- Personal Finance»
- Debt & Bankruptcy
5 Big Things To Give Up To Get Out of Debt
Do you want to get out of debt? Many people will answer yes to that question. Are you willing to make some big sacrifices in order to achieve that goal? A lot of people aren’t willing to do what they really need to do if they want to get out of debt quickly. That’s because it can mean giving up some really big things in your life, at least for a time being until you’ve gotten your debt under control. It’s tough to make those sacrifices but it can be so worth it to get you out from under the thumb of a large sum of debt.
If you’re willing to make some sacrifices, here are the five biggest things that you will need to give up:
1. Your free time. The number one biggest thing that you can sacrifice if you want to get out of debt quickly is your free time. That’s because you can then use that time to earn additional income that you can put towards your debt. This may mean taking on extra hours at existing job if that’s an opportunity that is available to you. Working those overtime shifts can bring in a lot of money quickly in many industries. Another option would be to get a second job, either part-time or full-time, and to use that additional money to pay off debts. Yet another option is to spend your free time launching a moneymaking endeavor of your own such as learning to write and sell eBooks. Many people choose this last option because it allows them to earn additional money while doing something that they actually enjoy. A bonus of giving up your free time to get out of debt is that when you’re working you aren’t spending money on entertainment and therefore your savings adds up even more quickly.
2. Your house or a portion of your house. Sit down and look at your monthly expenses. Where does the most money go each month? For most people it’s to their home mortgage costs or their rent. If you can significantly reduce the amount of money that you are spending on your home then you can rapidly pay down your debt. Some of the options for doing this include:
o Moving to a smaller home. Too many people live in homes that are larger and costlier than what they need to live in. If you’re willing to move to a smaller space then you may save yourself a lot of money. If you have a lot of debt that it’s going to take a long time to pay off then this long-term plan can be a smart way to go.
o Moving to a cheaper location. Relocating is another great long-term options for savings.
o Moving back in with Mom and Dad. If you are young and already in trouble with a lot of debt then this may be an option to consider until you can get your money straightened out and get back on your own two financial feet.
o Renting out a portion of your home. You may not need to move or to give up your entire home in order to save money. You may only need to sacrifice a portion of your home in order to get some income coming in from renting out. You could rent out a room to a boarder. You could rent it out occasionally to visitors through programs like AirBnB. You could share your home with roommates. You could rent out your garage or storage areas for a small monthly income.
Note that some of these options may be combined with one another. For example, if you have an adult child who is also in debt then you may allow them to move back in with you for a low rent price. They give up their home in order to save money and put it towards their debt. You get a little bit of rent for giving up their old room to them and can use that to pay down your own debt. It’s a great way for families to help each other out when everyone is suffering financial woes.
3. Your car. Another large expense for a lot of people is their personal vehicle. There’s the cost of the vehicle itself, which is especially high if you’re paying on a new car loan. Then there are the additional costs of insurance, gas, maintenance and repair. If you are willing to give up your car then you can save yourself a lot of money. That money can do directly towards paying off your debt.
Options available to people who may want to give up their cars in order to pay off their debts include:
o Give up driving entirely. Rely on public transportation, bicycling and walking to get around. This is the best way to save a lot of money and pay down debt quickly.
o Give up all but one car in the household. Share a car with your spouse and children instead of allowing everyone to drive separate vehicles.
o Participate in a car sharing program such as Zipcar to have access to a vehicle as needed while decreasing your costs.
o Limit the use of your vehicle. You’ll at least save money on gas and maintenance. You may also be able to reduce insurance by dropping down to a lower cost plan since you won’t be driving as much and therefore won’t be at such great risk of getting into an accident.
4. Your vacations. It’s sad to think about giving up vacations but it is a good sacrifice to make if you’re already in debt. A few years without travel can allow you to pay off your debt instead of accruing more. This also goes hand-in-hand with giving up your free time because you can use the time that you would vacation to earn extra income instead.
5. All little expenses that aren’t necessities. How many of the items that you purchase at the grocery store are items that you don’t actually need? How many times do you pick up a new clothing item here or there? Do you have any bad habits like smoking that are costing you money? These little expenses all add up. It can feel like a huge sacrifice to give them all up at once but it’s a really great way to start paying off your debt. You can always start adding them back in a little bit at a time as the debt is paid down.