Debt is similar to a mountain that has to be conquered. It takes resolve, determination, willpower, and purpose. There are stories of inspiration all over the internet about people young and old who have managed to pay off debt. Achieving this goal is no small task and they have probably cut corners everywhere they could. There are other options than becoming frugal. That is only going to take so much out of your debt, anyways. Let us try to get a little creative here…
Pay off Debt with Extra Money
Extra money can mean accelerated debt reduction. There is no better way to pay off debt faster than more money in the household. Ask for a raise; get a second job or a side job. Anything that will put money in your hand to shove toward that debt will do.
Pay off Debt through Consolidation
Consolidation of everything you are paying off is much better than paying everything separately at different interest rates. Find a lower-interest rate consolidation loan and make one payment. This makes it much easier to pay off debt and allows you to push more money at the balance.
Pay off Debt by Prioritizing
This one is simple but often overlooked because it sounds so much like a budget. People cringe at the word budget. Probably because it means “allowance,” and takes us back to our childhood. However, when we prioritize our financial situation and what we purchase, we need to be able to put a value to what that purchase adds to our lives in order to determine if it is worth it. If the purchase is not “worth it” or adds no real value to our lives then the money would better be spent going to pay off debt.
Pay off Debt by Frugal Grocery Shopping
It really does not sound like such a big deal until you look at what you throw away. Try this for a month and I promise, you will look at this a little differently. Do your grocery shopping as you usually do for the month. If you go Daily, every few days, weekly, every two weeks, pick things up here and there, whatever. The only thing you are not allowed to do is throw anything away. If you do, you have to write down on a list how much it cost and place it in a central area where you can find it at month’s end. At the end of the month, clean out your refrigerator, freezer, and cupboards of anything that you opened and has gone bad and write down how much it cost. Add that together and multiply by 12 months. That is roughly what you waste a year in groceries. That could be going to pay off debt.
Pay off Debt by Selling Things
A job borne from some craft you like to do in your spare time to selling something you no longer use is a good place to start. You can sell college books online, too. A few places you can sell are eBay, Amazon, Etsy, and Craigslist. Tophatter is an auction site that will take multiples of an item for crafters. You would be surprised what kind of money your things could bring in to pay off debt.
Pay off debt by Snowballing Payments
Credit cards are the worst in paying off debt and the best to build credit. Many of us have dug ourselves a hole with credit cards alone. This isn’t the simplest way to pay off debt, but it is effective and builds credit, too. An example would be if you had three credit cards at different percentage rates. Card A at 7%, Card B at 12.5% and Card C at 26%. Each card has $1,000.00 on them. The minimum payment is $90.00 on each. You make a minimum payment on Cards A and B and double the payment on Card C ($180). You do this every month until Card C is paid off. Now take the money that you were using to pay off Card C and add it to Card B’s minimum payment ($90+$180). You are now paying Card A at $90 and Card B at $270 a month. When card B is paid off take the $270 and apply it to Card A ($90+$270). You are now paying $360 on Card A and should be about done making payments to pay off debt. It does take willpower when you think that you could use that extra money elsewhere or be tempted to use a credit card, but when you get a credit card paid off, it is a victory.
[Read: Knowing When to Pay off Debt]
Pay off Debt by Cashing out Savings
It is almost ingrained in everyone’s head whoever went to a financial seminar that you should have a savings account equal to six months or more of your income for emergencies. When you look at how much your savings account is drawing in interest against your debts interest, it should make it a little easier to let go of the savings account. Once you pay off debt, there is no reason why you cannot start saving again.