Getting Out Of Debt (Part 2: Developing Your Income)

Continued from Getting Out of Debt (Part 1)

There isn’t anything profound or exceptionally brilliant about this approach to getting out of debt. In fact, that’s why I use this approach when I’m coaching my clients. In my experience, it’s better to keep things as simple as possible. There are so many tools and services out there that address this subject that it’s very easy to get confused or overwhelmed.

As I said in Part 1, getting out of debt requires changing your mindset and adopting new practices. This creates a powerful foundation for building wealth. My intention is to help people build this foundation without getting overwhelmed or discouraged with the process and giving up before they see results. I’ve had success keeping things simple and practical.

Where income is concerned, the point is to create a plan to develop your income and advance your financial position. By advancing your financial position, I mean changing the ratio of your income to your expenses so that you’re bringing in more and paying out less. Buying lottery tickets and hoping to win big does not constitute a plan for developing your income. This is because winning the lottery is not something you can cause through your own actions. By contrast, a solid, practical plan for developing your income might include taking steps to acquire a higher paying job, creating passive income streams, making an organized effort to obtain a pay raise in your current job, or finding part-time or temporary work you can do on the side to supplement your income. All of these ideas are directions you can pursue through your own actions.

Your plan will depend on your specific needs, skills, and circumstances. Start by identifying one or more potential directions for developing your income. Let’s use “acquiring a higher paying job� as an example. The next step is to brainstorm a list of all the possible actions you could take to move in this direction. Consider the example below:

Direction: Acquire a higher paying job

List of possible actions:

• Search online job directories for openings in my field
• Send resumes to potential leads
• Talk to Frank at ABC company
• Update my resume
• Call my friends and let them know I’m looking for a new job
• Send resumes to companies I’d like to work for
• Call HR managers in companies I’d like to work for to see if there are any job openings
• Register with a staffing agency
• Contact a recruiter

The next step is to take your list of possible actions and start turning each viable action into a specific, measurable result. A successful plan must include specific, measurable results that you will accomplish within a given time frame. Specific, measurable results are results that can be measured and clearly observed when they’re produced. “Sending out resumes� for instance, is not a specific, measurable result. “Send out 15 resumes by January 1st� however, is.

Specific measurable results:

• Spend 30 minutes each day searching online job directories for openings in my field
• Call Frank at ABC company by 3pm on Thursday 11/23
• Update my resume by 11/10
• Send out 15 resumes by 11/17
• Call 1 new friend each day to let them know I’m looking for a new job
• Collect 3 new leads each week from these conversations
• Make a list of companies I’d like to work for by 11/10
• Send a resume to each of these companies by 11/17
• Call each of these companies to follow up 11/24
• Contact a recruiter by 11/20

Take all of these results and put them in your calendar, date book, Outlook, or whatever you use to keep track of your time. You now have a plan for moving in the direction of “acquiring a higher paying job�.

This example is very simple and generic, but hopefully it gives you some idea of how to get started. Any direction you choose to pursue in order to develop your income can be turned into a solid, simple, practical plan by following these steps. Depending on the direction(s) you choose, your actions and specific measurable results may vary quite a bit from those I used in the example above. This post is meant to provide a framework for the process of getting out of debt as opposed to a list of actions that address specific circumstances. If you find yourself stuck in the process, or unsure of how to apply this framework to your specific situation, please feel free to contact me (Doctor Dot-Connector) for coaching or clarification.

I could get much more specific about this and other planning processes. In fact, I could (and probably will) write a whole series of articles on planning alone, but right now it’s the basics that are important:

• Identify one or more directions you can pursue through your own actions in order to develop your income
• For each direction you identify, brainstorm a list of possible actions you could take to move in that direction
• Turn the viable actions into specific, measurable results
• Put all of the specific measurable results into your calendar

The next thing I’m going to say is so obvious that it should go without saying, which is why I will say it. Do all of the things you planned to do, when you planned to do them. I’ll say it again in a different way in case I wasn’t clear the first time. Take all of the actions you planned to take, when you planned to take them. No matter how brilliant your plan is, its effectiveness is limited by the extent of the actions you take (or don’t take). Advancing your financial position requires planned, consistent, and effective action.

This post will be continued in Getting Out of Debt (Part 3: Reducing Expenses)

getting out of debt

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