Working Harder To Pay Down Debt
When you are trying to lose weight and keep it off, you need to do one of two things, health experts say -- decrease your caloric intake or increase your physical activity.
A similar strategy works when you are trying to shed a lot of debt. You can either cut back on your spending or increase your income. Often you have to do both because you can cut only so much.
Getting part-time work was the last major piece of advice I gave the Color of Money Challengers, four people -- two single women and one couple -- who volunteered to undergo my financial boot camp to achieve their New Year's resolutions. This is the latest installment in a series that has followed Carl and Tania Chandler, Carlesa A. Washington and Annie Schleicher in their quest to pay off thousands of dollars in credit card debt.
At this halfway point, the challengers have all done well. However, they still have to do more to get rid of their debt before the end of the year.
The Chandlers, who live in Maryland, have reduced their credit card debt to $12,000 from $14,400. Tania Chandler, a school counselor, recently changed her work schedule, adding more hours and an additional $6,000 to the couple's combined $137,000 annual income.
No question that that's a healthy income, but their fixed expenses, including a large mortgage payment, leave little room for significant debt repayment.
The Chandlers have young children, Myles, 5, and Sydney, 3, so they both can't work second jobs. The extra expense for day care would largely offset the additional income. However, Carl Chandler can earn extra money as a telecommunications consultant. He can install and reprogram telephone systems. That's what he does on his day job.
In the spring, he made $2,000 setting up new phone lines for a small insurance agency when it relocated. With several more of these jobs, the Chandlers could knock out their credit card debt by the end of the year.
Washington, a 24-year-old recent college graduate living in the District, doesn't have many expenses. So there's not much to cut. She lives with her mother and doesn't pay rent. Her car is paid off. As I recommended, she dropped the Internet service she gets on her cellphone, which was costing her $20 a month.
Washington, who earns $34,000 a year, has been the most successful of the Challengers in making extra money. To do so, she spent $595 of her savings at the Professional Bartending School in Arlington.
I was a little skeptical when Washington told me the cost of the training. Far too often, people desperate to make money get involved in schemes that only put them further in debt. I would never have approved of the training if Washington couldn't pay for it in cash. In her case, the investment was worth it.
In the past five months, Washington has earned $2,400 bartending at private parties. She landed a job working weekends at a nightclub and expects to pick up $400 a week before taxes.