How to Increase Your Income to Pay Off Debt

I get lots of emails from many of you who are just starting on your journey to pay off debt.  Your stories and situations are often similar to ours.  You are excited to find another family who started with big debt.  You are encouraged that we were able to pay off our debt while I stayed home with our kids.

If you’ve followed our story from the beginning, then you know that we have come a long way!  Looking at our income now, our goal to pay off our debt quickly may not seem as daunting a task as it was in actuality.  However, when we set our goal and started the journey, our income situation was much different.

The whole story of income changes would be too long to include here, so I won’t go into all the details. You can find excruciating detail in the four years of monthly posts in which we’ve made our finances public.  Look back at the early months and see our earning, spending, debt pay-off and saving each month.

As a summary, here is the visual that I shared in the Behind-the-Scenes Look at Our Journey to Pay Off $144,000 of Debt. This shows how our income (and debt payments) increased during the time we worked toward paying off debt.

The blue lines represent our income during our debt payoff journey.

After seeing how much our income increased over that time, especially near the end, I often get asked by new readers how we grew our income to help us pay off our debt.

That’s what I want to talk about today:

How to increase your income to pay off debt faster.

Because who couldn’t use some additional money each month to put toward debt?!

But WAIT! Before you try to increase your income…

I don’t recommend trying to increase your income as the first step of paying off debt.

First, you must get your spending under control.

You wouldn’t keep trying to fill up a bucket with a leak at the bottom or go blue in the face blowing up a balloon with a hole.  Make sure there are no leaks in your budget before you start funneling more money into it!  Otherwise all your hard work will be for naught and won’t expedite your debt payoff.

If you are just starting out on your journey to pay off debt, check out my Smash Debt Quick-Start Guide to help you get organized and make a plan to pay off your debt.

When you have your plan and you’re ready to increase your income, here are some tried and true ways to do it.

1-Sell Stuff

Start simple.  Sell things from your own home that you don’t want or need anymore.  This is something everyone can do.

Take clear pictures of what you’re selling and write an honest, detailed description of the item.  Post what you have for sale on Craigslist or in a local buy-sell-trade Facebook group.  Depending on what the item is, you may want to try selling it online on Ebay or Amazon.

We lived in the boonies when we paid off our debt, but I made selling stuff work for me by scheduling  meets with potential buyers at the library on the only day I went into town each week.  Occassionally I would even buy items at the thrift store that I knew I could resell for more.  I also used this strategy when we were furnishing our home during law school and we came out ahead (essentially furnishing our house for free!).

While this isn’t a long-term plan for increasing your income (unless you continue to source more inventory at yard sales and secondhand stores), it is a good way to get started tackling your debt (and decluttering your house!).

2-Start a Business

For us, starting a business was a huge boost to our debt payoff!  In fact, both my husband and I started businesses during our debt payoff journey!

My first business was an Etsy shop that I started back when my husband was in law school.  My little Etsy shop fed us during law school, which kept us from taking out even more student loans!  I have a whole blog series about making money on Etsy that you can check out if you’re a crafty type!

When we decided to pay off our debt in a hurry, I decided to start a blog to chronicle our journey and share tips on frugality and budgeting.  I knew that you could make money blogging if you did it right, so I started off on the right foot by reading this book, then later I enrolled in Elite Blog Academy (it only opens once a year, so get on the waiting list to hear when it opens next).

I won’t go into all the details here (I could go on and on!), but if you want to hear more, you can read about how my first blog failed and what I did differently to succeed the second time around.

When my husband left his job at a small law firm to go work as an attorney for the state of California, he made sure that they were okay with him having his own law firm on the side.  Since it’s a completely different area of the law and there’s absolutely no conflict of interest, they were fine with him working on the side. Originally he just planned to continue working with current clients who didn’t want to let him go, but then people started coming out of the woodwork and his nights and weekends got really busy.

Starting an Etsy shop, a blog, or a law firm might not be your thing, but there is something that you’re skilled at and passionate about that would make a great business if you’re up for the investment of time, heart, and a maybe a little money.  If you’re working to pay off debt, I wouldn’t invest lots of cash into a new business, but you can start a lot of small businesses with very little money up front.

3- Find a Side Job

Not everyone is the entrepreneurial type.  Building your own profitable side gig may take more time than you want to invest at this point in your financial journey.  If creating your own job isn’t for you, look for a part-time job that you can do on the side in addition to your regular job.

If you’re a stay-at-home parent, you can find jobs that are flexible or that you can do from home.  While there are lots of great opportunities out there, there are also plenty of scams, so be careful.

If I didn’t already have my blog, I would apply to teach English with VIPKid.  They were #1 on Forbe’s list of best work-from-home companies.  When I looked into the program I found it’s right up my alley!  The way the schedule works with teaching kids in China, you can even get up and do your teaching before your own kids wake up.

4- Ask for a Raise or Overtime

If your job offers overtime, a great way to increase your income is simply to work more hours.  Take an extra shift or two when they’re available.  Cover for co-workers who want to take time off.  Funnel all of your overtime money toward your debt pay-off.

Hopefully it goes without saying that you’re doing your best at your job.  Make yourself indispensable as an employee.  Go above and beyond.  Have a good attitude.  Get along with others.  Be willing to learn.  Show a real interest in the company by sharing ideas for improving processes in the workplace or saving your company money.

Be so awesome that your boss won’t think twice about giving you a raise.  You might have to still ask for it though.  If the answer is no, ask what you can do to be considered for a raise.

5- Consider a Job Change

I know changing jobs sounds drastic.  Don’t tune me out though.  Not everyone will be willing (or have the opportunity) to change jobs, but it’s an avenue that’s definitely worth investigating.

I wish we would have considered a job change sooner.  Changing jobs made a huge impact on us reaching our goal.

If you have a good relationship with your current employer and you’ve tried to make yourself indispensable, don’t be afraid to be upfront with them.  Let them know you’re looking for a position where you can increase your income so that you can make better progress on your financial goals.

As you look at the opportunities available, be sure to look at the big picture (travel, health insurance, benefits, etc) when you compare them with your current job.

Having your foot in the job market puts the pressure on your current employer to try to keep you around (assuming you’re an awesome employee that the company doesn’t want to lose).

Once you have tamed your spending and are sticking to your budget, it’s increasing your income that can really move your debt-free journey along.

You probably won’t be incorporating all five of these ways to increase your income into your strategy, at least not all at once.  I wanted to lay them out together though, so you can see the different options you have for generating more income.

The actual specific ways that each of you will increase your income will vary.  We put most of our efforts into starting businesses and eventually into changing jobs.  Maybe for you, a part-time job on the side along with some overtime will work.

You can do this!

Watch out debt!

How about you?

• What have you done to increase your income to pay off debt?
• What other ideas do you have

This post contains affiliate links for products or services that I highly recommend.  Don’t worry, I only share awesome stuff that I’d share with the people I love!