Debt Sucks.

Not only does it suck to be in debt, but debt sucks away your hard-earned income too! Debt is constantly giving your income the vampire treatment, and it’s hard to do what you love as long as it’s around.

So you owe someone some money. Could be a student loan, could be a car, could be a credit card, could be your Uncle Jerry. Whatever it is, it’s debt and it sucks.

Today, I’m going to share 5 ways you can destroy debt for good and start living free, like you know you want to.

Predicate this whole discussion with the fact that if you want to live debt free, you’ll have to stop creating new debt – right now! You can’t fill in a hole you’re still digging.

Also vital to achieving debt-freedom is having a workable cash-flow outline (a budget, but cooler) so you know how much money you’ll be able to apply to your escape plan. Bonus points for having a small nest egg of around $500-$1,000 so you’re not tempted to open another credit account or call your Uncle Jerry when your new phone dies the week after the warranty expires…

Let’s go!

1. Work the “Snowball”

You’ve probably heard of this method, but I’ll do a brief recap:

  • List your debts smallest to largest by balance
  • Pay the minimums on all of them each month
  • Apply some extra money to the smallest one until it’s gone
  • Roll your payment from the one you just eliminated (the minimum payment plus the extra) into the next debt
  • Continue until victorious

Simple, popular, effective… but it can take a bit of time.

Also, where do you get the “extra” to pay each month? You could adjust your expenses, tap into the “latte factor,” request to work overtime, start a side hustle, or:

2. Sell Something

Take a look around your house, find something not vital to your life and list it for sale on Craigslist, E-Bay, VarageSale, Facebook, Instagram, whatever.

Dining room table hasn’t seen a meal in years and just gathers junk mail? Sell it!

Kitchen gadget you used to make that Pinterest recipe that one time? Sell it too!

Wardrobe items gathering dust? Cha-ching!

Anything that’s sitting around that someone will give you cash for, get it out the door! Use the money to pay something off.

You can always buy another one when you’re debt free, or discover you didn’t even need it in the first place.

Extreme version: sell your car and buy a cheap one with cash. Use the profit to slay some debt.

3. Share Expenses to Reduce Your Own

Have you ever thought of the things we’re “supposed to have” on our own but could be shared?

Things like tools: Lawn mowers, snow blowers, weed eaters, vacuum cleaners, or sewing machines. Handy to have, but you really only use it sporadically at best (am I right?) Sell yours, and borrow one from a friend or family member when you need it.

You might even have a tool library in your town where you can borrow a specific, expensive tool for a task instead of having to buy one yourself. It takes a little extra planning and communication, but it saves big money.

Other things like subscriptions can be split as well: magazines, newspapers, Netflix, Cell phone plans, dollar shave club, whatever. Get together with some friends or family and get on one single subscription plan – you’ll each chip in only a fraction of what you’d pay individually.

Share the savings and the benefits.

4. Get Extreme

When I had student loans, I shipped off to Alaska for a winter to work in a fish cannery. It was miserable, but I had no expenses, and made enough to pay off my whole debt (almost $7K) with money to spare in four months.

For a broke college kid that was something to write home about.

Depending on your situation, look into intensive, short-term seasonal jobs. It could be as hardcore as packing up and moving temporarily for jobs like commercial fishing or fish processing, fighting wild fires, or doing disaster relief and reconstruction. Or it could mean sticking closer to home and picking up some part-time work delivering packages around the holidays, driving a snowplow, driving a taxi, or doing roofing or landscaping.

Trade your sweat and tears for sweet, sweet freedom.

5. Negotiate

Sometimes it pays to ask for forgiveness.

Typical programs to forgive student loans take way too long – using these steps you can be free sooner than what they offer anyway!

But other debts like credit cards, or that $250 from Uncle Jerry you used to replace your phone, can be negotiated or settled.

There are lots of specific resources and scripts for negotiating a settlement out there, but I’ll let you know it can be an option. Just be sure to get a settlement statement in writing before sending money, and never let anyone have electronic access to your accounts (that includes sending personal checks) – send a cashier’s check / bank teller’s check or money order instead.

Also be aware that settled debt may have tax implications. Big amounts that are forgiven can count as “income” on your taxes. The IRS seems to think that earning an extra $5K and Capital One wiping $5K off your bill are the same.

Speaking of taxes:

Bonus: 6. Leverage Your Income Tax Refund

If you receive one, an income tax refund can be a powerful debt-crusher. Most people treat their refund as free money and spend it on something fun. The problem is, it was your money to begin with, the government just held onto it for you (you’re welcome).

Use any tax refund money to kick-start your snowball or smash one big debt for good. If you don’t receive a tax refund, like me, that’s OK. You can use any cash gifts you receive throughout the year as little hammers to chip away those debts.

Buy yourself the best gift – freedom – this tax season.

Summary

So there are five (or six) practical ways you can eliminate debt and start living free. What have you done to banish debt from your life? I’d love to hear your story in the comments.

What can you do with all your extra money when debt isn’t giving your income the vampire treatment? Whatever you want! It’s Yours! That’s a subject for another post 🙂

Until then, keep at it – freedom is just around the corner!

Until Next Time,
Do Brave Deeds and Endure!
– Ben


If you’re looking for a personalized way to eradicate the debt vampire, consider me your personal financial Van Helsing – complete with garlic, crosses, and wooden stakes! I’ll be your coach as we identify what’s most important to you and blast your debt and other financial obstacles out of your way. Click the button below to see what we can accomplish together.

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