National Debt Relief - BBB Accredited Business - Get Relief From Credit Card Debt, Medical Bills And Unsecured Loans

9 Ways To Earn Extra Money to Pay Down Debt You’ve Never Thought Of

College student catching money in the airWhen you think about earning extra money to pay down debt, what do you think of? Most people would think about things such as having a garage sale, selling stuff on eBay or horror of horrors, getting a second job. The problem with options like garage or estate sales or selling stuff on eBay is that you probably have a limited number of items available to sell. So what would you do when you run out of that stuff?

Getting a second job is one of the best ways to earn extra money to pay down debt but it just doesn’t work for everyone. We live pretty much in a 24/7 world now and the hours you’re working at your primary job just might preclude you from getting a second gig. For example, we know of tech support people that work shifts like 10 AM to 6 PM or even 10 PM to 6 AM. It’s just not possible for people like that to take on second jobs. Even if you have a traditional 8 AM to 5 PM job you might find that there are many days of the week when the job just doesn’t end at 5 PM.

So if you fall into one of these categories what could do to earn extra money?

#1. Put your car to work

If you own your car you could put it to work earning money for you. In today’s sharing economy there are numerous people looking to rent other people’s cars instead of purchasing their own. There are sites such as RelayRides and GetAround where you could connect with people that might be interested in renting your car by the day or even a week. If you’re not in a position where you could rent your car you could pick up extra money through Lyft or Uber where it’s possible to earn up to $35 an hour by taxiing people around. Plus, you get to set your own hours.

#2. Do mystery shopping

Here’s another part-time gig you could do where you get to choose your own hours. If you’re not familiar with mystery shopping it’s where you go into restaurants, stores and other places of business and then report on your experiences to help the companies determine how well they’re doing in customer service. You not only make your own schedule as a mystery shopper but you could take on as many or as few assignments as you chose. Some people who do mystery shopping take just a few assignments a week and make maybe $100. If you were to treat mystery shopping more like a full-time job you could earn up to $500 a week.

#3. Become an eBay drop shipper

If you don’t have stuff of your own to sell on eBay you could become a drop shipper or middleman. This can be a great gig because you don’t even have to ship stuff yourself. You find companies that are willing to use drop shippers and then list their products on eBay along with some good sales copy. When you make a sale, you notify the company that has the product and it ships it to your buyer for you. There is an online wholesale directory called SaleHoo that has listings for more than 8000 prescreened suppliers including companies like Playskool and Gap. Sign up for some of these companies and you would then become a storefront selling their products. The money you earn would be the difference between their wholesale prices and what ever it is you sell the merchandise for.

#4. Do affiliate marketing

Many different companies including well-known ones such as Amazon and Starbucks are looking for new customers and are willing to pay to get them. The way affiliate marketing works is that you promote a company’s’ products or services using a unique URL. When a person uses that link to buy the company’s products, you get a commission. Sites such as Share a Sale and Rakuten Affiliate Network are affiliate consolidators where you can find many different companies willing to pay you a commission to help sell their products or services. If you’d like to know more about affiliate marketing, go to the website Affilorama where you’ll find training information that could help you be successful.

#5. Become a direct seller

Thousands of people make extra money by direct selling for companies such as Avon and Mary Kay. Direct selling has earned a sort of poor reputation but does offer the opportunity to make an enviable amount of money while still working a full-time job. Direct selling isn’t just about cosmetics, either. You could earn a nice extra piece of change selling wellness products like Advocare, pet products, Tupperware or accessories.

#6. Join focus groups

Companies that would like to improve their marketing and advertising periodically conduct focus groups consisting of potential customers to help them understand what’s working and what’s not working. If you have the time necessary to participate it’s a good way to earn extra money. There are many companies that are actually anxious to pay you for your insights as a consumer and in some cases they’ll even come to your home. One company recently held a focus group that lasted two hours and consisted of talking with just several people about snack foods and tasting some cookies. The person hosting this group earned $250. The website FindFocusGroups.com has listings of companies looking for people that would like to participate in focus groups. Alternately you might search Craigslist using keywords like “paid study,” “market research” or “surveys.”

#7. Become a consultant

Many small companies need help but can’t afford to work with one of the big, well-known consulting groups. Instead, they look for individuals like maybe you where they can get the same skills cheaper and on an ala Carte basis. For example, HourlyNerd connects well-educated professionals with small companies that need consulting help. If you have skills in areas such as marketing, social networking, search engine optimization or program management you could pick up a nice bit of change by consulting with companies that need these types of skills.

#8. Be an online jurist

There are trial attorneys that look for people to judge cases that haven’t gone to court yet. They use online jurors to help figure out what an average group of people might think about the merits of their cases or how they might respond to the attorney’s concepts or tactics. Companies such as Online Verdict enable attorneys to access regular people to serve as online jurors. If you meet the criteria to sit on one of these juries you would likely earn between $10 and $60 for your time.

#9. Rent out a room or your househouse with cash in it

If you have a spare room in your house why not rent it out using a site like Airbnb that connects travelers with people that are willing to rent out a room or an entire house. There are also sites such as the VRBO (Vacation Rentals by Owner) and HomeAway where you could rent your house to paying guests when you’re away from home. In the event you have a friend that would let you sleep on his or her couch you could rent your house for a period of time without even leaving town.

Save More Money Or Pay Down Debt? Ay, There’s The Rub

stressed old manIn his play “Hamlet, William Shakespeare wrote, “To die, to sleep;
To sleep: perchance” to dream: ay, there’s the rub…” But a better question today might be “which comes first to save more or to pay down debt, ay there’s the rub.

