You know the saying, “When you hit rock bottom the only way to go is back up.” I’m sure that this is where many of us begin our journey to becoming debt free. This is when you truly want to live a life with no more debt. What does rock bottom look like to you? Maybe you don’t really know how much money you owe in total because you are in denial about the whole thing. Every month you are making the same amount of money but you are short every single time. You are stressed out to the max that you are moody and snappy at everyone around you. Maybe you haven’t had a good night sleep in months because all you can think of is how you are going to pay all the bills. You wonder how the heck got to this point in the first place.
It seems so easy to get in these types of situations, yet so tough to get out of. That is why it takes drastic and radical changes to begin to dig yourself out of the hole that you created.
Here are 3 radical ways to dramatically reduce your debt.
1. Liquidate
Have you ever gone to a store liquidation sale? This is exactly what you need to do with your life. In this day and age, you have countless ways to try and sale items. If you have nicer items you can post on Ebay, apps like Poshmark, and even local Facebook groups. For everything else, you can have a huge garage sale and even try to sell to consignment shops too. Not only will this put major money in your pocket, but this will help clear the clutter from your life and give you more breathing room. Go through your house with the entire family. If you think you have a lot of “junk” guess again. Sometimes the junk is what other people are most interested in at garage sales. It’s worth a shot to try and sell everything you don’t need.
Many people even take drastic steps by selling their vehicle/s that are not paid of. Buying something cheap with cash and putting the extra toward their debt. Sounds pretty lame, until you realize you won’t have that huge care note hanging over your head every month, your car insurance will decrease too.
If you are really overwhelmed with your debt. Consider selling your home and get in a rental. See what your local housing market is doing. If you have been in your house for several years, you might have some equity built up. Even if you are paying a couple hundred less than your mortgage now you also won’t have to deal with house insurance and any maintenance issues that can put a dent in your monthly budget. If you downgrade to smaller square footage your utility bill can reduce drastically and other expense can decrease as well.
2. Cut Expenses to the Bone
Sit down and figure out all your bills you have for the month. What can be cut out? Cut cable completely or downgrade package, cut pest control maintenance. Monthly subscriptions are very popular. If you are signed up for several monthly subscriptions like razor clubs, IPSY, bark box, any magazine subscription, as well Netflix and Hulu. It’s time to cut them all. Even if they seem relatively inexpensive they do add up so serious cash. Don’t forget to cut out that gym membership as well.
If you have anything set up under a contract consider calling each of them and asking what the cancellation fee amount is. If it’s not worth to cancel and pay the fee ask them if you can drop your package deal to anything else less expensive until you can cancel. Call you credit cards to see if they can lower your interest rates. Lastly, this is also a great time to call your insurance company and shop around to see if you can get a better rate for home and car insurance rates.
Why do you want to cut all this out? Because you will be too busy doing step #3.
3. Bring in More Cash
After cutting out all items that you don’t need you’ve made a little bit of breathing room. Now, to really get the progress rolling you need to bring in more income. Many people opt for a second job or even start a profitable side business. Many people opt for a part time gig in the evenings and weekends like a grocery store, delivering pizza, clothing store, or a restaurant. If your family is keeping you from going out to the work force in the evenings and weekends you can also look into part time stay at home jobs. Just be sure to do your research before signing up for any jobs online. Make sure they are legit and that the company is legit. Also, keep in mind with some of these businesses the income is not immediate.
Another way to bring in more cash is to reduce your expenses. A classic way to do this is to refinance your debt. There are a number of reputable companies which might be able to help. A lot of these are pretty new, but they might be worth your time. Here is a short list.
Lending Tree – Is a loan “supermarket” type of exchange. The business pretty much links up borrowers and lenders in a single platform. Its bigger than most of the lenders out there and can offer loans for all needs and credit levels.
SoFi Loans – SoFi is a new company, but they’ve been sucking up a lot of business due to having good rates and a low fee model. These guys are definetly work checking out.
Above Loans – Above Loans is a totally new company, but they might be worth checking out to see if they are willing to offer you a below market rate.
Many times we try to look for quick fixes or to “cheat” our way through paying debt off faster. Yes, you can pay off debt fast, but it will be hard grueling work and require a lot of sacrifices. Not only sacrifice from you but from your family as well. Once you get some momentum and get the debt pay off rolling it will all be worth the sacrifice once you can live free from the shackles of debt.
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What about you? What is the most radical thing you’ve done to pay off debt?
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