Welcome to the final part or our series. As you remember, last week we covered steps 4-5: Paying off your debt, and starting to save. This week we will be finishing our series by covering steps 6-7: boosting your income and avoiding lifestyle inflation.
Step 6: Boost your Income
This might sound like a no brainer, but a crucial component to any debt reduction plan is going to be boosting your income. Obviously everyone wants to make more money, but finding practical ways to do it is easier said than done. We understand that unemployment is a major issue for many households in America, so some of these tips may not apply to everyone. But own economy aside, if you find that even after you have trimmed your budget you’re still having problems making progress with your savings goals, then it’s time to find creative ways to boost your income.
Pick up an extra shift: For many people the quickest way to generate a little extra money is as simple as picking up an extra shift. If you are fortunate enough to work somewhere that offers overtime, then take advantage of it when you can. It’s by far the easiest way to generate a little extra cash flow. If overtime is something that isn’t usually offered, it might be worthwhile to have a candid conversation with your employer about it. It never hurts to ask.
Ask for a raise: If picking up extra shifts and overtime don’t sound like your cup of tea, your next option is asking for a raise. This can be a sensitive task to undertake, the fear of rejection is something we all dread (the down economy isn’t helping either). Just remember this, if you feel like you deserve a raise, ask for one. What’s the worst that could happen?
Find another job: If your attempt at getting a raise produced an unimpressive result, then perhaps it might be time for you to start thinking about getting a new job. Obviously this is easier said than done– switching jobs is no easy task, especially if you’re living a paycheck-to-paycheck lifestyle. Don’t get discouraged though. Somewhere out there is a better opportunity, you just have to find it. For a more in-depth explanation on switching jobs check out this article on switching jobs.
Take a side job: Side jobs are great way to earn some extra cash. Plus if you’re smart about it, they can be great opportunities to monetize your personal interest or hobbies. Do you have any interesting talents or skills that can be easily turned into side gigs? Get proactive about marketing yourself; you never know who might hire you.
Step Seven: Avoid lifestyle inflation
If you manage to boost your income and get good at saving your money, then pat yourself on the back. You have officially become a member of an elite group of individuals. Be cautious to not let yourself splurge here and there just because you have a little extra money. If you boost your income, don’t immediately go to work trying to find creative ways to spend your new found money. Here are few simple tips to help manage lifestyle inflation.
Be realistic about what need/want: If you are at the mall and see something you can’t live without, don’t let yourself buy it immediately. Go home and give yourself an opportunity to think about it. Chances are that you probably will forget about it within a few hours. How often have you bought something only to take it home and never use it?
Avoid new expenses: A new car or a bigger apartment might sound really appealing, but resist the urge to upgrade your lifestyle. If you can manage to stay within your old budget by avoiding new expenses, all your new found income will go straight to your savings account.
Plan your purchases: Never allow yourself to buy something on a whim (even if it’s on sale). If you really want to buy something, plan for it. Planning for your purchases will help you understand what you really value. Plus as an added benefit, you will have more time to shop around for good deals.
Have a unique experience trying to get out of debt? Have any insights or tips that might help others? Leave a comment below to share with the community.