Stuff steals your joy and suffocates your life. Do you believe this? I do. I’m on a mission to become weird.
Dave Ramsey says, “Don’t be broke. Be Weird”.
He suggests to look at what everyone else is doing and run the other way. The Joneses want stuff: cars, houses, furnishings, clothes, and the bills that pay for the stuff put a noose around their neck that one hiccup in life–an accident, a car repair, a broken appliance–leaves them “stuffocated”.
Nerdwallet says the average household is $135,924 in debt.
Bloomberg says $16,000 of that is credit card debt.
No. More. Stuff.
More than a year ago my family of four took a vacation and all of our needs fit into two backpacks. If we had taken more stuff we have checked bags and missed flight connections. We each had three or four sets of clothes and washed them in the sink and hung them to dry. We were minimalists and it was an experience that left us thirsting for more–I mean less–stuff.
Over the last eight weeks we have sold so much stuff. At the same time we put our house on the market to sell. Last week we closed on the sale. No one would have said our home was cluttered. Judgments say we lived simply. We didn’t pour additional concrete for the driveway or build a shop, or fill the house with furnishings. Simply to others felt “stuffocated” to us. We leased a 997 square foot 2-bedroom apartment for four people. The girls share a bedroom and we have a dog. No amount of downsizing prepared us for the transition. No matter how small our material goods are there was still too much stuff. We still have a few boxes of stuff to take to Goodwill, and we are 100% debt free. We are FREE! Here’s what we’ve learned.
Less stuff means more life.
Remember that backpacking trip? We can have great experiences like those more often. We can move quickly with less stuff, even be more spontaneous. There’s no house, yard, or anything else to maintain. We can go whenever we want, where ever we want to be. That thought alone leads to a lot less stress. Stuff doesn’t hold us back.
If your income comes from online sources the world becomes your playground. House sit for people around the world and your lodging and utilities are covered. Go have experiences stuff will never let you have.
My mom is a pack-rat. She still has my grade school worksheets. I recently convinced her to shut down a storage unit where she was storing stuff because it has cost her more than $5,000, for stuff that fit in her garage. My husband’s mom is a pack-rat. She doesn’t understand why we want less stuff when stuff can be handed down, passed around, or is generally useful. My Dad wants to know when I am coming to pick up my late Grandma’s china. It’s beautiful and I don’t have room for it. Dad chuckles when we talk about our next move. We get the, “Oh you kids…”. We’re in our 40’s, hardly kids, and this feels better all the time.
Shopping is fun, and what if having extra money leads to helping causes you care about. Start a foundation to touch people and needs with care. Do the work only you are meant to do.
I am not saying you don’t need to buy things. Plenty of people need a house. I think people need a place to live that doesn’t own them. For my family a house is a liability, not an asset. We move often. I wouldn’t call us nomads, but history says we move every 4-5 years. If that means selling a house in a downturned financial cycle then we have a lot to lose. Luckily, we sold our house while the market was high. Now we get to plan next steps. If you enjoy living in a house as part of the American Dream, that’s great. Hopefully the house fits your income. Dave Ramsey suggests no more than 40% of your income be tied to a house on a 15-year term, fixed rate mortgage.
You don’t have to furnish it with big box high priced things. Shop second hand if possible. You don’t have to furnish it with big box high priced things. Shop second hand if possible. Find Furniture sales in your area. Visit a garage sale. A little elbow grease and paint can make furniture or decor something you love with a great story. Tell your story.
Open your mind and be free
On Dave Ramsey’s program he allows people a debt free celebratory scream. “FREEDOM”! It’s based on William Wallace from the movie Braveheart:
Don’t you want freedom from stuff, debt, and clutter?
Tell us how you plan to become free in the comments.
Nicole, owner of WeTalkHealthy, lives a healthy decluttered lifestyle. Her main focus is as a health advocate and mom of 2 who studies food, and general wellness. It’s her mission to help you live a healthier life by learning about the dangers in the food you feed your family. Whether it’s meal prep or creative exercise without setting foot in the gym, you don’t want to miss her tips. Connect on Twitter, Pinterest, LinkedIn, or the Facebook group. Save
Financial freedom sounds like a dream, doesn’t it? The thought of never again having to set up autopayments or worry about what bill is due when…Ahhh-mazing.
