There are two sides to the debt elimination coin—reducing expenses and increasing income. I think both sides work hand in hand. I also think it’s wise to start with reducing expenses. Why? Because it forces you to re-think your real needs. Increasing income without stabilizing spending will only promote bad habits further. And reducing spending is something you can do right now.
Once you see that, yes indeed, eating at home most nights won’t kill you, it’s time to start working on the income side of the balance sheet.
I do understand how a boost in income can (and should) be part of any debt elimination plan. In fact, an increased income was the key to helping Frugal Dad get out of debt:
“The only thing that was going to get me out of debt was boosting my income.”
He states, and I highly agree, that you need to fight large amounts of debt with large amounts of money. Throwing $15 at $70,000 in debt every month is bad for the psyche in the long run. So, how do you add more work if you’re already maxed for time?
“At great risk of sounding like a back-of-the-magazine ad, I highly recommend considering a low-cost opportunity you can do from home. Maybe something related to your full-time gig that doesn’t conflict with your full-time gig.”
He continues by offering up a few more additional work tips…
If you are a teacher, consider tutoring at night and on the weekends. If you are a programmer, consider doing some freelance work. If you like doing yard work, offer to mow lawns for friends and neighbors.
If you read the full article, Frugal Dad also mentions…starting a blog to write about your money making adventures. I have to give it to him, most bloggers, ironically, poo poo the idea of blogging for income (thanks for the encouragement, Jason).
While “debt snowballs”, lower interest rates, credit card transfers, and the other reduction type activities are important, the only true way to knock out large debts is to enlarge your income.