Tag: debt


How to budget on low income – Simple Guide!

How to budget money on low income? Money certainly does not grow on trees and that means we all need to be a little clever with the cash we have, to try and make it go that little bit further.

In addition to this rather annoying lack of a money tree situation, it’s also a truth that most of us aren’t earning as much as we want to, or as much as we believe we deserve.

For most of my young adult life I was living with little money due to me drowning in debt! This was because of my lifestyle at the time, I was living the highlife and spending money like it didn’t exist.

Over time I learned how to budget myself and adapt to my situation. I have paid a big chunk of debt off and now I’m in a much better place financially.

Living on a small budget is possible and many people do it. With prices of literally everything on the rise and minimum wage not keeping up, more people are looking to find ways to live with less money.

Today I will be talking you through 10 tips on how to budget on low income.



How to budget on low income

Honesty is the best policy

It’s no-good setting a budget and not being honest. That would be a complete waste of time!

Sure, it might be painful to sit down and write how much money you have coming in, how much money you have going out, and then trying to divide up the bit that’s left, but it’s a necessary evil if you want the whole process to work for you.

Nobody else has to see your budget, so make sure that you’re honest with yourself.

Many people also find the process of writing these figures down to be quite cathartic and it often proves to be a wake-up call – it might be a rather shocking wakeup call – but it works nonetheless!


Set Up a Budget

Secondly, you need to think about setting up a budget.

Making a budget is fairly simple. It’s following it that becomes difficult.

For example, you would first write down your income for a month at the top. Next list every single expense that needs to be paid monthly. So that includes, rent or mortgage, electricity, water, and even groceries, car payment, and car insurance.

The list goes on. Everyone has different expenses so be sure to list yours and the expected amount of that expense.

Next, you simply subtract all of your expenses from your monthly income and you will have your final amount. By writing everything down on paper you get a very good visual of where all of your money is going and if you need to make any changes to your expenses.

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Track your expenses

No, I don’t mean keep a mental log in your head (although I’m totally guilty of doing that sometimes). I mean actually tracking your expenses – this is an absolute must when you’re trying to save on a low income.

You need to know where your money is going before you can actually start saving.

If you’ve never done this before, this advice applies to you. Track your expenses for one month, starting today.


Tracking your spending for even just a month will give you a far clearer picture of where your money is going and what you need to work on in your budgeting plan.

I’ve listed a few awesome Money Trackers below for both UK and US readers:

These are all completely free to sign up to, so take advantage of the software and have a go at tracking your spending and finances for the month.

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Analyse your spending

First, learn how much you spend each month, and then use that data. Identify where you probably spend more money than you should and work to reduce the spending in that area.

Small changes, one after the other, is what really starts a frugal habit.

Analysing my spending is what makes living on a low income while travelling possible for me. We know how much we earn, how much we spend each month and what our limit is.

Sure, our spending isn’t always perfect and things don’t always go to plan – but arming yourself with some knowledge about your spending is the best first step.

Always, always shop with intention. This is where the list and weekly meal plan comes in. I’ve realised that going grocery shopping without really knowing what we’ll be cooking for the rest of the week, just leads to me over buying.


We pretty much always end up wasting food, which means, we’re wasting money.

Now, before we go grocery shopping, we always make sure to create a weekly meal plan, make a list of what we need and always stick to it. That’s the most important part – sticking with the list!

If you want to start cutting your spending and save more money, you always have to look at what you’re buying. Be aware of where your money is going and make smart choices.

Saving money and living with one income is not easy but it’s also not impossible. I’ve learned that with just a few tweaks and changes in our spending habit, we can even end up saving more money than we anticipated.


Set financial goals

Not only do you need to know why you want to start budgeting in the first place, but it’s also very important to think in terms of specific numbers.

How much debt are you hoping to pay off each month? How much money do you want to put aside in your emergency fund? How much will you be saving to go toward your retirement?

You cannot budget with the vague idea that you want to “save up some money”. Focus on numbers and focus on facts.

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Want help setting goals? See my post for setting SMART financial goals:



Eat at home as much as possible

Eating out is a nice treat for every now and again, but when you get into the habit of dining out because you can’t be bother to cook, it becomes and expense game.

After a long day a work, when you’re tired, it’s just the easier option. I’ve done it before, we’ve all done it at one point of time. The thought of cooking after a stressful day is a chore, but there are ways around this.

Batch cooking food is a great way to give yourself a break from the kitchen. For example, you could cook a batch of meals at the weekend and then freeze them. Each day you will then have a meal prepared without having to cook from scratch.

