How to Get Out of Debt on a Low Income (Step by Step)

Debt has a way of making everything else in life feel heavier. Whether it’s a mobile money loan that’s been rolled over three times, school fees borrowed from a relative, or a personal loan from a bank — owing money creates a constant background anxiety that affects how you work, sleep, and live.

Getting out of debt is possible. But it requires a system, not just willpower.

Step 1: Write Down Every Debt

The first step, which many people avoid because it’s uncomfortable, is to face the full picture. Write down every debt you have:

• Who you owe
• How much you owe
• The interest rate (if applicable)
• The minimum payment required
• The due date

Seeing it all in one place can be shocking. But you cannot solve a problem you’re not looking at clearly.

Step 2: Stop Adding New Debt Immediately

Before you can reduce what you owe, you need to stop it from growing. This means:

• No new mobile money loans unless it’s a genuine emergency
• No borrowing from one person to pay another
• No “buy now pay later” purchases

Every new debt undoes the progress you make paying off old ones.

Step 3: Find Extra Money in Your Budget

Review your current spending using CashMate. Look for any category where you can temporarily reduce spending to free up money for debt repayment. Even 10,000–20,000 UGX or 500–1,000 KES per month redirected to debt makes a meaningful difference.

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Step 4: Choose Your Repayment Strategy

The Avalanche Method: Pay minimum payments on all debts, then put every extra shilling toward the highest-interest debt first. Mathematically optimal — saves the most money.

The Snowball Method: Pay minimum payments on all debts, then put every extra shilling toward the smallest debt first. Psychologically powerful — early wins build momentum.

If you’re disciplined and motivated by numbers, use Avalanche. If you need early wins to stay motivated, use Snowball. Both work.

Step 5: Communicate With Creditors

If you owe money to a person rather than an institution, talk to them. Most people would rather receive steady small repayments than nothing at all. Negotiate a realistic payment schedule and stick to it. Reliability matters more than the amount.

If you owe a formal institution (bank, Sacco, mobile money), contact them about restructuring if you’re struggling. Many have hardship programs. Avoidance makes things worse; communication opens options.

Step 6: Celebrate Progress, Not Just Completion

Getting out of debt takes time. Months, sometimes years. Celebrate intermediate milestones — paying off the first debt, reaching the halfway point, making three months of consistent payments. These celebrations don’t have to cost money; they can just be acknowledgement that you’re doing something hard and doing it well.

After Debt: Building the Opposite

Once debt is cleared, redirect the repayment amounts immediately into savings and emergency fund building. You were already living without that money. Now it works for you instead of against you.

Debt freedom is achievable. Go after it systematically.