What’s the craziest, silliest thing you ever did to pay off debt ? Well me personally? You’ll probably laugh at this one but hey I’m debt FREE! And I’m going to share it anyway.
I’m seriously terrified of being in debt. Like seriously, seriously.
Growing up, I was told by one of my aunts if you can’t buy things cash don’t buy them, you don’t need them. I took her philosophy seriously and I’ve done my best to stay out of debt as much as possible but, few years ago my husband and I were $47,000.00 in debt, we did everything in power to pay off our debt quick. It took us three to four years just on his income, one of the craziest things I did was collecting pennies, my mom would have a small bucket ready for me at least twice a month, those pennies were worth anywhere from $15 to $40 each time, I also picked up every penny I saw lying on the ground. It was crazy but our debt was getting paid.
Maybe you’re in debt today, it doesn’t matter how big or small, here are some tips of other things we did that might help you.
Step One – Get Together A List Of Every Debt You Have
The first step to pay off your is to know every debt you owe. This can be a bit overwhelming, but it is a necessary first step.
We started by pulling our free credit report from AnnualCreditReport.com, the only place where you get 100% free credit reports as authorized by federal law. You can pull your credit report from all three bureaus if you wish or you can simply pull one report from each bureau every 4 months if you want to monitor your credit for fraud. Either way, you’re entitled to one report from each bureau (Experian, Transunion and Equifax) per year.
This report will show you a list of all of the debts that you owe other than loans from friends and family. The balances owed may be a month off if your creditor hasn’t reported your most recent payment, but it will give you the big picture of who you owe money to.
Once you have this list of who you owe money to, it’s time to dig deeper to get the rest of the information you’ll need.
Step Two – Find Out Everything About The Debts You Owe
Now that you have a list of who you owe money to, it’s time to figure out everything else about your debt. Here’s a list of what you’ll need to know about every debt you owe:
- Exact amount you owe
- Payment amount
- Frequency of payment (monthly, quarterly, etc)
- How many payments left (if fixed term debt such as a mortgage, student loan or car loan)
- Interest rate and whether it is fixed or variable
- If variable, what the rate is based on (prime rate, LIBOR, etc)
- Due dates
- Grace period (if applicable)
Where do you get this information? To find out how much you owe, check your most recent statements.
For everything else, you’ll need to do a little bit of digging. For loans, check the loan documents you signed. If you can’t find the loan documents, try calling the creditor or log in to their website and check your account details.
For credit cards, check the terms you agreed to when you signed up for the card. You may also be able to find this information online after you log in to your account on the credit card’s website. If you’re having trouble understanding the terms, call the number on the back of your credit card. A representative will be more than happy to help you.
Step Three – Assess Your Debt Situation
It’s time to look at the big picture now that you’ve figured out all the details on every debt you owe. It probably won’t be fun and it could be just plain ugly, but you have to do it to move forward.
First, add up the total amount of debt you owe. The number may be scary but we’re going to work on knocking it down, so don’t worry too much yet.
Next, take the amount of all of your monthly payments and add them up. This the minimum amount of money that you owe on your debt every month. Again, this can be overwhelming, but you’ll be able to knock this down as you pay off your debts one at a time.
Step Four Choose a Debt Pay-Off Plan
There are a few different debt pay off plans you can choose from.
The snowball method requires you to list your debts from smallest to largest and pay them off in that order. You pay all of your minimum payments and throw everything else toward the smallest bill. This is a great method for anyone looking for instant motivation and is the method I used when I had credit card debt.
Check out The Total Money Makeover by Dave Ramsey
The second method is the debt avalanche. With this method you’re paying off your debts from largest to smallest interest rate, therefore saving money over the long run. (You’re still making minimum payments on everything else.)
There is no right or wrong way to go. The method you choose will depend upon your personality.
Step Five Trow Extra Cash at Your Debt When Possible
Chances are sometime in the year you will get a bonus or a raise or at the very least a tax refund. When you do, don’t spend it. Use it to pay off debt.
The tax refund is easy. Just use the entire thing to pay off a credit card or apply to student loans. The same goes for any bonus you may receive at work. Often, these come during the holidays, so don’t be tempted to spend the money on gifts.
Chances are everyone in your life already has everything they truly need.
As for a raise, have the extra money immediately put in another bank account. You can then dip into this money every few months and use it as a lump sum to pay off debt. If you do it this way, you’ll never miss the money in the first place.
Step Six Have a Garage Sale
Most people have houses or apartments full of unwanted or unneeded items. Now is a great time to sell them. Whether you want to throw them up on Ebay or Craig’s list or have a yard sale, get them out of your house and free up some room. You’ll also end up with extra cash in your pocket that you can use to pay off your debt. When it comes to how to pay off debt quickly, this is one of the easiest ways. If you don’t think you have anything to sell, look again.
Also, don’t forget that one person’s trash is another person’s treasure, so don’t assume no one would want to give you money for that ugly Christmas sweater or that vase you got as a wedding gift ten years ago from Aunt Judy that you’ve always hated.
Step Seven Find an Extra Job
This is absolutely fine I’m sure you are busy enough but don’t dismiss this idea your goal is to get out of debt and get your peace of mind. Even a few hours a week can provide you with a decent amount of cash to use to pay off debt, and when it comes to how to pay off debt quickly, sometimes we have to do things we don’t really want to do.
If you use all of this second income to pay your debt, you’ll see a huge difference quickly.
Make sure this second job is something that is stress-free. This is especially important if you have a stressful full-time job. The job doesn’t need to be glamorous and while you might not love it, just keep in mind that a little short-term extra work will pay off big sooner than you realize.
Step Eight Work Overtime
If you have decided one job is plenty, thank you very much, then instead of finding a second one or creating one for yourself, check with your employer to find out if you can get some overtime work.
The advantage here is you already work there and you know the lay of the land, so to speak. If your company is short handed, then they will be thrilled to help you out and might even give you a raise in the long run for being a team player.
Step Nine Start a Side Business
While this is related to a second job, in my humble opinion it is a little better because you’ll be working for yourself. When a lot of people think of a side hustle they think of working online and that’s certainly an option.
However, if you’re not the kind of person that is tech savvy or you don’t like to write, then don’t forget about everything you can do offline.
For example, you can make money doing almost anything. You can mow lawns, deliver groceries, clean houses, the list is endless. The great thing about this is you can choose your own hours and how much you
Step Ten Don’t Forget to Get Creative and Enjoy Your Debt FREE Life.
Have some creativity, chances are you’re good at something. If you work on your craft and get creative you will achieve your dream of living a debt free life. Op out from receiving offers in your mailbox
Nothing is more annoying than pulling up to your mailbox after a long day of work and finding it filled to the brim with junk mail credit card offers. Every day, credit card companies fill up our mailboxes with needless junk that is immediately rerouted to the shredder or trash can. But here’s great news: You can make them stop! It’s actually very easy to stop receiving unsolicited junk mail credit card offers. All you need to do is visit optoutprescreen.com, type in your information, and you’ll stop receiving these offers for five years. Or, if you use traditional mail to send in the form, you can opt out for 10 years.
It’s simple. No more credit card junk mail for you, no more wasted time for your mailman, and no more overheated shredders and filled-to-the-brim trash cans.
Don’t forget to live within or bellow your means, this is so important not just while you’re on your debt free journey but always. That’s how you’ll be able to enjoy peace of mind and even build wealth.
What’s been the craziest thing you’ve done to pay off debt?
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