Being in debt means you had been living beyond your means. Obviously, you have to correct this and there are two things that you can do about it. One is to cut back on the unnecessary expenses that you had been making. That is the fastest way you can increase your disposable income for your debt payments. However, it is also very limited. This is why it is best to combine it with the other method that will allow you to live within your means: increasing your income.
Across all debt relief programs, these two are quite important. However, it is more prominently needed in balance transfer. In debt consolidation, debt settlement and bankruptcy, you will benefit from a low payment scheme. In balance transfer, it is the reverse. To truly maximize the benefits of this debt relief option, you want to make sure that you will increase your disposable income – especially during the first few months into it.
Balance transfer literally involves transferring the balance of your various debts into a new card account. Usually, this new account is offered with an introductory promo of zero interest for a pre-defined period. This means any payment that you will give to the creditor of the balance transfer card will be credited to your principal debt. No interest will take effect until after the promo period – which is usually 6 months to a year. You have to take advantage of this time frame to pay down what you owe because after the promo, the card will take on a high interest rate.
As discussed, cutting back on your expenses can help (e.g. a frugal budget) but that has a limit. It is best for you to combine it with growing your cash inflow.
There are many ways to increase your income. You can ask to get longer hours at work. You can volunteer to take on more projects that will require you to work overtime and thus earn more. Or you can apply for a second job. Get a seasonal or temp job. An example of a seasonal work include the extra sales crew that retail shops need during the holidays.
There are several possibilities when you are looking for supplemental income. Not only will this help you grow your disposable funds for debt payments, it can also secure your finances so that when something happens to your day job, you still have another source of income.
You can look for a supplemental income online. Remote work allows you to earn more without really leaving the comforts of your home. If you can write, there are several websites in need of great content. If you know how to create websites or if you are a computer programmer, you can also find work online. Start by going to outsourcing websites that can connect you to clients who are in need of a specific skill for their business.
Some people also find that their hobbies can be turned into a cash cow. If you know how to bake or cook, you can sell batches of cookies or pastries to your coworkers. If you have carpentry skills, you can ask your neighbors to place orders for home and garden wood furniture.
Increasing your income only takes some creativity. Soon, you will have enough to pay off a big portion of your debt before the balance transfer promo period ends.