Should I Get a Second Job to Pay Off Debt?

Semi Truck Driver Job

When you're struggling to climb out of debt, your current income might not be enough to pay off what you owe as fast as you'd like. Getting a second job can be a useful option to help you get debt under control, but it may not always be realistic or the right move.

If you want to make a bigger dent in your debt, but you're already making ends meet just fine, you'll need to weigh the extra stress of getting another job. But if you're unable to pay your bills on time or even make minimum payments, and have already cut back on your expenses, finding another source of income could help you get your finances back on track.

How to Earn Extra Income to Pay Off Debt

Before you take on a second job, take a close look at your budget or bank statements from the past few months to determine if you can instead simply cut back on your spending. You may discover that you can free up some cash by reducing discretionary costs (like getting rid of some subscription services) or by changing your habits (like less takeout and more cooking at home).

But if there are no more cuts you can reasonably make, and your debt balances are overwhelming, earning extra income could be the best way forward.

You could get a part-time job at a local shop or eatery, where you'll work a set number of hours on a regular schedule. If you require more flexibility, though, there are plenty of ways to earn income with gigs and so-called side hustles, such as:

  • Delivering meals or groceries through apps like DoorDash or InstaCart.
  • Giving rides through rideshare services like Uber or Lyft.
  • Babysitting children or offering in-home care to senior citizens in your neighborhood.
  • Tutoring students in an area of your expertise, either in-person or online.
  • Mowing lawns, cleaning houses or performing other odd jobs for people in your community.

There are also an increasing number of ways to make extra money from home, which is ideal—or even medically necessary—for some during the ongoing pandemic. You could explore freelancing for businesses or individuals who need your skills. Whether you're a pro at proofreading, graphic design, data entry, translating or anything else, you may be able to find one-off or ongoing gig options on sites like Guru, or Upwork. Even if it's not your profession, you may be able to make money using skills picked up while working on a hobby, such as drawing, painting or sewing.

You could also look for a part-time, remote job on FlexJobs, which curates work-from-home job listings. An increasing number of companies are now willing to let employees telecommute, so a silver lining of the pandemic could mean even more opportunities to earn income from the safety of your home.

You can also get creative, such as selling used clothes or other household goods online. Another option is creating a stream of passive income by renting out a spare room or property you own. There are even apps that let you rent out your car or parking space when you're not using them.

Whatever option you choose, make sure you're operating above board by following local, state and federal business laws and paying taxes properly. And don't forget about your personal safety—keep an eye out for those who may be looking to take advantage of you financially or in other ways. Exercise caution when performing side jobs, as protecting yourself and your personal information is more important than paying down your debt.

How to Prioritize Debt

If you have multiple debt accounts weighing you down, it's wise to carefully prioritize which to pay off first. There are differing philosophies on debt repayment, and it's important to find the one that works best for you. That might mean focusing on the debt with the highest interest rate (usually credit card debt) since it costs you the most money over time. But that's not the ideal strategy for everyone.

Some prefer the debt snowball method, where you prioritize your debts with the lowest balances first. You make the minimum payment on all debt accounts except the one with the lowest balance, which you'll pay as much as you can on.

Once that debt is knocked out, you'll shift your focus to 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. As you pay off accounts, you'll free up more money to put toward the next outstanding balance.

Another method is the debt avalanche, which instead 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 you can toward the account with the highest interest rate, regardless of balance. Once that account is paid off, you'll focus on the one with the next highest interest rate, and so on.

This tactic can save you more money on interest in the long run, but it can take longer to pay off the accounts. Since your progress is not as immediately obvious compared with the snowball method, the avalanche method can make it harder for some to stay motivated.

Additional Strategies for Paying Off Debt

In addition to earning additional income and starting with a debt repayment strategy, there are a few other things you can try to help you get free from debt:

  • Create a budget. This may sound obvious, but if you haven't created a budget, you don't have a clear view of money coming in and money going out. Budgeting can help you live within your means by identifying places where you may be able to cut costs and redirect money to debt payments at least until your debt is paid down.
  • Consolidate debt. If you have multiple forms of high-interest debt, such as several credit cards, another option is to consolidate them into one account, ideally with a lower interest rate. One way to do this is with a low-interest debt consolidation loan you can use to pay off your other debts. Then you're left with one monthly payment, which can be easier to manage than having multiple accounts with different due dates, interest rates and payment amounts. If you have high-interest credit card debt, another option is to do a balance transfer to a credit card with an introductory 0% APR period.
  • Consider credit counseling and debt management. If you're unable to wrangle your debt on your own, you could meet with a nonprofit credit counseling agency, which can help you form a strategy and create a budget. They can also put you on a debt management plan, in which they may be able to negotiate lower interest rates with your creditors. With this plan, you make one monthly payment to the agency, and they distribute it to your creditors.

Weigh Your Options

While getting a second job to pay off debt may be a viable option, it may not be right for you—or the extra income may not be enough. If you have high-interest debt and are considering taking out a loan, it's free to check debt consolidation loans at Experian CreditMatch™ that are customized according to your credit profile.

Paying down your debt can bring you a lot of personal satisfaction, and can help you save money that's better put toward personal financial goals like buying a house or saving for retirement.