Creative Ways to Overcome Debt

My parents taught me a healthy dislike 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. If you are struggling with money problems, here are some creative ways to overcome debt.

Creative Ways to Overcome Debt

Debt Relief = 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 along 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. You’ll be 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.

Creative Ways to Overcome Debt

Strategies to Overcome Debt

Compile your bills and paystubs for the past 3 – 6 months. You can either use a spreadsheet or a pen-and-paper, but it’s handy to start your deb-free journey with an idea about where you are spending your money. You can then look at what are fixed expenses (utilities, mortgage) and what are optional expenses (restaurants, Netflix). Look first at your optional expenses, and try to avoid spending more money than you can. Then look at your fixed expenses, and see if there are ways to cut down on those (such as those already suggested).

If you have several different debts (student loans, car payments, credit card debt), you may find it helpful to consolidate your debt to pay them all off. You may be able to get a better interest rate than you are currently paying. If not, work at paying the debt with the highest interest first (usually your credit card debt).

You can also work on ways to earn extra money to pay off the debt. Maybe you can pick up another part-time job or work overtime at your current job. You may even be able to earn extra money in your free time, using apps on your phone.

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.

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One Response

  1. Melanie stiksma October 7, 2017

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