That said, have you ever thought about the benefits of financial freedom BEYOND just freedom with your finances?
Well today we’ve got Jacob from Dollar Diligence to introduce us to the non-financial benefits of financial freedom —
Being $25,000 in student debt, I knew I was feeling the strain and the anxiety. I hadn’t experienced a good night’s sleep in months and felt drained of energy on most days. I wasn’t completely hopeless, but I felt constrained by the enormity of the problem.
The damage my debt was doing to my finances and credit was clear, because I monitored it almost daily. But, what wasn’t so clear was the damage it was doing to me and those around me. The stress, coupled with my inability to concentrate on much of anything else, led to a deterioration of my health, my relationships and my career.
Getting free of debt not only gave me my financial freedom, it saved my career, and it probably saved my life.
Financially I’m not yet where I want to be, but I now have a clear path to achieving my most important goals. It’s a feeling like no other. While the financial benefits of becoming debt-free are clear, less clear, but much more important, are the non-financial benefits. When you understand how debt impacts every corner of your life, it becomes your most powerful motivation to eliminate it completely.
The Physical Reality of Debt
You feel it first in your emotional makeup. It’s hard to ignore the feelings of stress, anxiety and depression, but you feel as if you can cope with it. What you don’t realize is the physical toll it takes. Studies show that stress is a leading cause of heart disease and researchers have found a positive correlation between debt-induced stress and heart attacks.
When I was at the peak of my distress, my family forced me to get a physical. I found out I was a hypertensive time bomb that needed immediate disarming. I long ignored the migraines, the weight gain and the new age lines – all stress-induced. When I got rid of my debt, I got my health back.
Debt Can Hollow Out Your Life
While your mental and physical health deteriorate under the weight of debt, everything else that is important in your life seems to fade into the background – your family, your relationships, your career and your future.
When you can’t concentrate on anything other than your finances, nothing is prioritized. It doesn’t happen deliberately; it just happens.
You grow distant from the people close to you and there is no urgency in your relationships at home or at work. Some people become resentful of others – their spouse for not understanding or being able to help, their employer for not paying enough and anyone who is enjoying a debt-free life.
Debt threatened my relationships, my career and my future. When I became debt-free, I got my life back.
Finding the True Meaning of Wealth
At the risk of drawing any comparisons between eliminating debt and surviving some real life and death situation, I did gain a similar sense of appreciation of everything around me.
There are so many moments of wealth that occur in our lives that, when we’re lost in a fog of despair, we miss entirely. Wealth is as much about accumulating these moments of love and happiness as it is accumulating vast sums of money.
It’s also about being able to choose how you want to live your life – free to pursue your passion with peace-of-mind and no encumbrances. All of that is lost when you can’t see past a stack of bills. When I became debt-free, I became a very wealthy man.
It may seem hopeless at times, but there are great rewards awaiting you for taking a stand against your debt, the least of which is your financial freedom. When you understand how much is taken from you when debt controls your life, there is no greater feeling than making that last payment.
What would you life look like if you were financially free?
Tell us in the comments below!
This post courtesy of Jacob @DollarDiligence Follow him for daily personal finance tips! Jacob is a high school math teacher who hustled his way out of student loan debt. Frugality is Jacob’s middle name (okay…maybe not…or is it…)
eBay is the most searched platform for buyers looking to buy items be it new, old or vintage. It’s easier to shop on, you get what you want delivered to your door step and you don’t have to dress up, go out to multiple stores to find what you are looking for. You must be wondering why I’m giving you all this information? That’s because, you too can make money with eBay by selling to other consumers if you really try.
(Today’s post is brought to you by Garima Talreja, the hearts and brains behind Curious Babe)
One of the easiest ways to make money on eBay is to sell items you don’t use anymore, your old clothes, that corner table gathering dust or your old shoes. Why let old stuff lay around the house, occupy more space when you can sell them on eBay, make money and buy new things?
