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Follow this strategy to get out of debt on a low income

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Man sitting at a restaurant table with his hand over his mouth wondering how to get out of debt on a low income

Did you know that data from the NCR revealed that in 2019, 70% of people weighed down by debt in South Africa had an income of less than R7,500 a month?

Nearly 3 out of 4 people struggling with debt have a low income. Let’s change that.

Here’s a strategy to get out of debt, even if you’re broke.

Side note: this will work for anyone. So listen up, higher-earners, you can try it too.


How to get out of debt on a low income

Getting out of debt is hard enough. Pile on not earning a lot of money (or worse, getting retrenched), and it starts to seem impossible. 

It’s not impossible, though. It just takes more dedication or a smarter approach.

There are two ways to get out of debt:

  1. By following a strategy on your own, or
  2. By leveraging a service that does it for you (debt counselling [debt review])


Pro tip: for the best outcome. Try a hybrid approach.


Graphic showing three ways to get out of debt


We’ll start with how you can do it on your own, and then we’ll explore using or adding a service to your strategy. Both are similar, except one involves taking matters into your own hands, and the other gets someone else to do most of the heavy lifting.

Let’s get into it.


How to get out of debt when you’re broke

Are you ready?

Here’s how to do it in a single paragraph:

To reduce debt and get back on track financially, it’s important to take a detailed look at your current situation. Determine exactly how much money you owe, create a budget and start to limit spending. Then pay off the smallest debts first (skip other payments, just put more towards smaller debts to get them out of the way).

It’s also worth seeking additional income and negotiating with creditors to get better rates.


Graphic with a list of eight steps to get out of debt


This is what the strategy looks like in steps:

  1. Stop taking on new debt
  2. Determine how much you owe
  3. Create a budget
  4. Limit your spending
  5. Pay off the smallest debts first
  6. Then, start tackling larger debts
  7. Find ways to earn extra money (to put towards debts)
  8. Negotiate with your creditors for better rates


There are other things you can do that could speed up the process and help you to get out of debt faster. These involve getting creative and thinking outside the box.

Got your thinking cap on? Good. The next section requires audience participation (that’s you).


Other things you can do to get out of debt on a low income

Check out this list of creative solutions and take a second to think about each point (how can you apply it to your life?), then write down the ideas that you come up with.

Bonus: we wrote a whole post on this topic. Check it out for a more comprehensive list — creative ways to reduce debt (extra fast)

Each point is either a way to reduce expenses or increase earnings so that you can put the difference towards your debt.

  • Increase your income — what can you do to earn some extra money?
  • Sell unused items — is there anything that you can sell? If you have nothing, sell other people’s stuff for them and take a cut.
  • Barter for services — how can you use your skills to pay for things that you need?
  • Cut unnecessary expenses — what can you start cutting?
  • Find free or low-cost entertainment — how can you keep yourself busy and have fun for free?
  • Reduce travelling expenses — how can you reduce your transportation costs?
  • Buy generic or store brands — store-brands cost less, because retailers don’t spend on advertising. They rely on store traffic to sell these products. In most cases, the quality of these products are reliable.
  • Refinance debt — consider refinancing your debt to a lower interest rate, which can reduce the amount you pay over time (remember to keep refinancing costs in mind).


Earlier, we mentioned a second strategy (or a booster strategy, depending on your approach). One that involves using a service. That is what we’ll take a look at next.


How to use services and legal processes to get out of debt

Why not leave it to the pros? South Africans have a lot of options to choose from, and letting someone else do the hard work improves the likelihood of success.

Keep in mind that some of the suggestions below are options, not services.

Here are a couple of services and debt relief options that could consider:

  • Debt counselling (debt review) — a process introduced by the government to help over-indebted individuals catch up with outstanding debts.
  • Debt consolidation loans — Taking out a new loan (preferably with better terms) to repay other debts. This option fights debt with debt. Risky.



  • Debt settlement — negotiating with creditors to settle the debt for less.
  • Sequestration — a legal process that sells off assets to repay debt.


Debt counselling (debt review) is the most effective because the process inherently aims to help people get out of debt by making their debt more affordable and keeping it that way. When we talk about using a service to get out of debt… we’re talking about debt counselling.

On the other hand, a debt consolidation loan doesn’t ensure that what the individual owes will remain affordable (because new loans and new debt remain options).

We’ll go over both of the first two options but won’t be exploring debt settlement or sequestration.

Eager to get the best results? Stack a service onto the strategy that we outlined in the beginning.


A graphic that shows how stacking the steos to get out of debt makes an impact on cost vs income


First up is debt counselling (debt review).


Using debt counselling (debt review) to get out of debt

What is debt counselling (debt review)? Here’s a quote from our blog post dedicated to this question:

“Debt counselling is a practice that helps individuals that are struggling to repay their debt through a regulated process that offers various benefits that can help alleviate the pressures of over-indebtedness.”

Introduced by the government, debt counselling provides several advantages that make it easier to get out of debt on a low income:

  • Lowers monthly debt costs
  • Combines various debt to make it easier to pay and track
  • Provides legal protection (including against repossession)
  • A structured plan to go from over-indebted to debt-free


Here’s the full list of the advantages and disadvantages of debt review.

Applying is easy. All it involves is finding a registered debt counsellor online and reaching out. They explain everything, including how debt review affects applying for new loans, and guide consumers through the process.


Struggling to keep up with your debt?

Our team can help make your debt affordable once again.

We help thousands of South Africans to reduce their monthly debt repayments, protect them from legal action, and keep their assets — our team can help you too.


Using debt consolidation loans to refinance debt

Although getting a debt consolidation loan is more of an option than a service, we’re listing it here because it has similar properties to debt counselling. 

Debt consolidation loans allow people to combine multiple debts into a single payment by taking out a new loan. Consolidating the debt with a new loan makes it more manageable and easier to repay (a lot like debt counselling).

Here’s the difference.

Debt consolidation loans don’t have the legal protection and support that debt counselling offers. This has its advantages and its disadvantages.

The biggest advantage: it allows consumers to continue to loan money.

The biggest disadvantage: it allows consumers to continue to loan money.

(See what we did there).

The option to continue loaning money or taking out new credit is risky. Half the time, this only makes things worse.

But it is an option nonetheless.


Final thoughts

There you have it. How to get out of debt on a low income. Choose what works for you, whether it is doing it yourself, using a service, or doing both.

My Debt Hero offers debt counselling services and can help anyone that wants to benefit from the advantages we listed earlier.

To see if you qualify, click this link.

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