I do this with my workout meals for the week, it saves me a lot of time.

For a family of four, just by eating out a few times a month, you are talking about a few hundred pounds/dollars per month, if not more.

Top tip:

Supercooks is a website that helps you re-create recipes from leftovers.

Just list out the ingredients and let SuperCooks tell you what to cook! Never again will you have to stare at those leftovers in the fridge and wonder what to do with it.



Resist impulse purchases

Have you ever walked into a shop to get something small, such as shampoo and you ended up leaving with a bunch of items that weren’t on your shopping list?

Don’t feel bad if you said yes. It’s called impulse spending and marketers are really good at encouraging consumers to make impulse purchases. This is an unplanned decision to buy a product (or service) right before the purchase is made.

Nearly 78.2% of Brits have succumbed to the temptation to impulse online shopping, according to a recent survey. While it might seem like an impulse buy here and there is harmless, it can sabotage your goals such as paying off debt, building your emergency fund, or saving for a large purchase.


Use vouchers/coupons

Take advantage of coupons/vouchers to save money.

Honey is a great website for finding vouchers from thousands of retailers online. I have saved money when making purchases on clothes through Honey on several occasions.

Also, Latest Deals is great website for bargains and deals.

While saving money you also earn points though the above sites, which can them be redeemed into a giftcard of your choice.

These sites are no brainer!

Want to find out more about these two sites? here is my posts for Honey and Latest Deals.



Cancel unnecessary subscriptions

Have you ever fell into the trap of starting a trial and then you forgot to cancel your subscription at the end of the week or month? Me too! Companies prey on those who are forgetful! Don’t get me wrong, if I love their service and it’s something I need, I will absolutely pay!

Sometimes, unnecessary subscriptions can be magazines, tv show/movie services, shopping and delivery services or educational programs. Analyse and decide if you really need each.

For example, I have decided that I no longer need to pay a membership fee to get certain products in two days.

I’ve also decided that my subscription for Shutter was not necessary as I wasn’t watching it anymore! Therefore, I cancelled them both. Simple living to save money!



Use cashback shopping sites

I use cashback shopping sites such as TopCashback or Quidco for my online purchases. Cashback sites are a way for you to save money every time you shop online at one of its partner retailers using a link from the cashback website.

A percentage of the purchase is returned to you as a cash back rebate when you complete your purchase. Cashback shopping sites offer cash back at thousands of stores and they are free to use.


I use both TopCashback and Quidco to shop online and like them both. I usually check to see which of the cashback sites will give me more money back on my purchase and then shop through that cashback site for my specific purchase.

Rakuten is a great cash back site for those over in the US. In addition, you’ll find thousands of coupons and promo codes from Rakuten. Every quarter Rakuten mails you a cheque or PayPal payment with the cash back you received from shopping online through them.


How to budget on low income – Final thought

So that’s it! These are the actions I recommend to live on low. By putting this into practice, you will definitely start to see the pounds/dollars adding up at the end of the month. And who doesn’t like extra money in their pocket?

What about you? Are you trying to achieve financial freedom? Are you working towards becoming debt free? Is there anything else you’d add to this list? Share with us in the comments below. I’d love to hear from you!

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14 Habits of Debt Free People – Simple Guide!

Today I will be discussing 14 habits of debt free people and how they can adopt

Have you ever considered being debt free to be a habit? It’s probably not something we would consider often. We think of habits as things like eating healthy and exercising, something that is a regular practice. But being debt free definitely falls into this category.

You see, spending money is a habit, accumulating debt is a habit and therefore breaking this habit requires the creation of another habit – one that is the habit of being debt free.

t is a conscious choice, an effort and a decision that is made, to be debt free, and there are habits that those who are debt free have. Things that help them remain within their free of debt status, and it’s not as simple as creating a budget.

If you’re on the path to becoming debt free, then it’s a good idea to start creating some of these habits for yourself. Don’t stress about trying to add them all in at once – that’s the thing with habits, they take time to create (and that’s okay).

Perhaps you already do some of these things? Or maybe you’re looking for new habits to add in.

Either way, here are 14 habits of debt free people that you can adopt into your life too.



14 Habits of Debt Free People 

They stick to a budget

Budgeting. Such a dirty word for so many people, but it doesn’t have to be. Having a budget is the best way to make sure you never end up in debt again.

When you have a detailed budget, you know exactly where your money goes and when it needs to go there! This means that there are no surprises and a much smaller chance that you’ll have to use an emergency credit card.

