Did you know that the higher the debt consolidation payments, the faster you can improve your financial situation? With the holidays a month or so away, you want to make sure that you can improve your personal finances significantly. At least, if you want to enjoy the holidays, you should do your best to get rid of your debts.
But how can you do that? How is it possible to increase your monthly payments towards your consolidated debts when your income is barely enough to pay the minimum?
According to reports, young Americans are not in a good financial situation – thanks to all their credit obligations, the high cost of living, and the current economic situation. In fact, it is revealed that the average Millennial has a net worth of $8,000 only. While it is true that they are just starting their lives, it is not an excuse to have so little in terms of assets. If they really want to get ahead in life, they have to work harder to build up their personal net worth.
To do that, they have to make sure that they can pay off all their debts. If the experts are right in their assumption that a recession is around the corner (or maybe already upon us) how can you hope to sustain your debt consolidation payments?
Obviously, you need to start earning more money.
How to increase income for debt consolidation payments
There are many strategies to pay your consolidated debts successfully. But the most effective is making sure that you can pay as much as you can towards every monthly payment. To do that, you obviously have to increase your monthly cash flow.
Here are tips that will help you earn more money so you can fund your debt consolidation payments.
Start a side business
Admittedly, this will seem like a huge task that requires a lot of effort – especially if you have a 9-5 job. Finding the time to start a side business and to run it successfully might seem stressful. However, there is one way to make it more enjoyable. You should start a business that will capitalize on what you are good at. If you are an expert on something, there is no need to exert a lot of effort to do your work. You are an expert after all. When your side business starts to take off, you can use the profit to finance your debt consolidation payments.
Capitalize on your hobbies
If starting a business based on something that you are good at is not possible, then you might want to focus on your hobby. What do you like to do? Most of the time, if we are doing something that we like, the effort we are exerting will not feel like work at all. It is easier for us to be good at it simply because we like doing it. And we will not mind working on it even in our free time. For instance, if you love to cook, you can prepare a huge meal that you can sell to your co-workers. You can offer it at a lower amount than what they would have spent if they had to buy lunch in a restaurant. It will be healthier for everyone and you get to earn a little extra on the side for your debt consolidation payments.
Become a freelancer
Sometimes, starting an actual business involves too much work. You have to apply the permits and licenses that will allow you to operate the business. If you want none of that, you can always become a freelancer – someone who offers their skills for a certain fee. These skills include writing, graphic design, programming, etc. According to statistics, people from every industry can find work as a freelancer, like finance, transportation, education, healthcare, construction, and even agriculture and forestry. You should be able to find a client who will pay to benefit from your skills for a short time.
Choose a passive source of income
If you can set this up, it will really be an easy way to earn more money to pay off your debts. A passive source of income means you only have to work on it once and then it will keep on earning you money. For instance, you can set up a rental space – like an extra room in your house that you can rent as an Airbnb. Or you can turn your garage or basement into a 1 bedroom unit and lease it to a tenant. Other simple ways to earn a passive income includes taking beautiful photos and uploading them to photo sharing websites. If someone uses that photo, it can earn you some extra money.
Benefits of increasing debt consolidation payments
All of your efforts to earn more money will bring a lot of benefits if you can use it to add to your debt consolidation payments. It helps to get to know these benefits so it can motivate you in your pursuit of higher monthly cash flow.
Get out of debt faster
The first benefit to bigger debt consolidation payments is it will help you pay off your balance faster. When you make bigger monthly payments, it will significantly reduce what you owe. Instead of being in debt for a longer time, you get to cut short your debt relief program by a couple of months – or maybe even years if your added income is big enough.
Save money on interest
As you make bigger payments, you will be paying more of the principal amount. This will lower the high-interest amount that you have to pay. Usually, when you cut short the repayment period, it will help you save a lot of money. You get to pay less of the interest amount. If you have a high-interest rate on your debt, this can be a significant amount.
Start on new financial goals
Finally, the bigger debt consolidation payments will also help you move on to another financial goal. The money you are using to pay for the debt can be used to invest or save up for something else. You can start saving for the downpayment of a new house. Or you can use it to pay for your graduate studies so you can qualify for higher pay. These are only a few of the things that you can benefit from if you earn more money so you can pay more towards your debts.