You keep making the minimum payments on student loans, credit cards, an auto loan â€” but your payoff dates are still years away. In the meantime, youâ€™re spending hundreds on interest each month.
The good news is, you donâ€™t have to if you get serious about getting out of debt. If you pay more than the monthly minimums, youâ€™ll get out of debt faster. Even better, youâ€™ll avoid paying interest and free up cash flow with each balance you eliminate.
But not everyone has extra money around that they can use to pay even more toward debt than they already do. If youâ€™re trying to pay off debt with a low income or tight budget, earning more might be the answer.
Hereâ€™s a look at 10 ways to pay off debt faster by increasing your income.
Generating extra funds and putting it toward balances is one of the most effective strategies to pay off debt. Thatâ€™s because it allows you to get out of debt faster and pay less interest â€” without eating into your monthly budget.
Get started with these 10 ideas to make extra money and get out of debt faster.
One of the simplest ways to get more money is to work more. If you have an hourly job, let your supervisor and co-workers know that youâ€™re available to cover extra shifts. You can also volunteer to work overtime if thereâ€™s a need, such as if your team is currently understaffed or is particularly busy.
These extra hours can be a big help, and youâ€™ll see the results fast â€” as soon as your next paycheck.
It might be worth reviewing your pay stubs anyway, to see if you can increase your take-home pay with doing any extra work.
If you usually receive a big tax refund, for example, that could be a sign that you might be able to withhold fewer taxes and boost your take-home each pay period.
You can also revisit your pay benefits, and consider scaling back contributions to a retirement savings account or other benefits to pay off debt instead.
If youâ€™re a salaried employee or canâ€™t get extra hours at your day job, consider getting a second job to generate some additional income. Jobs based on tips, such as waiting, bartending or delivering food, can be particularly lucrative. Many retailers also hire seasonal workers to help out during their busiest times of the year.
Check around to see whoâ€™s hiring in your area and find opportunities to pick up some extra work â€” and earn some extra money.
Skilled workers and professionals can often make even more in their off hours if they find a way to leverage their know-how to demand higher pay. If you earn more for every hour you work, that will generate even more money you can use to pay off debt.
As a freelancer or contractor, you can offer your services in anything from marketing and web development to performing home repairs or remodels. Figure out what you can do that would make you a valuable freelancer or contractor and line up clients (sites such as Upwork or Toptal can help). You can then can use your off-hours to make some serious extra cash.
On top of trading your time to make money, consider the stuff you currently possess to generate some additional income. Looking for items to sell, such as clothing, electronics, appliance, furniture or other valuable items that you donâ€™t need or use anymore.
You might also consider renting out your items or space:
Borrowers with a creative streak might consider making things to sell. Think about things you like to make, and whether you could make a version of that that people would want to buy.
If you can paint or draw, for example, you could consider making commissioned family portraits. As a photographer, you can offer to do photo shoots or upload and sell your photos on stock sites, such as Foap. You can sell your own baked goods, handmade jewelry, hand-cut wooden cutting boards, or personalized leather wallets or billfolds.
Whatever you know how to make, start creating and offer your goods to people you know or consider listing them on sites like Etsy. Then you can turn around and use the proceeds to pay off debt.
Another way to leverage your unique know-how to make money is to teach others through a course, class or one-on-one lesson. With just a few hours of teaching per week, you can generate a few hundred dollars per month to make extra debt payments.
If you can play a musical instrument or sing, for instance, you could teach private lessons. Exercise buffs could find work leading a fitness class or working as a personal trainer.
You can even share your skill set online. You might consider teaching English as a second language through QKids, or tutoring on a range of subjects through Brainfuse or Tutor.com. Or, you could create an online or video course and sell it on sites like Teachable or Udemy.
Todayâ€™s gig and sharing economies rely on mobile apps to make it easier for enterprising smartphone owners to make money. You can make money with mobile apps such as TaskRabbit, which allows people to hire and pay you to complete small jobs or errands. GreenPal is an app to find jobs performing yard work and lawn care.
You can sign up as a driver and get paid for delivery food or groceries with DoorDash, Shipt or Instacart. And of course, there are ride-sharing apps, such as Lyft and Uber, that remain staples of side hustlers everywhere.
You can also provide care services to make some extra money to help pay off your debt. Sites like Sittercity, Care.com or UrbanSitter enable you to offer your services as a babysitter or child care provider. If youâ€™re more of an animal lover, these sites also connect sitters with pet owners, or you can use an app such as Rover. You can also look for house sitting gigs on HouseSitter.com.
Have the entrepreneurial bug? Starting a business as a side hustle is a smart way to ease into a company with fewer costs and risks.
Many of the ideas already listed could be a jumping-off point for starting a business. But donâ€™t limit yourself. Think of several business ideas and test them on a small scale to see if theyâ€™re profitable. Youâ€™ll quickly see proof of concept and can narrow your business ideas down to one thatâ€™s profitable and viable.
You can work your regular job during the day, and build our own business during your off-hours. Youâ€™ll get a firsthand taste of what itâ€™s like to be your own boss working on your own projects, all while making some extra money and getting out of debt.
As you start experimenting with different ways to increase your income, youâ€™ll have more firepower and funds to throw at your debt. By ignoring distractions and focusing, you can knock out your debts months or even years ahead of schedule. In the process, you could save big by lowering interest costs and avoiding them altogether.
How you use your extra money to pay off debt will matter, however. Here are some tips you can follow to maximize your new income.
Earmark extra money for debt. Make a commitment to yourself that all â€śextraâ€ť income you make from a second job or side hustle will be put toward paying off your debt â€” and follow through.
Keep spending under control. If you start earning more only to increase your spending, this will wipe out your extra efforts and keep you in debt. In addition to looking for ways to earn more, revisit your budget and look where you could cut back and change habits to spend less. This could help you free up even more funds that you can use to pay off debt even faster.
Make regular extra payments on your debt. In addition to making your monthly minimum payments, use your extra income to pay more on your debt. You can send extra payments in yourself, or make it even easier by setting up automatic payments through your bank.
Target high-interest debt first. Extra payments will go even further if they are targeted â€” meaning you pay the minimum on all debts but only pay extra toward a single balance at a time. If you want to get out of debt the fastest and save the most interest, look for debt with the highest interest rates. Paying expensive debts down first will save on interest, and keep your debt payments going toward the principal (what you owe) instead of interest.
Look into refinancing or consolidating debts. Another way to fight high-interest costs while simplifying debt is debt consolidation. If you have several credit cards with balances youâ€™re trying to pay down, for example, you could use a debt consolidation loan to combine those into one debt. Even better, you can consolidate credit card debt with a personal loan, which will typically carry lower rates and could help you get out of debt faster.
To explore personal loan options for consolidation, consider using LendingTreeâ€™s personal loan tool. It can help you find lenders after you input basic personal information. Note that MagnifyMoney is owned by LendingTree.
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Take a look at other accounts, too, to see if you could save by refinancing student loans, auto loans or a mortgage.
As you work toward paying off debt, track your progress and celebrate your wins. This will keep you accountable and motivated.
It might take months or even years of hard work and side hustling to pay off debt. But if you follow smart strategies, earn extra income and stay focused, youâ€™ll see results. In the meantime, you might also build additional income streams that you can continue to use to build lasting financial security and wealth, even after your debt is gone.
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