We have already focused a bit on reducing your outgo, but there is another side to the “get out of debt” equation: increasing your income.
In fact, increasing your income will likely produce more dollars for debt reduction than reducing your spending. It is faster to see results, too.
Consider the following five ways to increase your income in the short-term:
1. Reduce your exemptions. If you currently receive a large income tax refund at the end of the year, consider reducing your withholding by lowering the number of exemptions you claim.
Contact your payroll office and complete a new W-4 form.
2. Ask for overtime. Not many people are keen on taking on more work, however if you are trying to get out of debt, it makes sense that you would try to increase your income.
It’s easier to ask your boss for more work than a raise, and with the current economy the way it is, your boss is more likely to let you work some OT rather than hiring another employee.
3. Cross train to make yourself more valuable. I once worked for a company that was in need of an expert in a field other than my own.
We were small, and the boss was reluctant to hire someone else. I told him I would learn the new area and cover it if he agreed to pay for training and remember these new responsibilities at raise time.
I added to my resume with a new skill and got a nice raise in the process.
4. Buy and sell on Ebay. Yes, this is still a viable way to make money, but it is a little more difficult these days.
For a while, I made money by buying one-day sale items at Amazon or Best Buy and turning around to sell them on Ebay. Remember to stick with smaller items so shipping fees don’t eat up your profits.
5. Start a blog. Well duh, what did you expect? A blog on a subject that interests you may be a way to create side income.
If blogging isn’t your thing, consider some other side hustle such as consulting in an area related to your current job (be mindful of non-compete or anti-moonlighting policy with your full-time employer).
With this extra income, be sure to throw every bit of it at your debts until they are gone.
Don’t allow lifestyle creep to eat away at your new earnings. Keep expenses low.
Stay the course. Be debt free!
Be sure to check out the rest of our series, How to Get Out of Credit Card Debt