My parents taught me a healthy fear of debt. I still remember the day they paid off their mortgage. They also drove decade-old vehicles to avoid car payments. Their financial frugality has helped me as an adult to live within my means. My husband and I have managed to avoid the credit card debt that has plagued some of our friends. He often did calculations to see whether it was cheaper for us to rent or own our home (and thus we spent the first 7 years of marriage as renters). If you are struggling with money problems, here are some creative ways to overcome debt.
Debt Relief is Integral to Personal Independence
If you really want to be free, you can’t have financial chains holding you down. What costs do you have on a regular basis? Do you pay for your smartphone and internet services? How about your car and your home? Is student loan debt holding you down? What about credit card debt?
All these things can be overcome with time and effort. However, you’re going to need to be strategic and prioritize. Your first step is to stop spending money unnecessarily. If you’re financing a car and furniture and have a mortgage and credit card debt, something’s got to give.
Realistically, you can cut all those costs. Sell the car you’ve financed and turn the money into an older vehicle for a few years. Why act like you have money when you don’t? Instead, work yourself up to the level you want to be at legitimately, rather than trying to keep up with the Joneses.
Get Rid of the Mortgage
If you’ve got a mortgage, you will be able to get some money back by selling your home. This can be turned into a rental situation or a smaller, more affordable home. Sometimes you’re paying for too much property. If you’re really deep in debt, consider selling your mortgage.
You may have enough from the sale to buy a much smaller home for a fraction of the cost. Moving into a condo or changing neighbourhoods may be a way to save money on housing. You can also get a really decent motorhome, putter around the country, live rent free, and save money while you go. There are options available, and you likely don’t need to spend what you’re spending.
If you had a $1,000 mortgage you’d been paying into for two years in conjunction with a $300 car payment you’ve been paying for about the same amount of time, then you just saved yourself $15,600 a year. You’ll also have additional money from the sales of either car or home. You can turn that money into paying off credit card debt and student loans.
Within a few years years, you may find you’re entirely debt free, and able to finance a home with a reasonable mortgage that puts the full property in your hands much more quickly than you would have been able to acquire it otherwise.
Strategies to Overcome Debt
If you want debt relief, you may want to check out DebtAcademy.com, which offers an “expansive collection of data and debt management resources. The journey toward a debt-free life can be long, but … expert advice and strategies [can help] to keep you on track.”
Sites like these can give you ideas that help you build a debt relief strategy which fits in with your life. Additionally, it may be worth considering that some debts are just too big to handle on your own. Crowdsourcing can sometimes help. One fine crowdsourcing solution is Plumfund, which provides the “lowest fees and free crowdfunding options since 2006.”
If you’ve got a dire enough situation—like terrible debt even more deeply undermined through injury and subsequent medical bills—you could very well find a sympathetic crowd to fund you.
Additional ways to overcome debt involve income supplementation and obscure jobs. Be creative in considering your talents and additional ways you can earn money to pay off your debts. The bottom line is, you can get out of debt and stay out; it just may take some effort.
What have you done to overcome debt? Do you have tips to share that worked for you?
This is a guest post written for the Koala Mom; all opinions remain the writer’s. I am not a financial adviser and recommend seeking professional advice if you are struggling with serious debt. Visiting 7wealth.com.au and getting in contact with a financial adviser would definitely be recommended if you are unsure of how to manage your finances and effectively get out of debt without getting rid of your most precious belongings.