Now that the New Year is upon us, many people are focusing their attention on their goals or resolutions for the year. One goal or resolution at the top of numerous lists? Get out of debt.
However, it’s not enough to declare that you want to get out of debt. In order to get out of debt, you have to take action. To that effect, there are two main ways to take action: cut expenses or increase income. There are arguments for and against both schools of thought. But I take a hybrid approach. I don’t believe it’s one or the other. I believe that to maximize your efforts, you can do both.
But for many people, that’s not possible. For instance, your expenses may already be as low as they can get and there’s nothing left to cut. Or you may be in a situation where you cannot work a second job. If you are in a situation where you can only do one or the other, here are a few things you can do to achieve your goal of getting out of debt:
Cutting expenses
- Examine your bills. Are there features, services or fees on your cell phone or cable bill that you don’t understand or you’re not using? Call the company and have them canceled. Snowflake that money towards debt.
- Change one habit. Let’s say you smoke and purchase lottery tickets every day. Or you buy apps and songs from iTunes daily. Give up one of those. You’ll be surprised at how much money you can save just by giving up one habit. That frees up money for debt.
- Scale back dining out. If you’re buying breakfast and lunch, switch to just one purchased meal. If you buy coffee 5 days a week, only buy coffee 4 days per week. Put that money towards debt.
- Look at what you actually use. Do you have a subscription to a magazine that renews every year but you never read the magazine? Do you have a membership to a gym you never go to? Do you pay for Netflix every month but you never watch a movie? Cancel those services and put the saved money towards debt.
- Other methods: use coupons, shop sales, carpool or use public transit (if possible), learn to DIY when possible
Increasing income
- Have a yard sale. Many people find this an effective way to earn money in one lump sum to put on their debt.
- Find a part-time job. The easiest way to increase income is to find another job. However, depending on where you live, finding a traditional part-time job may not be possible. I recommend that you create your own. For instance, are you good with photography? Are you crafty? Can you tutor neighborhood kids? If you have any skill at all, you can turn it into a part-time job. Even if it’s an extra $50 a week, that $250 a month towards debt.
- Use the Internet. If you have Internet access, you can find all kinds of ways to make money that do not involve adult…activities. For instance, I’ve been teaching online for over 3 years. I also blog. Maybe those are not for you. Using an example above, let’s say you’re crafty. You can try to sell your products on Etsy or use the internet to promote your home based business (I know someone who did this and she wound up getting featured in her local newspaper). Offer to run someone’s social media. There are numerous ways you can use the Internet to help increase your income.
- Switch shifts at work. If you are in a position where you can make more money by working a less desirable 2nd or 3rd shift at work, it’s possible logistically, and there’s a shift differential, talk to your supervisor about picking up one or two of those shifts. Use that extra money towards your debt.
I realize that none of these are creative, new or unusual tactics for finding money to pay down debt. I look at this list as the Abs of Steel for debt repayment. The advice may be old and wearing funny clothes but it’s effective and it works. Why not give it a try?
Do you have any unique or unusual methods for finding money to pay off debt?
