This strategy only gets you to breakeven; not ahead of the financial curve.
Calculating Your Magic Number
Now let’s go back to a Net Income (take home) = $4,000
Total Expenses = $5,000.
You also have a debt = $10,000 and Savings = $0.
Your Plan: You agree to pay an additional $500 to the Credit Card debt and Save $300. That means:
Net Income (take home) = $4,000
New Total Expenses = $5,800 ($5,000 + 500 + 300)
Monthly Balance = -$1,800
So your Magic Number = $5,800 which is the amount of money you need to make to pay your expenses ($5,000) + Service your CC debt ($500) + Save ($300).
Now, you're $1,800 short of hitting your magic number (i.e., $4,000 income minus $5,800).
Option: So the first step is to see if you can reduce your expenses. Let’s say you reduce your expenses by $500 from $5,000 to $4,500. That means your New Magic Number is $5,300 ($5,800 - $500).
That means you’ll need to increase your income by $1,300 ($4,000 - $5,300) to hit your magic number.