Are you in debt and need help paying it off? We will reveal 10 ways you can increase your income which could help pay your debts.
Paying your debts can be a stressful experience. There are various debt plans in place that can help you clear your debts. Before you start researching into what an IVA is or is debt consolidation the best option for you, have you considered that you might be eligible for additional income to help with your debt problem?
There is no magic formula and unfortunately no magic money tree. Instead, we will show you 10 practical savvy saving methods to help you get out of debt.
So, let’s make a start…
- Can I claim benefits?
Did you know that you might be able to claim benefits if you come under the following groups?
- On a low income
- Looking for work
- Sick or disabled
- A carer
- A parent or guardian
Compile all your income information
Before you find out whether you are eligible you will need information about your savings, income, pension, childcare payments and any other benefits you or your partner may get. Download our handy budget planner and start inputting all that information.
Then find out which benefits can be offered to you and how you can apply. Turn2us website can give you additional information on this.
- Am I being paid the right wage?
When you are struggling for money, a good place to start is your wage.
Check income for errors
Quite often people don’t realise but an income that fluctuates weekly is likely to have payment errors. A good idea would be to do a reconciliation of your wages as they come into your bank account and see if they match how much work you have done.
Over-worked and underpaid?
Quite often we fall into the trap of working overtime and not getting paid. Although, it is fine to do this as a one-off, ‘time is money’ so make sure you aren’t being exploited and understand your working regulations. If you feel you are being underpaid then speak up. You may be entitled to some extra income.
Minimum wage regulations
If you are on a national minimum wage, check the National Minimum Wage calculator on the GOV.UK website and to see whether you are being paid the right amount. If you aren’t then it is time to have an informal chat with your employer to get things resolved.
- Am I paying the right tax?
Did you know you don’t have to pay tax on everything you earn? You can earn an amount that is tax-free that is known as your ‘personal allowance’.
With restrictions being lifted due to lockdown, there has been an influx of people getting married. Spending for your big day can already cause a pinch in your pocket so it is essential to know that you can claim for Marriage Allowance. You will need to check if you are eligible to do so but your allowance lets you transfer some of your Personal Allowance to your partner which means they can save on the tax they pay. Also, know your rights on what happens to you when you split up and have a joint account.
Tax concessions can also be made if you are registered blind as you can earn an extra amount tax-free on top of your Personal Allowance.
Essential Costs for Work
If you spend your money on things that are essential to your job, such as special clothing, membership bodies or tools for your job then again this can add extra weight to your income.
- Can I get tax back if I have lost my job?
You might be able to get some tax back while you were working, which is known as a ‘tax refund or rebate’. This is also the case if you lost your job part way through the year and were paying tax through PAYE.
If you have been working at a job for more than two years, then you are usually eligible for redundancy pay. Ensure you know how much you should be getting. Calculations are based on how long you have worked for and what age band you fall into.
- Can I get income help if I have children?
Free School Meals
School supplies can be costly. Once you have added up the school uniform (I have lost count of the number of times my daughter has misplaced her school cardigan), budgeting for meals is where the hardship occurs. Instead of struggling, check as you may be able to get help with your child’s school costs such as free school meals.
For people with older children, who are working but living in the same house, it might be worthwhile asking them for the board. Not only will this offer extra income to add to your budget but also teach your children to respect money and spend it wisely.
- Can I get help with my energy bills?
You might be able to get grants and, benefits or other help from the government. If you were born on or before 5 November 1953, you could be eligible for a ‘Winter Fuel Allowance’, which range between £100-£300.
If your debt is with an energy supplier then you might be able to get a grant from a charitable trust. Some energy companies also offer grants for everyone and some solely for their customers. Speak to your energy supplier to see how they can help.
You might also be eligible for a discount on your electricity bill under the Warm Home Discount Scheme.
- Can I get help from my local council?
If you are on certain benefits you may be able to get vouchers on help paying for essential items like fuel or food. You can usually apply for help if you fall into the following categories:
- income-based Employment and Support Allowance
- income-related Jobseeker’s Allowance
- Pension Credit
- Universal Credit
- Can I earn extra money from another job?
Get an additional job
Like I said previously ‘time is money.’ If you are determined to get yourself out of debt, then you might want to consider getting an additional job.
Ask for more hours
You could try to ask for more hours at work. The pandemic in some industries has often meant that some staff have had to isolate themselves. See if there is an opportunity to cover those hours or demand in that industry. You will be surprised by how much an extra hour or two can benefit your income status.
However, take into consideration that adding an extra hour could increase other costs such as childcare and be careful it does not move you into a higher rate tax band.
- Can I get extra income if I rent out a room in my house?
If you have a spare room, you might contemplate renting out a room as a source of income. Allowing a stranger to live in your home could be a daunting prospect but consider the fact that if you do opt for the Rent a Room Scheme, this allows you to earn £7,500 a year tax-free.
- Can claim I cashback on my spending?
Online shopping can be a money saver
If you tend to spend money online, being in debt doesn’t mean you can’t spend on anything. Instead, try and be a little frugal. Essential items such as groceries can be such a huge cost. It was estimated that many of us are struggling to pay for our essential costs, so every little bit of cash can help towards financial freedom.
Cash in and see the results
Certain cashback websites can offer you £2.50 for every £40 to spend on home deliveries. Have a look back at what your monthly spend on groceries. £2.50 might not seem like a big amount but if you spend this amount on your weekly shopping bill and multiply by 52 weeks, you are already making a cashback saving of £130 per year.
The Results Speak for Themselves
Once you have gone through the different ways of increasing your income, revaluate your budget plan, and see how much better off you can be by making those small changes. The extra income might not be enough to help pay all your debts but be proud of your achievements.
Time to Take the Big Step
The next big step is to do your research to find out which debt plan will suit your financial needs. Look at some of the options available below:
To find out more visit our Debt Plan section.