Five Creative Tips for Dumping Debt

Would you love to tackle your debt, but just don’t see money in your budget?  It is time to think outside the box and become creative.

These ideas should help:

1. Use your tax refund.

How much refund did you get this year?  What did you do with it?  If your answer is that you got $3600 and you don’t know what you did with it, you have just found $300 a month to use on debt.  Change that W-4 and start using your money on debt reduction instead of loaning it to your Uncle Sam.

2. Use your “extra” checks.

If you get paid every two weeks, you are receiving three pay checks every sixth month.  If you are paid weekly, you will get five checks every third month.  Those extra checks equate to an entire month’s take home pay every year.  If, for example, you normally bring home $2400 every month, you can pay off an additional $2400 of debt a year by earmarking those “extra” checks for debt reduction.

3. Work an extra job or overtime.

If you could earn an extra $1,000 a month for two years, you will have paid off $24,000 of debt!

4. Downgrade your vehicle.

Selling a vehicle you owe $20,000 on and purchasing a $3,000 “beater” will reduce your debt by $17,000.

5. Tap your savings.

Ask yourself this question: “If I had zero savings and zero debt, would I borrow money to put into a savings account?”  Of course not!  But keeping that money in savings while you are struggling with debt is the same thing.  Hold back at least $1,000 for small emergencies, use the rest for debt reduction and then rebuild your savings once you are out of debt.

Conclusion

Getting out of debt is never easy.  However, once you set your mind to get it done, you will find creative ways to do so.

The key is to get started.  Today is a good day.  Go for it!

Today’s guest post is from: Joe Plemon, a retired engineer, financial counselor and blogger, lives in Southern Illinois with Janice, his wife of 39 years. Joe likes online Scrabble, St Louis Cardinal baseball, blues music, power naps, high school football, short term mission trips and Sunday family dinners. You can read more from Joe at Personal Finance by the Book.