Famed celebrity photographer Annie Leibovitz became the latest poster child for money mismanagement when her creditors sued her over a $24-million (U.S.) loan. Ms. Leibovitz had been living well beyond her means, buying townhomes in Greenwich Village and extensively renovating them. To pay off the debt, she is now selling 10 limited-edition photograph collections, the New York Times reported. At $3.5-million each, she's on track to clear the loan in short order.
Ms. Leibovitz's money troubles carry some important financial lessons. The obvious one is that no matter how well-off you might be, you need to carefully manage your budget. The lesson that struck me, though, is that lowering household debt isn't necessarily about cutting expenses - it's also about finding ways to boost your family's income.
Very few of us have a body of work that can generate cash on the scale of Ms. Leibovitz's photography catalogue, but there are many ways to grow your earnings. If you're set to greet the New Year with more holiday debt than you'd care to admit, here are some money-making schemes that could pay it off.
A special thanks to my friend Jodi, a married mother of one who has mastered the art of sideline income, for sharing her ideas.
Host an exchange student: If you're willing to open your home up to a guest, hosting an exchange student is a simple way to earn more. Jodi hosted a Spanish student that she found through Canada Linc, a website that connects international students who wish to learn English with families in Canada. The one-month exchange program compensated Jodi for room and board, paying her $550 (the rates may vary by city). "It was also a fabulous opportunity to get to learn some words in another language and learn about the cuisine and customs from another culture," Jodi says.
Rent a room: If you have an extra room in your house or apartment, it can do more for you than collect dust and store old furniture. Homes located near universities or close to transit lines will easily pique renters' interests. Jodi recently rented a room in her home to a university student who was doing a four-month co-op term in her city. "We rented the room with furniture provided out for $425 but probably could have gotten closer to $500 per month," she says.
Offer a service: This will require more of an investment of your time, but consider offering your services as a tutor, babysitter, or dog-walker. I have several friends that have added tutoring to their after-work schedules and there is never a shortage of students, or their parents, happy to pay for help. If you are handy with a toolset, post your services as a small repairs person on a local classifieds website such as Kijiji or Craigslist. Think about other skills you have that may be valuable to others. Can you teach basic computer skills or organize closets?
Take an odd job: There are odd - literally strange - jobs out there than many of us don't realize exist. Donna Freedman, a freelance writer in Washington state, has often made ends meet by giving blood and acting as a mystery shopper. "They're a good complement to a regular day job, but they don't eat up all your free time. You can take as few or as many as you're comfortable doing," she wrote in an article in MSN Money. Her most lucrative gigs are as a medical test subject, which she finds by searching through newspapers and college bulletin boards. Just take care to carefully research odd job offers to confirm they're authentic and not a scam.