Are you struggling with a mountain of debt while earning a low salary? Trust me; I’ve been there and know how overwhelming it can feel. But don’t worry, because I’m here to share my journey of triumph and show you how to get out of £40,000 debt with a low salary. In this blog, we’ll dive into my personal experiences and the strategies I used to tackle my £40,000 debt. So, let’s get started on this inspiring and practical journey towards financial freedom!

“Debt can suffocate your dreams, trapping you in a cycle of financial stress and limited opportunities.”

– Source: Investopedia,

How Did I End Up in £40,000 Debt?

As I watched my children excitedly unwrap their Christmas presents, I couldn’t help but worry about how I would pay for the gifts later. Being a mum to the best children ever, I always wanted to provide the best for my children, but my finances were spiralling out of control. From studying to become an accountant to supporting my children and helping extended family members, I relied on credit cards to make ends meet.

My Plan to Tackle the Debt

I initially believed that finishing my studies would lead to a high-paying job that would quickly eliminate my debt. However, reality hit hard when I struggled to secure employment for a long time and ended up with a low-wage job that barely covered my bills. I was trapped, making only minimum credit card payments and facing mounting interest rates and fees.

The Turning Point

My lowest moment came when I couldn’t afford to buy food for my children, and I broke down in tears. But in that moment of despair, I found the strength to change my situation. I never wanted to experience the fear of being unable to feed my girls again. That pain fuelled my determination to take control of my debt.

“Small, consistent actions today can lead to significant financial achievements tomorrow. Cultivate good financial habits and watch your wealth grow.”

– Source: Investopedia,

Okay, let’s do it

With a whopping £40,000 debt hanging over my head, I felt lost and overwhelmed. But I refused to let it consume me. Here’s how I started my journey towards financial freedom, one step at a time.

Reduced Spending

Living frugally became my new way of life. I cut back on unnecessary expenses and found creative ways to save money. Every little saving made a difference, from giving up my car and using public transportation to downgrading my phone contract, packing lunches instead of buying them, and choosing cheaper grocery and toiletry brands.

Increasing Income

Since getting a second job wasn’t an option for me due to limited time with my children, I focused on increasing my income at my current job. By helping my company significantly reduce costs through a smart office move, I saved them money and earned a £400 monthly pay rise. This extra income provided a much-needed boost in tackling my debt.

Rented Out My Room

To maximize my earnings, I decided to rent out my bedroom and slept on the floor of my living room temporarily. The monthly rent helped me generate additional income to pay off my debt.

Choosing the Right Debt Repayment Strategy

Coming up with a debt destruction plan was crucial. After exploring various methods, I came across Dave Ramsey’s “Money Make Over” and learned about the “Snowball” method. This approach involved directing all extra money towards one debt at a time, starting with the smallest balance and gradually moving to larger debts.

The Snowball and Avalanche

Using the Snowball method, I paid over and above the monthly minimum payments, focusing on one debt at a time. The sense of accomplishment from paying off my smallest balance was incredible, motivating me to continue. I also incorporated the Avalanche method over time, prioritising debts with the highest interest rates.

Tools to Track Progress

I relied on a simple yet effective spreadsheet, which I’ve linked here. This free Excel or Google Sheets tool allowed me to track my progress and stay organized throughout my debt repayment journey. It is a free tool.

Find out the 5 Simple Things You Can Do Today To Get Out Of Debt

Staying Focused and Looking Ahead

Although setbacks and delays were inevitable, I remained focused on my debt-free goal. I envisioned a future where I could save for myself and support my loved ones. The desire to spend quality time with my children and go on vacations pushed me forward.

The Current Scenario

I’m ecstatic to share that I am now completely debt-free! It took me three years to pay off the entire £40,000 debt. Currently, I’m on a journey towards financial freedom, constantly learning and investing in passive income opportunities that will hopefully become my full-time income.

Final Thoughts

Reflecting on my journey, I realize it was never about quick fixes or shortcuts to wealth. It was about consistent effort, patience, and resilience. I never want to find myself in that position again, and I’m passionate about helping and encouraging other women facing similar challenges.

Remember, when money is tight, things can get better. You can regain control of your finances and even start new ventures that bring in additional income. I’m right here with you; if I can do it, so can you!

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Let’s embark on this transformative journey towards financial empowerment together!”

All the best!

Joyce