Video: How a side hustle can help you pay down debt

 

When you need to pay off debt quickly, you can pray for a raise or increase your income independently – with a side hustle.

Whether it’s driving people around with Uber or Lyft, fixing people’s house problems as a TaskRabbit Tasker, or getting paid to complete projects through Fiverr, there is no shortage of side hustle opportunities you can start today.

Mimi Johnson, whose day job is in marketing in St. Louis, took a more daring route. She put thousands of dollars on her credit card to buy merchandise from a clothing brand that she now sells out of her house. She has been using social media to recruit customers so she can recoup her investment and pay down her debt.

“It was motivation to pay off bills and see what I was made of without a boss,” says Johnson.

But side hustles like Johnson’s are risky. By investing – in Johnson’s case, buying the clothing she hopes to sell – you could go into more debt if you don’t at least recoup your investment. And if you use a credit card, you could be paying high interest rates on that initial investment if you don’t quickly get back your money.

Instead, save up the money or wait for a tax return before investing in your new business. Also, do your research before spending a dime.

“With a side business, I would be a little wary of anyone who promises you are going to make a ton of money without a lot of work,” says Johnson.

Johnson has been working around the clock to get her side hustle off the ground and make sure that for every dollar she puts in, she gets two back.

“This is a full-time job, it really is,” she says.

If you do decide to work with a company that requires you to buy a product upfront, be certain that you are committed to making the sales needed to free you from debt.

See related: Tips and tools for setting up a side hustle to get out of debt, Q&A with David Carlson: How side hustles can erase debt

 


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Updated: 11-24-2017