.
You can also try digging up some extra cash with Capital One Shopping Price Protection — a tool that gets you money back for your online purchases. It’s free to sign up, and once you do, it will scan your email for any receipts. If it discovers you’ve purchased something from one of its monitored retailers, it will track the item’s price and help you get a refund when there’s a price drop.
One of our favorite ways to save on everything is with Ebates, a cash-back site that rewards you nearly every time you buy something online. For example, Ebates gives you 10% cash back on online purchases at Walmart. Plus, you’ll get a free $10 gift card to Walmart for giving the site a try.
Disclosure: Capital One Shopping Price Protectioncompensates us when you sign up using the links we provide.
4. Earn Rewards When You Repay Your Debt on Time
When you were a kid, your mom probably gave you an allowance for washing the dishes and sweeping the floor. Now all you get for doing that is a kitchen that’s clean for, like, 15 minutes.
Now that you’re a grown-up, you no longer get rewarded for just doing the things that are expected of you — like, for instance, paying bills on time.
Not until now, anyway. MoneyLion, a free app for managing your personal finances, will reward you for things like paying your bills and monitoring your credit — even just setting up an account in the app.
Much like that childhood allowance, it’s basically bribing you to be good.
You’ll earn points in the app’s rewards program, and you can redeem them for gift cards to more than 15,000 retailers, including places like Walmart, Applebee’s and Amazon.
If you want to take it a step further and work on paying down debts, for example, MoneyLion can help with a loan to consolidate your debt and potentially reduce your interest rates. And it’ll reward you for that, too!
5. Start Saving Without Trying
Saving money is tough. So what if you could do it in a way where you wouldn’t even notice?
Digit makes that possible.
This innovative app automates saving for you. Simply link it to your checking account and its algorithms will determine small (and safe!) amounts of money to withdraw into a separate, FDIC-insured savings account.
Bonus: Penny Hoarders will get an extra $5 just for signing up! Additionally, savers will receive a 1% bonus every three months.
Using this set-it-and-forget-it strategy, one Penny Hoarder saved $4,300 without noticing — read his Digit review.
If you need that money sooner than expected, you’ll always have access to it within one business day.
Digit is free to use for the first 30 days, then it’s $2.99 per month afterward.
Bonus: Make Extra Money Hanging Out With Pups
If you’re looking for a flexible, independent way to earn money — and you love hanging out with dogs — Rover might be your perfect gig.
The online network connects dog walkers and sitters to local dog owners through its 4.9-star-rated app, so you don’t have to staple flyers on every utility pole across town.
Rover says sitters can earn as much as $1,000 a month.
Rover dog-sitter requirements vary by location. In general, you must:
- Be 18 years or older.
- Pass a background check.
- Have access to the Rover app (iOS or Android).
Here’s how it works: You’ll create an online sitter profile where you’ll answer questions about your experience with puppers and your schedule availability.
You can choose to offer a variety of services, including dog walking, overnight boarding at your home or theirs and daycare. Boarding is the app’s most popular service, so offering it can get you more gigs. You set your own rates. (Rover keeps a small percentage as a service fee.)
Dog owners will reach out to you. Accept which gigs you want, then start snugglin’ pups. As soon as you complete a service, you’ll be paid within two days.