On my trip to India a few months back, I saw a television ad which was promoting a “6 month break up” challenge. They were encouraging people to get rid of anything they haven’t used in last 6 months because statistically if you haven’t used them for 6 months, it’s likely that you won’t use them in future as well. So why not declutter your house and wardrobe and make some money?
Let’s talk about selling clothes on eBay —
More than anything, what keeps accumulating in our closet are clothes. Some are impulse purchases, others don’t fit us any more or may be out of season now. The best way to decide what to throw and what to keep is to ask yourself – if you had to shop right now, and saw this item on shelf would you buy it? If the answer is no, the item goes out!
Start small, pick one drawer and find out clothes to discard, once you have them, follow the following steps –
Step 1 – Research on eBay to evaluate the market for your garment. You can do so by checking on completed or sold listings to see what keywords are being used in association to it and how much are sellers selling them for.
Step 2 – Dry clean / wash and iron your garments. You can replace the missing buttons if you have extras lying around in the house, get any stains off it and ensure that it is in the best possible condition. This would help you get the price you’ll demand for.
Step 3 – Take clear and quality pictures of your garments. This is one of the most important steps to make a sale online. Since your customer can’t feel or touch your clothes, your pictures are going to attract them to open your listing and check it out.
When taking pictures, laying them down on a table or a floor with a white background. If you don’t have one, you can use a white sheet or board as base. Then, take pics from all angles – front, back, neck and prints / patches or anything you feel is worth highlighting. Also take pictures of any defects in the item. This way you don’t have anything to hide and the buyer would not return the item or do a case on you for false or misleading information.
Always take pictures in daylight, this will enhance the natural colors of your clothing. If you still feel there’s not enough light and your pictures have come out dark, clean them by using editing software. I always prefer to use Picasa, it’s a free editing software and you can download it online.
*Note – When editing, make sure that the image size is 500 x 500 px or more as required by eBay.
Step 4 – Once you’ve taken the pictures, your next task is to write down the measurements and other details like color, cloth material, size, pockets etc. Include anything and everything you feel is relevant to your clothes and the buyer should know about. Remember, buyers don’t necessarily like surprises therefore, it’s better to provide them with all the information to avoid returns and refunds.
Step 5 – Now that you have the pictures and the details of your garment, it’s time to list your item on eBay.
Make sure your title is clear and contains all the necessary keywords like brand name, size, color etc. E.g. – Blue Cotton On Jeans For Women Size 30 High Waist
Add the item specifics and describe the condition of your garment. You can also add the reason for sale in the condition description, thereby making an emotional connection with your buyer. In the description box, write all the information you jotted down in step 4.
Use the information from research in step 1 to figure out if you want to sell your item at Buy It Now or Auction it. Looking at similar items will also help you decide how much you can / should sell it for. Don’t forget to add eBay (10%) and PayPal fees (2.9% + $0.3) to your final price to avoid paying for it from your pocket.
For shipping with used products, it’s best to keep it domestic. My advice would be to add the cost of shipping to your selling price and offer Free Shipping. Statistics has shown that 46% of customers cancel their orders if there is no free shipping, whereas, 75% of the customers will purchase more when there is free shipping included. Select the standard shipping option and handling time for up to 2 days.
Voila! You’ve made your eBay first listing and ready to make some money!
Answer any queries that come your way from consumers and when the item is sold, secure it in nicely, add a “Thank You” note to your buyer, put it in a box and ship it. Once you do so, add the tracking number in your listing and leave a feedback.
Repeat the steps to sell out old items lying around in the house and make more space for new ones while making more money.
Have you ever sold anything on eBay before? Comment below and let me know!
My name is Garima Talreja and I’m the hearts and brains behind Curious Babe. It’s an online community for emerging women entrepreneurs who want to start their own online business. I got started selling on eBay when I moved to Melbourne in summer of 2014. It’s been a long and interesting journey from selling old items to now dropshipping new products from multiple suppliers online. My mission is to help other women who want to start their own e-commerce business and make money whilst spending time with their family. Find me on Facebook, follow me on Instagram, and let’s connect on Pinterest!
