How to Get Help with Debt While on a Low IncomeMar 17, 2019
When you’re first starting out and struggling to get your foot in the door, that entry-level job probably won’t offer you the income you were hoping for. And, tackling your debt on a low income can be challenging to say the least. This is true for Canadian millennials in general, but, unfortunately, debt can cause even more difficulties for millennial women down the line. Here’s why it’s important for young women to get help with their debt sooner rather than later.
According to our Affordability Index, released last fall, women are more likely than men to have heavier debt (52 per cent). It’s a prairie issue too. Those in Saskatchewan are two percentage points more likely to fit into the larger debt load category than those in Ontario (53 versus 51 percent).
Heavier debt can make it difficult for women to move forward in life. We found that about six-in-10 women feel unprepared for significant financial events such as having children, purchasing a home or retirement.
The less debt women carry into their 20s, 30s and 40s, the more financially able they’ll be to weather rising costs of living and time away from work for maternity leave or to care for an older family member. Less debt also means women may have a greater ability to save for a secure retirement.
So, what can millennial women on a low income do to get help with debt? In the spirit of International Women’s Day earlier this month, let’s take a look at a few self-help strategies young women can use to start paying off debt faster.
Create solid, achievable goals for your money
When you’re new to an entry-level job, adjusting your lifestyle to your income is important. That’s why it’s great to set SMART financial goals sooner rather than later. Learn more about creating SMART goals — which stand for specific, measurable, achievable, realistic, and time-framed — in this post from our St. John’s website. Then, try out our goals worksheet!
Utilize an app for budgeting
Nine-in-10 millennials own a smartphone, according to Pew Research numbers. This makes it almost ubiquitous, regardless of income levels. Get your smartphone working for your financial goals by trying a new budgeting app. Mint is the big one — an app that securely takes in your banking and credit card information and breaks down your budget, tracking spending and more.
There are also apps that invest on your behalf. Mylo takes all your purchases and rounds them up to the nearest dollar, investing the money in a savings account. This is a good way to boost your savings. It’s also a great strategy that will help you put money aside for debt repayment.
Try a money-saving challenge that “doesn’t suck”
Every little bit helps. This blog post from And Then We Saved gives women all sorts of smart, doable tasks they can do to save money. Trying a new one — such as reducing food waste, wearing clothes without repeat and decluttering social media to avoid retail temptation — can motivate you toward your next financial goal.
Explore debt consolidation
If you have a good credit score and can offer security for the loan, think about exploring a debt consolidation loan. A debt consolidation loan allows you to combine multiple debts into one monthly payment, often with a lower interest rate. Talk to a trusted lender. If you’re carrying credit card debt or student loan debt, this could be a workable solution to get help with your debt.
Join the conversation on social media to share your tips on paying off debt while on a low income. Use the hashtags #LeaveDebtBehind, #WomenAndMoney, or #Budgeting.