10% to 20% – seriously?

Financial advisers say that we should be saving 10% to as much as 20% of our income. But the latest data from the Federal Reserve Bank of St. Louis is that the United States’ savings rate is just 4.2%. Why do so many of us have a tough time saving money? In most cases it’s because we’re deeply in debt. If you’re facing the double curse of high cost debt and little in the way of savings, what’s better? Should you put your money into savings or pay down your high interest debts as quickly as possible?

Put first things first

The simple fact is that if you have high interest debt and are trying to save money it’s like trying to swim when you have a cement block tied to your feet. Paying down high-cost debt should always come first before trying to save money. Here’s why. Let’s suppose that you are carrying $10,000 in credit card debt at a 15% interest rate. If you make just the minimum payments each month, it will take you nearly 30 years to pay off that debt and it would cost you about $12,000 in interest. As you can see from this example, your number one priority should be paying down debt before you do anything else, including putting money into savings. That’s because this will have a much bigger impact down the line – especially if you’re dealing with credit card debt.

However, most experts also say that before you start using money to pay down your debt you need to put a little bit aside as an emergency fund. Ideally this should be three to six months worth of living expenses. Unfortunately, that’s not easy to do if you’re carrying thousands of dollars in credit card debt. So instead of this, you might try to start with $2000 so you would have some money to cover unexpected bills.

Get a guaranteed return

The biggest benefit of paying down credit card debt is that it gives you a guaranteed return on your money. You can precisely determine and quantify a guaranteed rate of return by using your interest rate, balance and payment plan. While you would be lucky to earn 2% these days on a certificate of deposit, you could get a guaranteed 15% or more by paying down your credit card debt – making this a very good deal.

Save a fortune

When you pay more on your debt you will not only get out of debt faster, you will save a fortune in interest. Plus, once you pay down that debt you will be able to put a lot more money in your savings.

Back to the previous example

If you go back to the example given above of the $10,000 in credit card debt let’s assume that you increase your payments to $400 per month – instead of making just the minimum payments. In this case, you’d pay off your debt in three years and your interest costs would be only $2000. That would be a savings of $10,000 that you could then add to your savings account in subsequent years instead of your bank getting the money.

$9600 in just five years

In this example if you did increase your payments to $400 then continued to save that $400 per month once you paid off the debt, you’d not only be debt-free you’d have $9600 in the bank in just five years.

get out of debtPaying off that debt

One way to get out from under credit card debt is to get a home equity loan or home equity line of credit and pay it off. This would dramatically reduce your interest rate, which will reduce the amount of interest you will end up paying. However, there is a danger to this and you should tread very carefully with the equity in your home. The problem is that you would have a new loan and if not careful, could very well rack up new credit card debt. This would leave you in a worse situation because you would now have a home equity debt as well as credit card debt. For this to work, you need to have a tremendous amount of discipline and personal commitment because if you don’t, you could easily end up in even worse shape than before you took out the loan.

Another option

Another way to get credit card debt under control would be to do a balance transfer from your high interest cards to one with a lower interest rate. There are still cards available that give new cardholders anywhere from six to 18 months with 0% interest. However, before you rush off to get one of these cards make sure that you read the fine print as some have balance transfer fees of 2% to 3%. Plus, you must pay off the credit card before your promotional period expires or you’ll be hit with more interest that could be as high as 18% or even 20%.

Snowballing your debt

Third, you could use the snowball strategy to pay off your debts. The way this works is that you start by paying off the card with the lowest balance because this will give you a psychological boost to continue paying off your debts. And when you get that first credit card paid off, you will have more money available to begin paying off the debt with the second lowest balance and so on. Where this strategy gets its name is because as you pay off that first debt you will begin to gather momentum just like a snowball rolling downhill. Many people have paid off as much as $25,000 or $30,000 in debt in just two to three years by using this strategy. It was invented by the financial guru, Dave Ramsey who explains more about it in this brief video.

The worst option

There is yet another option for getting out of debt that is sometimes called the “nuclear” option. It’s to file for a chapter 7 bankruptcy. If you can qualify for one of these bankruptcies you will get all of your credit card debts discharged (eliminated). If you have medical debts, a personal loan or personal line of credit, they should also be discharged. But there’s a good reason why this is often called the nuclear option. A bankruptcy will stay in your credit file for at least seven years. It’s likely that you would not be able to get any new credit for the first two or three years after the bankruptcy and when you can get credit it would come with a very high interest rate. Plus, there are some debts a chapter 7 bankruptcy can’t discharge, including student loan debt, alimony, child support, a mortgage or auto loan and any debts incurred through fraud.

Marked for life

The worst consequence of a chapter 7 bankruptcy may be the fact that it will stay in your personal file for the rest your life. Fifteen years from now you could get turned down for a really great job when your prospective employer saw that you had a bankruptcy. Many employers now routinely check credit reports as part of their hiring process. And like it or not, some people will always hold a bankruptcy against you because they believe it shows that you’re irresponsible when it comes to handling your personal finances. Your chances of getting that dream job may also be reduced if that prospective employer sees other negative items in your credit report such as late payments, defaults, accounts that have gone to collection and charge offs.

The best policy

What this all means is that the best policy is to get your debts paid off as quickly as possible. This should always come first before putting money into savings. It will pay off big in the long-term and when it comes down to it, what’s better – to be in debt or debt free? If you were to pose this question to that group of kids sitting around a table in those commercials that are currently running, we’re sure they’d all yell “debt-free.”

Mobile Menu
MENU