It took me just over a year to completely wipe out my debts.
That felt like an eternity to me.
No matter how much debt you have or if you’re finally debt free like I am, you’ll discover that getting out of debt is tough.
There’s no easy way out or shortcut to take, and you’ll want to quit more times than you can count.
However, there is one strategy you can use to make it easier or faster – making more money.
As a financial expert, you’re probably expecting me to tell you to cut your lifestyle back, live on rice and beans, and be a hermit until your debts are paid.
But I won’t tell you to do that. Granted, I did many of those things. If you’re completely committed to the process, you can be a little radical too.
To be debt free there are only two real strategies that work: cut back on spending or earn more money.
There’s only so much you can cut back on spending until you can’t cut back anymore. Too many people focus on scrimping and saving money and lose sight of how much more progress they could make just by bringing in a little extra money.
Why Making More Money is Crucial
1. You’ll be debt free faster.
During the year it took me to pay off my debt, I saw firsthand how increasing my income was directly related to how fast I’d get out of debt and start building wealth. This is why making more money is crucial to getting out of debt. Not just cutting your lifestyle.
I started my freelance writing business and dedicated all the income I made strictly towards paying off debt. If I took on more projects and made extra money, I’d make progress that much faster. But if I slacked off and didn’t bring in much cash flow that month, I’d be in debt longer. It’s completely up to you how quickly or slowly you want to pay off your debt.
2. You’ll have a higher chance of success.
The truth is, the longer you work towards a goal, the higher your chance of quitting becomes. You’ll get tired, worn out and start finding excuses to give up. But if you can give you debt payment plan a boost by bringing in more money, your chance of success will greatly increase.
3. You can find a creative outlet.
When you’re keeping a close eye on your budget and throwing every extra cent towards debt, your social life becomes almost non-existent. So you’ve got to turn your new part-time job or side hustle into your social, creative outlet.
One of the things I did was to implement my deal hunting skills at yard sales and thrift stores, then I flip them on eBay or Craigslist for a small profit. This is a great way to meet new people and make connections, while making a little extra money. It makes getting out of debt a little more fun and a little less boring.
4. You’ll make new friends.
I’ve struggled with debt since I was 20 years old and I’ve tried multiple times to finally be debt free. The only thing that made it stick this time was because I made new friends and found a group of people just like me who were supportive.
When you go out to find a new side job or freelance gig, you’ll come across lots of other people who are doing the same thing. Instead of traveling this debt free journey alone, you’ll be making new friends, sharing stories and encouraging each other along the way. That kind of accountability is extremely important to your success.
Last year the New York Times featured an interesting article showcasing people juggling multiple jobs.
3 Fun Ways of Making More Money to Pay Off Debt
1. Your knowledge and skills.
You don’t have to go back to school or have an expensive degree to make some money on the side. You probably already possess the skills and knowledge!
- Do you enjoy teaching and mentoring? Make money on the side as a substitute teacher or do some private tutoring
- Are you creative and enjoy doing crafts and DIY projects? Make money hosting a scrap-booking class, a jewelry party or doing small DIY repairs
- Are you passionate about fashion and clothes? Make extra money as a fashion consultant or flip thrift store finds for a profit
There’s an endless amount of ways to increase your income by leveraging what you already know how to do.
2. The assets you own.
Each of us owns some sort of asset that we can use to make money on the side. Here’s what I mean – your home, your car and your yard, are all assets you can leverage.
If you have an extra room in your house, there’s an abundance of overnight travelers always looking for a comfortable bed and place to stay. On top of renting a space in your home, you could try renting your car for extra cash too. Some people even earn up to $600 per month doing this!
If you have a small garden with home-grown produce, consider selling at a local farmer’s markets or directly to friends, family, and neighbors. This is a great way to make your yard work for you.
3. Small tasks and errands.
If you don’t have a lot of time available for some of these other ideas, try doing some of these smaller tasks and errands to increase your monthly income. Remember, every little bit adds up, so you don’t always have to go after the biggest most time-consuming projects.
With sites like Fiverr, Taskrabbit, and Upwork.com you can start making money immediately. From running quick errands like picking up groceries, driving someone to the airport or doing a few writing gigs, there are all kinds of ways to make an easy $5 or $10 bucks.
The process of getting out of debt is often slow and tiresome. But by making more money every month, you’ll be able to have fun, make new friends and become debt free faster than you originally planned.
Are you in the process of getting out of debt? Are you making more money to boost your efforts? Are you consciously choosing not to?
Carrie Smith is the writer behind Careful Cents, where she helps people get out of debt and find a career they love.