How To Free Up Funds For Debt Payment

yard sale get out of debtYou made a resolution to get out of debt.  Where you find the money is sometimes easier said than done.

One of the most popular New Year’s resolutions is to get out of debt.  The ball drops in Times Square and we all promise ourselves to be debt-free by the time we sing Auld Lang Syne next time around.

We can cut up the credit cards, freeze them in a block of ice, or just shut down the accounts entirely.  But to bring down the debt, we’ve got to find the money to pay it off.  Here are some ideas.

Hold A Yard Sale

You’ve got a ton of crap laying around the house, and it’s not doing anyone any good.  If you’re like me, you may have  drawer filled with old electronics that have been the victims of upgrades over the years.  Dust it off, mark it for sale at $1, and put it on the front lawn next weekend.  Print up some flyers to place around town and you’ll soon have people pulling out their wallets for you.

Take all of the proceeds – every dime – and send it to a credit card company.

Leverage The Gift Card

People get gift cards for the holidays.  Sometimes, the retailer isn’t one the recipient likes, so they look to convert those gift cards to cash.  If there’s a particular retailer you patronize, look for some gift cards at a discount.  Sites such as eBay, Cardpool and Plastic Jungle sell cards at a discount.

Once you’ve scored a deal, take the savings and send it to a credit card company.

Avoid The ATM

Sometimes it feels as if there’s a hole in your pocket, draining your hard-earned cash when you’re not paying attention.  Part of the reason is that it’s too easy to get cash.  ATMs are everywhere, giving money at the touch of a button.

Rather than hitting up the ATM every few days, decide in advance how much cash you’ll budget for your week.  Make a single trip to the ATM, then stash the card in your sock drawer until next week.

You’ll find that there’s often a significant amount of money left over in the bank account at the end of the month.  Guess what to do with it?  That’s right – send it to your credit card company.

Pay Debts When You Get Paid

Credit card bills are due once a month, but there’s no reason to pay on that schedule.  Instead, send money every time you get paid.  That will keep the interest from piling up, and help you keep your finances in line with reality.

Cut The Cable Cord

Remember when television was free, way back in the 1970s?  Now we spend hundreds of dollars every month for the privilege of watching Honey Boo Boo.  Get rid of your cable or satellite service and opt for a streaming service such as Netflix.  An even better idea is to get Amazon Prime – you’ll save money on shipping from Amazon and get free streaming movies and television shows.

Send that extra $150 to the credit card company.

Get A Second Job

I mention this because if I don’t then I’m going to incur the wrath of every person who listens to Dave Ramsey and thinks the whole, “deliver pizza at night,” thing is a viable option.

In reality, I think it’s out of reach of many people.  If you work during the day and have a family to care for, you’re wiped out at night.  Better to get a decent night’s sleep than to run around until midnight for Papa John’s.

Not to mention that the recession left lots of people out of work.  Getting a job delivering pizza isn’t as easy as it once was.

Think Expansively

Every dollar you spend should be need-based rather than want-based.  If you need to spend the money – and I do mean, really need to spend it – then by all means do so.  But there’s no need for a new flat-panel television in the kitchen so you can watch while you chop carrots.  And there’s no need for that slick new smartphone or more apps if you’re serious about getting out of debt.

Spend smart, save smart, and understand that this is a long-term plan.  You didn’t get into debt overnight, and you won’t be debt-free by the time the sun rises.

Image credit:   Bsivad

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About the Author:

I've been a consumer protection lawyer since 1995, working to help people end their bill problems. I'm a faculty member at the Student Loan Law Workshop, a nationally recognized speaker, and a long-time member of both the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.