Is It Worth Working 2 Jobs to Pay Off Debt?

It’s summertime, and I don’t know about you, but my family and I like spending time at the pool. I enjoy the sunshine and the cool feeling of the water on my skin. What I don’t like though is treading water, at all! I also don’t like when it feels like I am treading water financially. These days as we battle unprecedented inflation, it is easy to feel like your debt balances just aren’t budging. You may wonder if it is time to get a second job to repay that debt.

Getting a second job to pay off debt may be the right decision for you, but there are things to consider. Would working more hours to pay off your debt be worth it with the added stress and time it would take away from the things you currently enjoy doing? Would the additional payments towards your debt really accelerate your debt pay off like you are hoping? Alternatively, you might consider debt consolidation as a strategy to manage and simplify debt repayment. By consolidating high-interest debts into a lower-interest option or through personal loans, you could reduce overall interest costs and enhance your financial management process.

Understanding Your Debt Situation

Understanding your debt situation is crucial in determining the best course of action to pay off your debt. This section will guide you through the process of assessing your debt load, analyzing your current income, and determining your debt-to-income ratio.

Assess Your Debt Load

Assessing your debt load involves making a list of all your debts, including credit card debt, personal loans, and other financial obligations. You should include the balance, interest rate, and minimum monthly payment for each debt. This will give you a clear picture of your overall debt situation and help you prioritize your debts.

For example, let’s say you have the following debts:

• Credit card debt: $5,000 balance, 18% interest rate, $100 minimum monthly payment
• Personal loan: $10,000 balance, 6% interest rate, $200 minimum monthly payment
• Car loan: $20,000 balance, 4% interest rate, $300 minimum monthly payment

By listing out your debts in this manner, you can see which debts are costing you the most in interest and which ones you might want to tackle first.

Analyze Your Current Income

Analyzing your current income involves calculating how much money you have coming in each month. You should include all sources of income, including your primary job, second job, freelance or contract work, and any other regular income.

For example, let’s say you have the following income:

• Primary job: $4,000 per month
• Second job: $1,000 per month
• Freelance work: $500 per month

By understanding your total monthly income, you can better plan how much you can allocate towards debt repayment and other financial goals.

Determine the Debt-to-Income Ratio

Determining your debt-to-income ratio involves calculating how much of your income goes towards debt repayment each month. This will help you understand how much of a burden your debt is and whether you need to make adjustments to your budget.

To calculate your debt-to-income ratio, add up your minimum monthly debt payments and divide that number by your total monthly income.

For example, let’s say your minimum monthly debt payments are:

• Credit card debt: $100
• Personal loan: $200
• Car loan: $300

Total minimum monthly debt payments: $600

If your total monthly income is $5,500, your debt-to-income ratio would be:

$600 ÷ $5,500 = 0.11 or 11%

This means that 11% of your income goes towards debt repayment each month. Understanding this ratio can help you determine if you need to make changes to your spending or if taking on a second job is necessary to manage your debt more effectively.

There are many great benefits to getting a part-time job to reduce your debt. Besides the obvious advantage of extra income to put towards that debt reduction, there are other benefits too. 

Expanding your skills

When I was in sports, a coach once told me that an athlete who can do many things well is more valuable than an athlete who can only do one skill. As you take on a new role, you will learn more skills that you can add to your resume making you more competitive for future positions. 

Expanding your networks

We have all heard it before, it's not what you know but who you know. Getting to know more people and building relationships of trust with them allows you to build a better professional foundation. 

More financial flexibility

While working a second job to pay off the debt, you should have more income to work with. You can definitely use all of this income to pay off your debt aggressively, or you might choose to use a little of it to build your financial reserves. Additionally, some of the additional income from a second job can be used to build an emergency fund, which is crucial for covering unexpected expenses and achieving financial stability.

Get paid to do things you like

Getting a second part-time gig could be viewed as your “fun job”. Do you like painting? Search for opportunities at a  wine and paint studio. Like working out? Work at a gym. Often these places have great employee perks like a free gym membership. It's a win-win! 

Always remember getting a second job doesn't have to be permanent

Increasing your income to pay off your debt doesn't have to be a lifelong decision. It can be a temporary thing that is simply there to help aid in this chapter of your life. When we remember that this isn't a life sentence some of the hard things don't seem as hard. 

The cons of getting a second job

We all know that working more despite the added income isn't always butterflies and rainbows. There are of course some downsides to getting a part-time job to pay off your debt. 

Increased tax obligations

Depending on how much your household makes you may consider contacting a tax professional. Many times employers pay part-time employees with a 1099. That means you are responsible for all of your own taxes. You don't want to be surprised come tax time that you have a higher tax bill. 

