This article is part of an M-Network group writing project, the 12 Days of Christmas – Personal Finance Style. Last year, the M-Network changed the lyrics to the popular Christmas song to give them a financial twist. This year, we are at it again. The First Day of Christmas was held at Paid Twice; this is the Second Day of Christmas.
Two Financial Goals – Less Debt, More Income
The Christmas season is one of Joy, Love, and Hope. It can also be a time of new beginnings. As the year comes to a close, think about your finances and how you would like to improve them. If you are like the majority of Americans, there are two things on your wish list: less debt and more money.
While Santa Clause won’t come down the chimney and drop off a sack of cold hard cash, there are a few things you can do to make this wish come true. It won’t happen overnight, but if you work hard, it may just happen in time for next year’s Christmas. And that’s something to look forward to!
Debt is an ugly beast which can be incredibly difficult to slay – especially credit card debt, which can have interest rates over 30%. If you only make the minimum credit card payment, it will take you years to pay your debt. Here is how you can reduce your debt:
Analyze your situation. Make a list of all your sources of income and all your obligations. Then use this information to create a budget.
Stop generating new debt. Doubling your payments doesn’t do much good if you continue to add new debt. Cut up your credit cards and stop spending more than you earn.
Accelerate your debt payments. After you have a budget in place and you stop creating new debt by spending beyond your means, increase your debt payments to eliminate your debt more quickly. There are several ways to do this, but one of the most effective and most popular ways is the debt snowball, which was made popular by Dave Ramsey. To create a debt snowball you take extra money you earn and put it toward your debt. When you pay off one debt, continue using that money each month to pay other debts. Your debt payments will get larger over time which will eliminate your debt more quickly than if you were to pay only the minimums.
Earn More Money
Your ability to create income is your greatest asset, and because of this, you need to not only take care of it, you need to grow it! Why do you need to earn more money? Many reasons… How about debt repayment, keeping up with inflation, investing, saving for retirement, taking a vacation, no longer living paycheck to paycheck… need I go on?
OK, we know that earning more money is never a bad thing, but it is sometimes easier said than done. Here are a couple ways you can earn more money. Keep in mind, they may take some time and there is work involved, but anything worth having is worth working for.
Earn more money through your day job. Chances are most, if not all, of your income comes from your day job. That means you need to work to maintain your current income, and strive to improve it if possible.
- Ask for a raise. One of the best ways to get a raise is to simply ask for it. Make sure you do it the right way and go in prepared – have a list of accomplishments including how much money you earned for the company or saved the company.
- Professional certifications. Obtaining a professional certification can lead to increased income. Research which certifications are the best in your field and go after them.
- Change jobs. Sometimes the best way to get a raise is to go to another company. Consider it a bonus if your company pays for it.
Earn money through alternative income streams. I define alternative income as any money earned outside your normal day job. There a hundreds of ways to earn money outside of your normal routine, and earning a little side income can help you reach your financial goals more quickly and act as an insurance policy against losing your job or another main source of income.
Some ideas for alternative income include starting a side business, consulting, working a part time job, owning a rental property, owning dividend paying stocks and other investment income, working a part time or seasonal job, owning patents or receiving royalties, buying and selling items on Craigslist, Ebay, etc. With alternative income, you can use creative ways to generate more money. The limits are up to you and your imagination.
The 12 Days of Christmas – Personal Finance Style:
- Day 1 -The First Rule Of Personal Finance @ I’ve Paid For This Twice Already…
- Day 2 – Two Financial Goals – Less Debt, More Income @ Cash Money Life
- Day 3 – 3 New Year’s Worksheets @ Mrs. Micah
- Day 4 – 4 ways to be better prepared for Christmas next year @ Gather Little by Little
- Day 5 – 5 Golden Rules To Follow During The Holiday Season @ My Two Dollars
- Day 6 – 6 Ways To Give @ Moolanomy
- Day 7 – 7 Savings Strategies @ Being Frugal
- Day 8 – Eight Simple Snowflakes @ I’ve Paid For This Twice Already…
- Day 9 – 9 Year-End Money Moves @ Moolanomy
- Day 10 – 10 Personal Finance Essentials @ Cash Money Life
- Day 11 – the 11th day of Christmas: 11 ways to decorate more frugally @ Plonkee
- Day 12 – 12 Steps to a Prosperous New Year @ Being Frugal