Video Intro
This one is where the rubber meets the road. This is where we see how bad you want to be out of debt.
The sacrifice is only temporary!
The most important thing to remember as you are reading this is that it is ONLY TEMPORARY. By making a sacrifice you are not condemning yourself to that for the rest of your life. You just need to make up for all the overspending that has taken place in the past
If you have done some of the things mentioned in the last few articles, you are on a better financial footing than you were. But, if you expenses are still greater than your income, then we are going to have to take a few more steps.
Sacrifice your stuff and sell it!
Like we mentioned before, your balance sheet is the true indication of whether or not you are progressing financially. But, if your expenses are greater than your income, it is highly unlikely that you are increasing your net worth. So, in order to move forward you either have to cut expenses or increase income.
So far we have mostly been focusing on the less painful ways of cutting expenses in order to increase our net worth. Depending on how deep in debt you are, you may need to take drastic measures to get yourself back on solid ground.
What do you have that you owe money on?
Take out a piece of paper and write them down. Do you have loans on your house, car, boat, living room set, or anything else? The goal is to minimize our expenses, so what better way than getting rid of some of the stuff we owe on? Don’t worry, you will be able to get it again later, but now your goal is to break free from the bondage of debt!
You have to open your mind to things that you might not have wanted to do. This is probably one of them.
Cars are terrible investments!
Like we talked about yesterday, we pay a lot of money for them and they basically only go down in value until they to car heaven. In my opinion cars get people into financial trouble more than anything else. Most people don’t spend tens of thousands of dollars on something that knowingly goes down in value.
The way to defeat this of course is to drive older cars (older cars have already suffered much of the depreciation and therefore lose a whole lot less in value each year).
What is good about this is that if you have a car that you paid $25,000 for and it is now worth $17,000 you can sell it, take the $17,000 and use $6,000 to buy an old car and use the remaining $11,000 to pay down your debt. Just think about this for a second. You can knock out $11,000 of debt just by making one sacrifice: driving an older car.
Now I know not everyone is in that situation, but the principle still applies. So, if you have a boat that you owe thousands on still, or a couple cars, it doesn’t really matter. If you are making payments on it, you should consider getting rid of it.
And come to think of it, if you do own it and it is still worth a decent amount, you can sell that too!
“But if I get an older car, it will be expensive to maintain.”
Not necessarily. Go to Consumer Reports and give them $5.95 for one month of access to their website. They have, hands down, the best and most useful information for buying a used car. The rate just about every car in the book for all kinds of criteria. Not the least of which is reliability.
What you will find is that over the years Honda and Toyota (on average) have consistently made the most reliable cars. If you were looking for the single best old car that is cheap & reliable, I would say it would probably be a Civic. But, do your own homework at Consumer Reports.
Sacrifice your time and get to work! Again.
Yep, if everything up to this point isn’t getting you into the black, then you may need to think about getting a second job. The good news is that second jobs aren’t what they used to be. I remember when I was younger I would put in a hard day’s work at the grocery store and then make my way to the restaurant for the completion of about 12-16 hours on my feet.
Needless to say those days were very tiring, but it doesn’t have to been that way. There are many work-from-home opportunities that you could get involved in as you work to knock out the debt.
Work Overtime
Ask your boss if he/she has anything extra you can work on to pick up some extra hours. This will likely be the best paying additional income you could find.
Sell on Ebay
This is probably the most popular method these days for people looking to supplement their income. The greatest part about it is that you can start with stuff laying around your house. If you have not sold on Ebay before, I highly recommend it as a way to generate some extra income. For more info you can read the earlier article I wrote for beginners called 7 Steps to selling on Ebay.
Freelance Work
Do you have a skill that you could make some money on the side with? If so you can post an ad in Craigslist for free. You can check out elance.com or one of the millions of Freelance job sites out there. Google “Freelance work” to get a small sampling of what is available.
What sacrifices are you making or have you made to get out of debt?
{ 15 comments… read them below or add one }
im glad that ebay allows me to stay at home and take care of my 2 babies!
Wow, great article. I complete agree that sacrifices are needed if you really want financial freedom and out of debt.
THIS IS AN AWESOME ARTICLE. THANK YOU VERY MUCH FOR ALL THE TIPS, LINKS…THANKS FOR YOUR TIME AND RESEARCH.
I’D LIKE TO KNOW MORE ABOUT “WORK FROM HOME JOBS” I HAVE A HARD TIME BELIEVING THEY ARE LEGIT.
GOD BLESS YOU AND MULTIPLY YOUR RESOURCES.
The only problem with the selling the car situation — you bought for 25,000, now worth 17,000, is you’d better hope you only owe 11,000 on it. The banks will usually not release the lien on the title unless the loan is fully paid off. You might have to refi into an unsecured loan or home equity (if it’s available) to pay off any remaining money you owe after the 11,000 is paid – or hope you have the straight up cash to do so. So make sure you look into that before you jump into selling the car. You don’t want to be stuck in a situation where you’ve promised to sell someone the car, and can’t get them the title.
Selling stuff you don’t need can be a great way to pay off debt. Books, electronics, and old sports equipment can add up fast – plus you’re able to clear out space in your house – something a lot of people need to do anyways!
Good article Bob!
Excellent post! Deferred gratification can be difficult, but it’s so worth it in the long run. Great points about cars as well.
can you tell me more about elance.com? do you know anyone who has gotten work from the site or had someone work for them?
Bekah, I have hired some things out with them and haven’t had any issues. I haven’t done any work on elance, but know quite a few people who have – it is a pretty big operation.
we have a leased car….is there anyway to get out of a lease????
bob,the car advice is so true.I learnt the hard way when i splurged on an expensive ride,and when things hit a rough patch i had to swallow my pride and heartrendingly give it up for a more “humble” car.but in the end it made all the difference,as i used a large part of that to clear off some accumulated debt
My wife and I made a lot of sacrifices getting out of debt, including both of us working two jobs, getting rid of cable TV, and not going out much. It was very worth it and was only for a relatively short period of time. It’s not as bad as it sounds either. I really liked my second job (more than my first actually) and didn’t miss cable once it was gone. Since then we got cable back but have gotten rid of it again because we realized how little we actually watch it because we enjoy other things.
The sacrifices we make today, pave the way for a future we’ll enjoy. It is far better to give than receive, making tough sacrifices actually leads to a happier life.
I have been trying to do all the steps so far and it’s just not working for me. Could someone please try to help me? I can’t seem to pay my bills twice a month. I’m always behind. How can I change this? My husband gets paid weekly and I get paid every other week. The budget is not really working for me either. Is there something I’m doing wrong?
your course have motivated me more. bill payment schedule sure help a lot.just seeing on paper what my monthly expenses are put a new prospective on the way I spend . still struggle but not giving up. Blessed love.
going into debt is tantamount to being a liar. (most people lie about that too by saying they are “optimistic”), however, promising to pay for something with money you don’t have is in effect, exactly that.
i will tell you that lies cost you money, time and sacrifice and the sooner one gets honest the easier it is to redeem yourself from the lie that you told in regards to paying for something with money you don’t have.
that should cost you very dearly to teach you never to do it again. Essentially, the debtor needs to receive another income just to service the outstanding debt. the more debt, the more income you need which means trading your sleep, your peace, your entertainment, your enjoyment to payoff the debt ( lie ), that was incurred. Getting a night shift job while working days is a wonderful way to discipline your self into NEVER telling another money lie again. trust me.
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