Monday, January 14, 2008

Q: How Do I Get Out of Debt? A: Make More Money

I'm a massive advocate of "if something isn't right, then fix it." This can mean spending less on frivolities if you have a debt problem. But what about the family or individual that is living frugally and would be hard-pressed to cut anything more from an already lean budget? The answer: find more money.

Finding more money can be done in different ways, with differing levels of ease. Some people mention "snowflaking" (adding additional streams of income to supplement the primary income), and that's an excellent idea. Though, several references I've seen to this involve doing (generally) low-profit, high time investment tasks like online surveys. I recommend capitalizing on doing something you already enjoy.

For me, I like pets, and unfortunately don't live with any, so petsitting allows me time with animals and a way to earn some extra cash. The money I earned from one petsitting client in 2006 is what paid for my plane ticket to Argentina that year -- and that was for only three stints of caring for his cats!

This is just one example of how I've taken something I enjoy and made it into something that earns me extra cash. At other times, I've made and sold greeting cards, written one-off articles, sold books and music CDs online. With the greeting cards, that was a fluke that turned into a minor side business for a couple years. A friend had admired the holiday card I'd made the year before, he ordered many for himself, and I later sold cards to a variety of other people, too.

"But I don't have any skills!" you say. I say: you probably have more skills and knowledge than you think! Most people I've met are good at something that they enjoy as a hobby or just something they're interested in (e.g. collecting anything). So, it doesn't require being a full-time entrepreneur to set up an additional stream of income. For me, I enjoy pets and do some petsitting; I've also sold art/greeting cards. I didn't start petsitting or painting in order to make more money, I did these things originally purely for enjoyment – it was just a bonus that I was/am able to make some money from doing these things.

Real Life Example 1: A friend of a friend started a side business selling used car parts [that he bought cheap from the junkyard], and it ended up being more profitable than his hi-tech job and so he quit to just sell used car parts on ebay.

Real Life Example 2: A former roommate of mine would go to Goodwill on Mondays (tag sale/discount day where she lived) and buy men's suits cheaply (I don't think she ever paid more than $5-10 for a suit). Without cleaning the suits, she would post them on ebay. She was very, very successful, and this project took little of her time (it probably took more storage space...).

Real Life Examples (You!): Maybe you do crafts and can sell them online (e.g. etsy or ebay). If you have a truck and some physical strength, you can help people move or do dump runs for people. If you have time during the days, you could do freelance housecleaning or shopping. If you like gardening, you can do that, too. If you’re good with computers, you could do upgrades and minor fixes. Or maybe you like to sew and can perfectly hem a skirt or trouser in minutes. If the craigslist site in your area is robust, you can often find well-paid focus group assignments (I've seen several in my area, and they generally seem to pay between $40-75 for 30-90 minutes of someone's time). Research things you know about on ebay. The possibilities are staggering and don't require that you commit to a certain number of hours per day/week/month!

I also strongly advocate education as a way to learn more skills and up earning power -- and yes, I know that for some people this involves incurring some or more debt. I know from personal experience that taking classes while working is tough and demanding (I once attended classes four nights a week, after working 8-hr days immediately beforehand -- my social life evaporated for those months, and I rarely saw my boyfriend), and I know that actually quitting your job to return to school is a big, big life change (I did this at 24). Yet for me, finishing my Bachelor's degree was one of the best things I did at that time. I'd been working at a job with very limited advancement opportunities, and I was very low paid. Now, I make 4-5 times what I made then. Since I started working for myself, I make over twice what I was making when I worked in hi-tech, and what I made immediately before going solo.

It's difficult to be in a position where you're not making enough money. I really, truly know this. I also know that it takes guts and drive to change that situation. It took me a full two months to find my first client, and I was scared during those months. I did a little temp work while I was searching for freelance, but only very occasionally. Instead, I worked at upping my writing portfolio, and sending many emails to potential clients. In the end, it paid off very, very well.

I know that going freelance [full-time] isn't the best option for everyone, for a variety of reasons. Yet, I do know that working outside the 9-5 box is what will get someone ahead financially. Please share any success stories of your own!

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