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#IWD2019: How to Reduce Debt When Your Income Is Low

Is your goal to reduce debt this year, but you feel like your income is preventing you from making it happen? Did you know that half of all Canadians feel like they don’t earn enough money to live debt-free?

While it’s true that it can be tougher to pay off debt on a lower income, it’s definitely not impossible. And this month, in light of International Women’s Day, we wanted to talk about some of the unique financial challenges women face, while empowering them to take control of their financial futures.

Why do women sometimes find it harder to reduce their debt?

Late last year, we polled Canadians to see which factors were causing the most financial stress in their lives. Here are a few of those findings:

  • Three-in-four Canadians carry personal debt. However, 52 per cent of women, vs. 45 per cent of men are likely to carry heavier debt loads.
  • More than 40 per cent of Canadian women find it hard to afford transportation costs.
  • One-in-three millennials and Gen Xers find it difficult to feed their families.
  • More than half of women aren’t financially prepared to start a family, own a home or save for retirement.


The biggest take-way from this poll? Personal debt is a major factor when it comes to affordability — a fact even more true for Canadian women.

4 ways to reduce debt when money is tight

It’s hard enough to reduce debt when you’ve got a good income stream. So, when your budget is tight, you’ll have to get a little creative. The good news is that finding ways to reduce debt and stretch your money can really improve your financial confidence. Try this:

  1. Take stock of your debt. Before you start your journey, you need to rip that Band-Aid off. Add up all your debts using our debt calculator, and while you’re at it, add up your monthly income.
  2. Develop a budget. On a low income, every dollar counts. That’s why it’s important to track your money using either a budget worksheet or a budgeting app. Your budget will help you plan ahead for upcoming expenses, and trim areas where you may not realize you’re overspending.
  3. Don’t add to your debt. When money is tight, it’s easy to use credit card debt like an extension of your income. Now that your budget is in place and all your money is accounted for, a big part of reducing debt is to stop relying on personal debt completely. Put your cards on ice (literally!), cut them up, put them in the back of your drawer, or use whatever means necessary to keep from adding to those balances.
  4. Find a debt management strategy that works for you. If you’ve only been paying the minimums on your credit card balances, you know that it’s a losing battle. To make progress, you need to increase payments to reduce debt. Take a look at the debt snowball approach, which involves attacking your smallest debt while keeping up with minimum payments on your other debts. Once that small balance is paid, you move on to the next. The more progress you make, the more money you free up to pay off those larger balances. Alternatively, you can explore more debt relief options by using our online repayment options calculator, or speak to a debt professional such as a Licensed Insolvency Trustee (LIT) who will go over your individual needs.


Your journey toward debt relief will be tough at times, but it also be rewarding. Remember to celebrate your successes and don’t let your missteps derail your efforts. Surrounding yourself with supportive people who will cheer you on can really help with the process.

Another way to stay motivated to reduce your debt is to follow personal finance bloggers who inspire you to do better daily, such as The Classy Simple Life.

Are you ready to embark on your journey to reduce debt? Follow us on Twitter for daily #DebtAdvice and money tips #LeaveDebtBehind #BalanceforBetter

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