People who are debt free love a good budget because chances are that is exactly how they got out of debt in the first place!

Related post:

Would you like to know how to create a budget, but don’t know where to start? Then see the post below:



They save save save

This might sound strange but it’s so important to save. If you truly want debt-free living then saving must become normal to you.

For the longest time, we didn’t save any money, partly because we felt that we weren’t in a financial position to be able to do so but also because we just weren’t used to it.

Saving actually felt like a punishment.

In order to save money, you have to have a positive attitude towards it.


You must habitually, purposefully do it otherwise you won’t do it at all. Believe me, I’ve been there.

In the past, the only time I have successfully managed to save was when there was something that I really wanted and my goal was to reach it.

Like the time we needed a bigger house or the time we needed a second car.

Set yourself saving goals, long term ones as well as short term goals. This will make it so much easier for you to save up your money.



They track their spending

Debt-free people always track their spending and are always aware of their money routes. If you will not track your spending, your budgeting will not be as efficient as it should be. Before budgeting for your next month, when you track your last month’s spending, it becomes easy to create a budget and make any changes you need for your next month.

You might agree with me that every purchase we make seems to be very important to us. We are living in a materialistic culture, where much of the attention is given to owning things, even if we don’t need it. I think you will agree with me on this one that If you want to be debt-free, you have to track your spending and figure out the unnecessary purchases.

It will be easy to figure out your budget when you know, exactly where your money is coming and where it is going. There are a lot of apps to track your expenses but you can do it old school way also. Take your pen and paper, and start writing down your expenses. This is the best habit you can develop to stay debt-free.

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They live below your means

Living below your means basically means that you spend less than what you earn. It may sound obvious and simple, but the reality is that many people spend all of their income each month.

It is easily done, especially if you do not have a budget in place or do not look at your bank statements.


If you look at many successful people, you can see that they live below their means. What this means is that they do not spend all of their pay-cheque each month – they save a lot of it instead.

If you want to get out of debt and stay out of debt, living below your means will be the key to doing so. You aren’t going to get anywhere fast if you waste all of your money each month!



They have a financial goals

Having financial goals is great because it keeps you motivated to work towards something you actually want to achieve.

Financial goals are very subjective and not one size fits all. One person’s financial goal might be to become a millionaire by 50, and another person’s goal might be to get out of debt by 30. It all depends on you and your specific circumstances.

Once you know what your goals are related to your finances, you can start coming up with a plan.

If you are someone who has a lot of debt and wants to pay it off before you turn 30, look at how much you owe. Then, calculate how much you would have to pay every month until you reach 30 to pay it all off.

Sometimes, you may find that you can’t reach those goals in the exact time-frame you set out for yourself. And that’s ok. In that case, set smaller goals which will ultimately get you to your bigger goals and to where you want to be with your finances.

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Would you like to know how to set SMART financial goals, but don’t know where to start? Then see the post below:



They have an emergency fund

Take some of the stress out of life by building up a solid emergency fund for rainy days.

It’s not a case of if you’ll need that money someday, it’s when.

Boilers break, cars need repairing, jobs don’t work out and unexpected bills can land on your doorstep at any moment. If you’re not financially prepared for these situations, then you can end up resorting to credit cards or loans to help you out. That’s how you end up in serious debt, and it makes an already stressful situation much, much worse.

Work on building up a rainy-day fund that’s enough to cover 3-6 months (or more if you can!) worth of bills and living expenses should you not be able to work for any reason.

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They pay their bills on time

I cannot stress the importance of making sure you pay your bills on time. I know there are situations that occur that are sometimes out of our control but being financially savvy and creating good money habits is about avoiding debt and financial trouble.

There are legitimate reasons why you may not be able to pay your bills on time but there are also reasons that just boil down to not making the correct money decisions.

Your bills should come before anything else. That’s why I always recommend paying your bills as soon as you’ve been paid. That way all the important stuff is out of the way and you don’t have to worry about keeping your money back to pay off your bills.

Aligning all your bill payment dates is another really handy tip to ensure that your bills are all getting paid on time. Make sure all your bills have the same payment date or are very close together rather than being spread out across the month.


They know the difference between want and need

Another important habit to have is the ability to know the difference between a want and a need. Making a poor purchase on a want will give you temporary satisfaction, while buying something that you need will be enjoyed long after and won’t be a straining burden on your finances.

When you’re weighing a purchase, you need to take a look at whether it will add more value to your life, or if it will be a setback in your long-term goals.

That’s not to say that you should never buy something that brings pleasure, but you should always consider what value it adds to your life.

