You may be surprised to learn how much money you have available that you are not currently using. You may discover that you could reduce your debt by several months (or possibly a year) simply by finding and using hidden cash, or generating additional income through some creative ideas.
If you have lived in your house long enough, odds are that you have several items that have been sitting in your home for an extended period of time without being used, including old electronics, unused furniture, or something that you used to think was too valuable to sell.
When you list your unused items for sale online through a platform like Facebook Marketplace, you could be surprised how quickly the extra money comes in. And, think about this, if you ever need the item again, you can always buy it back, potentially for the same amount you sold it for.
Many people will carry debt and have investments in a non-retirement account. On the surface, that may seem to be an acceptable practice. What if you borrow money at a high-interest rate, only to invest that money at a lower interest rate?
For this reason, selling your non-retirement investments and using the cash to pay off your debts is a very smart decision. Typically, by reducing your interest expense, you can achieve a more consistent rate of return than if you remain invested.
Many employees keep quiet about their job performance and aren’t proactive in adjusting their salaries. If someone is motivated to be debt-free, then asking their boss for a raise, requesting to put in more hours, showcasing their abilities, etc., would all help.
Even if there are only minor adjustments in pay, they can still have a big impact if every dollar above what you earn each month goes toward paying off your debt quickly.
If trying to earn more from your 9-5 job doesn’t work, then pursuing two streams of income through gig-style work, online side hustles, etc., are easy to pursue these days.
Virtual platforms make it easier to find gig opportunities (driving, delivering food, or working on freelance sites), and give you an opportunity to earn money while working on your own schedule.
Plus, since all of your earnings are being directed toward paying off your debts sooner, you’re not only getting a paycheck from your job, but you may also have your digital wallet or banking application to support your goal!
Look into platforms such as PayPal, Venmo, or Cash App to see if there are small amounts lying around that add up. While it may seem small, adding an additional $50 or $100 every month would produce a considerable difference cumulatively.
The second technique is to look at some of your old financial products to see if there is an opportunity for using that money elsewhere.
Some people have permanent life insurance policies with cash value that increases over time. If you don’t need to use the cash value in the policy, it could be taken out and used to pay off higher-rate debt, as it is likely better than the interest charged on the debt.
This will take some analysis, particularly where life insurance may still be needed, but in specific cases, it can release a significant amount of money.
This has been an issue for many people who purchased these policies several years ago and haven’t checked to see how they have been performing lately. You may find that the policy no longer earns interest at all or earns at a minimal rate.
So, if your return is lower than your interest rate, it may make sense to cash in the policy and put the money to work in a better way.
For many, the quickest way to increase your income, may not be to work more hours at your current employer, but rather, to leave that job for another one altogether.
A different field of work or position can offer an awesome pay increase. People sometimes spend a little money on new skill development, and this can lead to doubling their total income potential.
In addition to reducing debt, a large pay increase from changing jobs often has the ability to completely alter your long-term finances as well.
Another option that is not widely publicised is withdrawing contributions from specific retirement accounts.
In some retirement account types, such as a Roth IRA, you can withdraw the contributions you made without being penalised for early withdrawal, while the earnings you receive from these accounts are not able to be withdrawn before you become 59 1/2 years old.
This is generally not the first way to get out of debt, but it is a way to achieve a breakthrough on debt from other methods when those methods are not effective enough.
Accelerating the speed of paying down debt does not come from any one strategy or method. Rather, it comes from using as many smaller ways to find money and increase your income, in addition to improving your spending habits, as possible.
Some of these smaller tactics are easy, while others require time or sacrifice; but when you put them together, you can seriously decrease the amount of time it will take to become debt free.
Once you start getting some momentum from using these smaller methods, what you once believed would never occur suddenly seems like a very achievable goal.
