You’ve created a budget. You’ve created a plan for paying off debt. You’re marching on that path of credit repair. But you still feel like there’s more month than money. If you’ve decreased your expenses as much as you can, it may be necessary to increase your income. There are several ways to do this.
Eliminate Some Big Expenses
Three big expenses in most peoples’ budgets are housing, transportation, and tuition. If you need to make big budget cuts, looking at one or all of these three options may be the trick.
Can you move to a less expensive home? If you are renting, at the end of your lease you may want to move into a cheaper apartment. This might even be moving to another city or state. A lot of jobs have transitioned to remote positions and yours may be one of them. Or, you may be able to get another job in another area.
You can also sell your home and buy a cheaper one. There are some tax implications in doing this so speak to your accountant first. If you are currently in a fixer-upper, you may find that selling the house now for what it’s currently worth and moving to something that is the same price but in better shape eliminates all those repair and upgrade costs.
Can you live without a car? Or, maybe you have multiple vehicles and can unload the extra. If you can move, perhaps you can find somewhere to live on a bus or train line. If you have a high maintenance vehicle, consider trading it for something that has lower costs to run, maintain, and insure.
Is your child attending private school? You might consider switching to public school to eliminate that tuition expense. If you are considering moving, check out the public schools in the areas that interest you.
Selling Your Stuff
You could make a healthy chunk of change by doing a deep clean and decluttering of your home and selling things you no longer need. If you have a fair amount of stuff consider having a garage sale. You can also sell things online. Craigslist, Amazon, and eBay are all options for online selling. For large ticket items, consider getting an appraisal first. You don’t want to lose money because you underpriced something. You also don’t want to be stuck with something that won’t sell because you overpriced it.
Increasing Your Income
How long has it been since you’ve gotten a raise? Perhaps it’s time to ask for one. You can also get a second job. If you have a talent people are willing to pay for, considering taking on side gigs in the hours outside your regular job. You can drive for Uber or Lyft, get a part-time retail job, or start a small home-based business. If you already have a consulting business, it may be time to raise your rates. Your customers will expect that you would be doing this from time to time and, if they value your business, won’t balk at the increased rate. If any of them do, they aren’t worth retaining. More customers will come along.
Prioritizing Your Debts While Working on Credit Repair
You’ve already come up with your plan for paying debt off. But what happens if you run out of money? Since late payments affect your credit score, you obviously want to avoid this situation as much as possible. But if you absolutely have to let something slide, you need to prioritize what you pay.
First, all secured loans. This would be your home and your vehicle. If you don’t make payments on these, the institution holding the loan can seize them. If you have a temporary situation, like a job layoff or an illness that keeps you from working, you can contact the lender and ask to make arrangements to get through this time. But don’t skip these payments.
Your next priority is anything that can end up coming out of your paycheck. Student loans, child-support, alimony, and income taxes all can be taken out of your paycheck if they are not paid. So, you end up paying these anyway. By making the payments yourself, you keep control of the situation. If you have a large tax bill, contact the IRS and ask for a payment plan. The IRS is actually quite reasonable to work with. Just be proactive and ask for help.
After these, your next priority is your utilities and things you pay for regularly and can’t live without. We probably don’t need to discuss in detail what happens if you have your water or electricity shut off.
The next priority is your unsecured debts. You will take a hit on your credit report if you don’t pay them on time. This will set back your goal of credit repair. But that is the worst they can do to you. Again, you can always call and ask for any help you need to get over a temporary setback.
Finally, friends and family to whom you owe money. Hopefully, they will understand and support you.
Don’t Give Up on Your Credit Repair
Most importantly, don’t give up on this journey. Getting yourself out of this place of constant struggle to pay things off work and some time but it will all be worth it. If you need some help with debt consolidation, contact TGUC Financial to help you get on that path out of bad credit.
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