How Can You Pay Off Your Debts With An Irregular Income?

irregular income

You don’t have a steady income and a regular job. You earn through different independent projects or freelancing every month. You manage to live throughout the month while saving something if you earn good amount of money sometimes. But there is a catch, you have debts on your shoulder. You constantly worry about managing your finances to pay off your debts amount.

We understand that due to COVID-19, many people are struggling to keep up with their financial situations. If you are the sole earner in your family then we can understand how much pressure you have on your shoulders. But what if we tell you that you can easily manage to pay off your debts with your irregular income? Sounds good, right?

Do you understand your money?

Take a piece of paper. Write down your total household income on it. Start by writing every expenditure where your money is going. This way it is easy to see if you are spending your money on anything extra. Sometimes we cannot see it clearly but small expenses play a huge role in major spending.

Don’t skip anything. Mention every little pound you have spent on takeaways, grocery shopping, coffee, etc. Do this every month to calculate how much money is being spent by your family.

Don’t skip minimum payments

Sometimes, it becomes normal for someone to skip making a minimum payment because they don’t have enough money to afford it. This way you will face a penalty from your lender which will harm your finances in the longer run. Set a reminder on your mobile phone to pay off the minimum balance before the due date to avoid any problem. Monthly instalments are surely a headache but they are set based on your paying capacity. Many direct lenders offer very bad credit loans with no guarantor.

Time to set a monthly budget

After a few months, you know how much you spend you different things. With your total income, your monthly instalments, and expenditure on bills, groceries, medicines, and other miscellaneous items, you can determine where your money is going.

Set a limit for every type of expenditure. Say, you would only want to spend 500 pounds on monthly grocery and 100 pounds on shopping. This way you will draw a line and avoid being into any unavoidable situation.

Time to save emergency funds

Life stops for no one and so is the case for any kind of emergency. An emergency can be related to sudden illness or accident or hospitalisation or vehicle issues or something broke at your home. Imagine you don’t have any kind of savings with you for tackling such a situation. You are already under debt and can’t afford to add more to it.

The best way to save yourself from getting into trouble next time you face any kind of emergency is to save some amount of money every month. It is recommended to save 500 to 1000 pounds each month.

You should keep your emergency funds in a separate savings account. But it should be easy to withdraw whenever you need it. It is recommended to keep one month’s worth of income saved in a separate account.

See different ways to increase your income

If possible you can look for ways to increase your income. You can do freelancing jobs while sitting at home in your spare time. This way you don’t need to jeopardise your regular work. It can be done during weekends or at night when you become free. You can even choose a few quarters in a year where you can choose to pick a part-time project to earn extra money. If you are comfortable, you can even choose to work as a delivery man to deliver pizzas or other food items during your free time. Festive time means stores need more staff. You can even choose to do that if you are comfortable.

Avoid credit cards

Credit cards can be fascinating when you need something immediately and don’t have any funds with you. This can push you into trouble as it will increase your debt and ultimately pressure. Credit cards are often attractive when you want to shop during a sale online or book tickets. Keep credit cards for emergency dental specialists purposes and avoid using them just to pass your time.

This year has been difficult for everyone as many businesses had shut down and many people had lost their job because of the job crisis. People are looking for the best possible ways to increase their income to pay their debts and live a reasonable life. The first step is to manage your debts the right way. Then start by smartly managing the funds you earn each month.

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