The Underrated Tool For Paying Down Debt: Increasing Your Income
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When it comes to paying down debt, many people simply choose one of the best debt consolidation companies and just consolidate what they owe. Others, however, just pay the minimum amount required each month. But the latter option draws out the time it would take to pay down the debt, especially if there is interest involved. If you’d like to make more than minimum payments on your debt but you’ve cut all the costs you can, try increasing your income instead.
There are a number of reasons to increase your income, not just because you need to pay down debts. It could be extra money for a vacation, to save more for a child’s college fund, or simply for retirement. When you have the extra earned income going towards paying down debts, you will be able to breathe a little easier financially.
There are four types of income discussed below. They are possible one-time things, active income, passive income and a mix of active and passive income. The first one is self-explanatory. This income could be a one-time thing, with minimal effort on your part. Active income is when you put in the hours, such as for a job. Passive income is when an object generates money by itself. Lastly, an active/passive mix is when you must put in the time at the start, but then the income generated is passive.
Some one-time ideas to get (or keep) more money in your pocket:
- Get a better bank account with fewer fees and better interest rates
- Ask for a raise at work
- Create a budget where you will be better able to pay down your debt.
Budget-wise, for example, it would be cheaper to buy canisters of coffee than it would be to buy coffee every day.
The ideas which require active participation are:
- Working more hours at work
- Getting another part-time job
- Freelancing from home
- Driving for Uber, or another carpooling service.
Freelancing from home can be in the form of a hobby or where you have experience.
Passive income ideas include:
- Renting a room, or other personal items
- Investing in stocks and bonds
- Buying websites
With the websites, you can either flip them, or you can keep them and earn extra income that way with minimal effort on your part. There are some starter websites out there with a low cost to purchase. When it comes to growing your money with investing, it’s simple to open an account at one of the best online investing sites to get started.
The ideas which are a mix of passive and active include:
- Creating apps
- Blogging
- Earning royalties from music, books, photography.
These ideas require time put into them, especially the last one, but they eventually bring money in once enough people find what you put out.
In conclusion, while being in debt can feel overwhelming and hopeless, there are so many options for creating extra income. The ideas listed above barely scratch the surface of what you can possibly do to rid yourself of your debt and allow yourself some financial breathing room.
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