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Put side hustle money to one side

With our living expenses right down, we were living just under half of the money that we made from our main jobs.  This meant that the difference and any side hustle income was for saving/investing.

I made the decision that any side hustle money was to be put in a separate pot.  I’m not what motivated me to do this in the first place but it worked wonders.


Seeing my side hustle income grow independently made me realise how hard I have been working to achieve it.  It also inspired me to make more.

When the figure didn’t grow much over one month, it would give me a kick up the bottom to find more ways of producing income.

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They have a positive money mindset

A money mindset is the attitude you have towards your financial situation.

If you have a negative mindset and continuously think this is the best you can do and it won’t get any better, then that’s where you’re going to be stuck.

If you always focus on what’s wrong, it’ll be impossible to stay motivated. By changing to a positive money mindset, you’ll start making better choices about your finances.

People who are never broke know that money always comes back to them. Just keep thinking to yourself or saying there’s more where that came from.

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They surround themselves with like-minded people

Motivational speaker Jim Rohn once said, “You are the average of the five people you spend most of your time with”. We are greatly influenced by relationships and those who are closest to us. These relationships can impact our life in general and our financial life too.

We all have to make tough decisions at some point, especially if you are trying to get out and stay out of debt. That’s why it’s so important to surround yourself with positive and supportive people who will cheer you on as you make progress towards achieving your financial goals.


They value experience over things

One of the habits of debt free people is that they don’t focus on material things. They understand that stuff can never be a replacement for meaningful relationships with their family and friends.

People who are determined to get out of debt know that experiences make them happier than things, so they stay focused on reaching their goals.


They pay attention to detail

Debt-free people know that tracking their spending is the first step in getting control of their finances. This allows them to see if there are any money leaks in their spending so they can eliminate unnecessary expenses.

They also notice if an incorrect charge appears on their bill and are less likely to miss a payment due date.


They do their homework

One of the habits of debt free people is that they understand the importance of doing their research. They understand the basic concepts of personal finance so they can gain control of their money and make informed decisions. They don’t let others make important decisions for them.

They think long-term when making any big purchase and they are not afraid to be pro-active or negotiate to get a better deal. They actively seek out opportunities to save money and increase their income on an ongoing basis.


14 habits of debt free people – Final thought

If you want to become debt free (and stay debt free), then adopt these 14 habits of debt free people. The best part? You don’t have to wait until you are debt free to do these things.

Start following these 14 habits of debt free people and they will become YOUR habits as well!

What habits do you need to work on to help you become debt free?  And which ones are you already rocking?  Comment below because I’d love to know!

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What is the debt snowball method? Simple Guide!

Today I will be discussing what is the debt snowball method?

If you’ve ever been into personal finance you’ve probably heard of Dave Ramsey. If you haven’t, Dave Ramsey is a financial guru with his own radio show and the best-selling-book called The Total Money MakeoverI’ve been an on again, off again, listener of Dave Ramsey’s and I totally agree with his debt snowball method of paying off debt.

The greatest thing about the debt snowball method is that it’s so incredibly simple that anybody can understand it! It makes it super accessible to anybody.

Being in debt can really strangle you and make your entire life more complicated. If you’re able to get rid of all your debt, your entire life will change.

Dave Ramsey’s debt snowball method is a great way to start paying off debt because it’s based on psychology and small wins to get you started on the right foot. Let me teach you how to make the debt snowball method work for you!



What is the debt snowball method?

With the Debt Snowball Method, debts are paid off in order of lowest balance.

Order your debts from lowest balance to highest balance, disregarding minimum payment amounts and interest rates. Pay the minimum amount on all debts.

Pay as much as you can, in addition to the minimum payment, on the debt with the lowest balance. The extra money you plan to apply to debt each month is called your “debt snowball.”

Once it is paid off, apply that minimum payment + your debt snowball to your next lowest balance.

Your debt snowball will grow larger and larger as you continue adding the previous minimum payment to the next debt.


For this example, let’s say you have £100 extra to pay on debt every month:

Department Store Credit Card = £1,200; 23% interest rate; £55 minimum

Auto Loan = £7,000; 9% interest rate; £190 minimum

Student Loan = £20,000; 6% interest rate; £240 minimum

Travel Rewards Credit Card = £400; 18% interest rate; £30 minimum

Debt Snowball: £100

After ordering these debts from lowest balance to highest balance, you would focus on paying off the Travel Rewards Credit Card first, applying your £100 snowball each month.