Adjusting to a new environment

Change is hard and adjusting to a new environment is hard. The good news is that the “new-ness” always wears off eventually. 

With more money coming in you may be tempted to spend more

Naturally, as humans we want to spend what we have and when you get a second job to pay off your debt, you need to make sure that you are using that money to pay off your debt! Taking on additional work, such as a second job, can help save money on living expenses and alleviate financial pressure. If you don’t, then what is all the sacrifice really for?

Time and Energy Drain

Taking on a second job to pay off debt can be a significant time and energy drain. You’ll need to consider whether the extra income is worth the potential impact on your physical and mental health.

For example, let’s say you’re considering taking on a second job that requires you to work 20 hours per week. You’ll need to consider whether you have the energy and time to commit to this job, and whether it will impact your relationships with family and friends. Balancing multiple jobs can be exhausting, and it’s important to weigh the benefits of extra income against the potential strain on your well-being.

Reduced Quality of Life

Taking on a second job to pay off debt can also reduce your quality of life. You may have to cut back on activities you enjoy, such as hobbies or spending time with friends and family.

For example, let’s say you love playing music, but you have to cut back on your music lessons to take on a second job. You’ll need to consider whether the extra income is worth the impact on your quality of life. It’s essential to find a balance that allows you to pay off your debt faster without sacrificing the things that bring you joy and fulfillment.

By understanding your debt situation, you can make informed decisions about how to pay off your debt and improve your financial situation. Remember to consider the potential impact on your time, energy, and quality of life when deciding whether to take on a second job to pay off debt.

What kind of second job can help you earn more income to pay off debts?

Let's take a look at what kinds of work can help you increase your income to pay off your debt.

Find something in an area that you love

When you enjoy what you do your quality of life naturally improves. You are going to be happier going to work and you and going to perform better while you are there. Pretty soon it will feel like your debt is melting away!

Look for small businesses who are hiring

There are many small businesses that are looking for part-time help and usually they can only afford to pay a part time person so you make the ideal candidate! 

Find a schedule fit 

I get that some of us have tight schedules to work around but don't let that stop you from reaching your goal to pay off debt. There are lots of gig-type jobs that allow you to work on your own time. For example, you could drive for a ride-share service, deliver groceries, or watch dogs in your home.

If you are medically able, donate plasma 

Donating plasma is a great way to make some extra money while also helping another person who might critically need it. Do make sure you have checked in with your doctor before donating though. 

Take a personal inventory of your skills, abilities, and talents

Could you teach other people to play an instrument? Host a craft night where you can teach a new skill or technique. Teach others how to style their home or how to landscape their yard. 

If you don't want to be tied down to a specific company or schedule take a peek at different community pages online including those on craigslist (yes, they still exist) and Facebook. Often law firms are looking for panelists to participate in mock juries. Other industries may need people to help in case studies and focus groups. 

Check with your local medical or dental schools

These students are often required to find their own patients for their board exams and many are willing to pay good money for a person that qualifies. 

When you are looking for a second job to pay off debt there is no right or wrong answer. You do want to carefully consider your personal needs and the needs of your family. There are options for everyone who wants to make more money. 

Other strategies for paying off debts

Working a second job isn't the only answer to paying off your debt quickly. While additional income is helpful, check out these other strategies.

Create a comprehensive money plan.

Now, don't get your nerves in a ball thinking this needs to be hard or complicated. Actually, the more simple your plan is the more likely you are to follow it. You simply need to include all your income and expenses, even those that don't happen regularly. Take a look at not only your fixed expenses but also your flexible ones like groceries, entertainment, and gas. You should include your debt in this plan as well! Intentionally leaving parts of your financial situation out because it's easier to ignore only hurts you. 

Create a debt repayment calendar.

You can use resources like PowerPay to create a debt repayment plan. Not only is it free to use but it helps you know when you’ll be debt-free and how much interest you can save by using an accelerated repayment strategy. Understanding and managing interest payments can help you save money and pay off debt faster. Having a specific debt-free date can be incredibly motivating.

Consider hiring a certified financial professional like our Financial Guide team here at Your Money Line. 

Our Financial Guides don't sell participants a single thing. This ensures that their guidance has your best interest in mind. Our Guides help people every day who are trying to get out of debt and they can help you determine if working a second job to pay off debt makes sense for you or if there are other productive ways to get there. 

Personal Finance Is Personal

There are many ways to get from point A to point B. While there are many advantages to getting a second job to pay off debt there are also disadvantages. There's a reason we call this personal finance, it's personal! If you have a goal to be debt-free, getting a second job may be the answer but it doesn't have to be the only answer. Financial guides are ready to walk you through a personalized financial plan to help you reach your financial goals, whatever those may be!