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When you're struggling with debt, your income doesn't go as far and it can be difficult to make progress reducing your balances. Whether you're struggling to keep up with credit card or loan payments, or you just want to pay off your debts faster, it could be worth taking on another job.
Getting a second job is a useful strategy to get debt under control, but it may not always be the realistic or the right move. Here's how to decide whether it's worth it to take on more work to help you conquer debt.
Is It Worth Getting a Second Job to Pay Off Debt?
If your current income isn't enough to comfortably cover your regular expenses and pay off your debts, you have a few options. One is to cut back on expenses so you can put more of your current income toward your debt balances.
When you don't want to tighten your budget further—or there's nothing left to cut—the answer could be getting a second job, even temporarily. Here are some pros and cons to consider before you take on additional work to tackle debt more aggressively.
Pros of Getting a Second Job
The upsides of taking on a second job can be significant, including:
- Increase your take-home pay. By starting another job, whether it's a steady part-time gig or occasional side hustling, you'll bring in more money and give your budget breathing room.
- Pay off debt faster. Earning extra income can help you pay down debt balances faster, whether you make larger or extra payments. You'll also pay less in interest fees over the life of the loan by paying down your balances faster.
- Do more of what you love. Say you have just enough current income to cover the essentials, but not enough left for the things that bring you joy, like travel, concerts or dining out. A second income stream can add wiggle room to your budget for fun, which could give you motivation to stick with your debt repayment plan.
- Explore other interests. A side hustle or additional part-time job presents an opportunity to try something new. For example, if you adore dogs but your day job is in technology, perhaps you'd enjoy becoming a dog walker so you can make some extra money in your free time doing something that's both different and fun for you.
- It could lead to better full-time prospects. Working a second job or a side gig could provide you with additional marketable skills or new professional contacts that could lead you to a better, higher-paying full-time job.
Cons of Getting a Second Job
It doesn't make sense for everyone to take a second job. Here are potential downsides to consider:
- It may not be realistic. If your schedule is already packed with work, family and other obligations, it's possible you don't have enough time to realistically take on another job.
- It can add to your stress. Financial issues and debt are already stressful. Working a second job can take an emotional and mental toll, leaving you with less room in your calendar to get quality time with loved ones, relaxation and self care.
- It could endanger your day job. Some employers have restrictions on "moonlighting," especially if it could be viewed as competitive. Even if you don't have that issue, it's possible that if you're burning the candle at both ends, it could hurt your performance at your primary job.
- It takes discipline. For that extra money to actually go toward your debt, you must be on top of your finances and follow through. Some may find it hard to avoid the temptation to use this new income for other purposes. If you foresee this being a challenge, consider setting up automatic payments so the money serves the right purpose.
- It could have a negative tax impact. Adding a second job, or even a side hustle, could push you into a new tax bracket or require you to pay self-employment taxes. If you don't plan for this possibility, you could face a big tax bill at the end of the year—and even more debt to repay.
5 Ways to Earn Extra Income to Pay Off Debt
If the pros outweigh the cons, it's time to figure out how you'll bring home the (extra) bacon. Here are some popular options for debt payoff side-hustles.
- Get a regular part-time job. If you need consistent extra income, look for a traditional part-time job in your free time, such as working at a retailer every Sunday afternoon or bartending two evenings a week. This requires more commitment than one-off gigs but offers more stability.
- Use gig economy apps for work. If you need flexibility, explore the vast array of apps providing short-term gigs on your own schedule and in amounts you want. Some options include driving through Uber or Lyft, walking dogs on Rover or Wag, delivering food or groceries with Instacart or GrubHub or doing odd jobs on TaskRabbit.
- Work for your community. Brainstorm useful skills you could get paid to do in your local community without needing professional experience. Examples include babysitting, petsitting, helping senior citizens, mowing lawns, power washing, moving furniture and cleaning or organizing houses. Create flyers for neighbors or advertise on NextDoor.
- Sell things online. Make a quick buck by selling items online that you no longer need. Ebay is still a great place to sell anything, though there are also specialty apps, like Poshmark for clothes and shoes. Facebook Marketplace is ideal for large items that need local pick-up—just make sure to do it safely.
- Try freelancing. Put professional skills and talents to work as a freelancer, either for one-off projects or hourly work. It's ideal for skills like tutoring, writing, editing, graphic design, photography, communications, website building and event planning. If you don't have many contacts, you could find work on websites like Upwork or Fiverr. Established professionals might find leads by posting on social media and networking on LinkedIn.
Additional Strategies for Paying Off Debt
Besides earning additional money, there are other ways you can make a dent in your debt, from reducing expenses to strategizing how you pay off debts.
- Tighter budget: Making more money isn't the only way to hasten debt repayment; you can also free some up by cutting expenses. If you have subscriptions you can do without (even temporarily), purchases you can delay or expenses you can reduce, this can divert more money toward debt.
- Debt snowball method: This is a debt payoff strategy that prioritizes debts with the lowest balances first. You make the minimum payment on all debt accounts except the one with the lowest balance, to which you'll pay as much as you can. Once it's paid off, you focus on the account with the next-lowest balance, and so on. By starting with the smallest debts first, you pay off accounts faster, which can give you a motivating sense of momentum. Also, as you pay off accounts, you'll free up more money to put toward the next balance.
- Debt avalanche: Another debt payoff strategy, this tactic prioritizes the balance with the highest interest rate. Like the snowball method, you pay only minimum payments on all other debts, but you'll put as much as possible toward the account with the highest interest rate, regardless of balance. Once it's paid off, you'll focus on the one with the next highest interest rate, and so on. This can save you more money on interest in the long run, but it takes longer to pay off the accounts, so it doesn't provide the same sense of momentum as the snowball method.
- Debt consolidation: If you have multiple debts and remembering to pay them all is a challenge, or you have high-interest debt, consider a debt consolidation loan. This wraps your debts into one monthly payment, and the better your credit score, the more likely you are to get a low interest rate.
Your Credit Might Thank You
Earning extra income doesn't just speed up the progress of debt repayment. It can give you a financial cushion to help ensure you're able to make all of your bill payments on time. This matters because the most important factor in your credit score is your payment history, so if these strategies above make it easier to pay your bills consistently, your credit could benefit.
You might also see credit improvements as you lower debt. Sign up for free credit monitoring with Experian to keep an eye on how your debt repayment journey impacts your credit.