Once that is paid off, you will move to the Department Store Credit Card. Your debt snowball at this time will be £130 (£100 initial snowball + £30 Travel Rewards Credit Card minimum payment).

Each month, you will pay £185 on the Department Store Credit Card (£130 snowball + £55 minimum payment).

Once that is paid you, you’ll target the Auto Loan (£185 snowball + £190 minimum payment). Lastly, you’ll tackle the Student Loan (£375 snowball + £240 minimum payment).

In this example, you would be paying £615 towards your Student Loan each month, an extra £375!

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Tips for the debt snowball method

  1. Create a Budget

Before you even develop a plan to pay off debt, you should create a budget which lists all of your income and expenses. You need to know where you are starting so that you have an idea of where you are trying to go.

  1. Trim the Fat

Really dig into your expenses and determine if there is anything you can get rid of. This will increase the amount you can apply toward debt payments, hence the income boost listed above.

  1. List All Debts

List all of your debts in order, beginning with the debt that has the lowest balance. Ignore the interest rates. The debt snowball method focuses on paying off the debt with the smallest balances, unlike the debt avalanche method which focuses on paying off the debts with the highest interest rates.

  1. Make the Payments

After you’ve listed all of your debts from smallest to largest, begin making the minimum payments on all balances except for the debt with the lowest balance. Any extra money, in addition to the minimum payment, should be paid towards the debt with the lowest balance.

  1. Earn Extra Income

If you’ve trimmed the fat from every expense that you could and your income is still not enough to kick start your debt payoff, then you might have to pick up a part-time job or start some sort of side hustle. If you need extra income to help get rid of your debt, check out my blog post for

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Interested in earning some extra cash? Check out my posts below on how to earn money online with a sidehustle fast!



Debt snowball method excel template

If you want to see quickly how long it will take you to pay off each debt, the best way to do that is using a pre-designed debt payoff spreadsheet. I used the Google Sheets Debt Payoff Template

They also have an Excel version of the Dave Ramsey Snowball Concept and you can choose between the Snowball method or the Avalanche method of debt payoff.


Why the debt snowball works

The debt snowball method leverages momentum over math.

The idea is to get a quick win by paying off a small debt first. This win will give you the motivation to continue aggressively attacking your debt.

It’s the same psychology that’s necessary for weight loss. If you can lose those first few pounds quickly, you’ll be motivated to continue your regimen and lose more weight.


This approach is what distinguishes it from the debt avalanche method.

The debt avalanche method is intended to save you the most money overall by attacking your debt from the highest interest rate to the smallest.

Though, both methods will get you to the ultimate goal of paying off debt.


Make sure your debts are organised

This has to be the first step before you even start to plan your debt snowball. You’re going to find it pretty tough to use the snowball method effectively if you don’t organize your debts. You need to know exactly how many debts you have and how much they total.

From there, you can work out your smallest debt and begin the snowball effect. This is one of the steps many people struggle with.

It can be daunting and let’s face it, depressing, writing down everything you owe, and actually seeing it there in front of you. However, by doing so, you’re actually taking control over your finances, rather than letting them control you.

Plus, you’ll soon start to feel much better when you put the snowball method into effect and you see those debts coming down.

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Why does this method work so fast?

As you pay off debts, the amount that you’re paying on them increases. There are no minimum payments allowed on the snowball debt method–and that is why it works!

Instead of languishing behind constant interest {which never stops} you’re steadily increasing your payments so you can finally get ahead and stay there!


My opinion on the debt snowball method

It really depends on your circumstances, but this is definitely a great debt strategy for someone who is feeling overwhelmed by debt.

If you have many debts with varying balances this method could help you to focus on one debt at a time.


I think the biggest benefit of The Snowball Method is that it can be very encouraging to see each small debt disappear.

Eliminating a debt feels incredible and it is likely to motivate you to continue paying off the rest of your debts.

You’ll probably pay a little more (or maybe a lot more depending on your circumstances) in interest in the long run. That’s something that needs to be weighed against the motivation benefit of this method.


What is the debt snowball method – Final thought?

When paying off debt, you must realize that it won’t be easy. No sacrifice is ever easy. If you want to change the trajectory of your life and that of future generations, stay focused and put it in the work.

The debt snowball method really works and it allows you to see your actual progress much quicker than if you had started paying on the highest debt first.

It also keeps you motivated and if followed correctly can have you living a debt-free life sooner than you think. I wholeheartedly encourage you to use this method because it will change your life. It certainly changed mine.

What are your thoughts on the debt snowball method?

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