Ultimate Bundles is one that more and more bloggers are becoming familiar with – and for good reason! If you’ve read my post on affiliate marketing, you’re well aware that there are a number of options and routes to take when it comes to making money with affiliate marketing; that said, let me stop you right now and let you in on the one affiliate program you should join TODAY —
Ultimate Bundles Review
Now obviously I do want to throw a disclaimer in there that I am in fact an affiliate for them so should you sign up, I’ll earn commission, but this post was meant to be either way. They’re just that good.
Ultimate Bundles is a company that puts together HUGE bundles of e-books, courses, product discounts, and more – and they put them together in such a way that saves their customers literally THOUSANDS of dollars.
Now I first heard of Ultimate Bundles when the Genius Bloggers’ Toolkit was launched last year. This toolkit was a game changer for me and I absolutely fell in love with Ultimate Bundles. I knew I had to become an affiliate! And by the end of this post, I’m confident you’ll know you need to do the same. Why? Well…
Ultimate Bundles Payout
Affiliates for Ultimate Bundles typically earn 40% of each sale they make, with contributors earning 70%. That means that if you contribute one of your products to a bundle selling for $97, you stand to earn nearly $700 for every 10 people who purchase the bundle through your link! And that’s just ONE bundle! And even if you don’t have anything to contribute, you still stand to earn an average of about $40 per bundle you sell.
This is only an example of potential earnings and should not be taken as typical results.
Ultimate Bundles Discounts
One of the downsides to most affiliate programs is that you can’t earn a commission on your own purchases (lookin’ at you, Amazon…) Well, I’m happy to announce this is NOT the case with Ultimate Bundles. Not only do you get an automatic 40% discount on a bundle because you’re an affiliate, but if you sell 5 of those bundles, they will refund your purchase and you get the bundle FOR FREE. Pretty nifty, eh?
Since learning of Ultimate Bundles, I’ve purchased three bundles: Genius Blogger’s Toolkit, The Ultimate Work at Home Bundle, and A Very Merry Gift Certificate Bundle. And I can promise you that each one of them was worth WELL beyond what I actually paid for them. The Genius Blogger’s Toolkit contained programs and courses I’d been wanting to buy for months – programs and courses worth well over $3,000!! – and I got it all for $97. Then there was the Holiday Bundle – $180 worth of gift certificates for only $15 – which led to my buying all sorts of gifts (for both myself and friends/family) while only having to spend a few extra dollars on shipping. It was AMAZING.
No matter who your target market is, chances are Ultimate Bundles has a bundle for them. And if they haven’t yet, they probably will. They’re even open to suggestions!
Ultimate Bundles doesn’t just toss an affiliate link at you and send you on your merry way, oooh no. Instead they offer up HOURS of free education for all of their affiliates.
Don’t know what sort of blog post to write to promote a bundle? They’ll walk you through it.
Don’t know how to go about e-mail marketing? They’ll walk you through it.
Don’t even know where to start with it all? Yep, that’s right…they’ll walk you through it!
And this information they give to you isn’t just applicable to Ultimate Bundle sales, but to your blog strategies overall! And again – it’s FREE!!
Look at you, readin’ all the way through and still not sold. 😉 Okay, okay so there is a catch…sorta. The bundles are only available at certain times throughout the year – meaning if you don’t take the time to plan out an action plan for these sales, you’ll be left scrambling and won’t make nearly as many sales as you’re capable of during the sale window. That said – see above. Ultimate Bundles is always there to help and they even have a Facebook community available should you have questions or need additional support!
So what are you waiting for?
Sign up for be an Ultimate Bundles Affiliate today! Save
Paying down debt can go such a long way to living a better, healthier life. Less debt means less stress, but it also means less time spent having to find ways to make sure the bills are paid each month.
In January 2016, our household debt totaled over $200,000.
Now you might think that someone with nearly $200,000 of debt must have a serious spending problem. That or a very nice house, a fancy car, perhaps an addiction to the smell of burning money… SOMETHING, right?
All we have to show for our debt is an 8 year old mini-van, a 130 year old fixer-upper of a home, and two college degrees that between us cost $150,000.
Full disclosure, here is our debt breakdown from January 2016:
Lowes Credit Card: $2,800
Furniture Row Credit Card: $1,782
Private student loans: $96,646.09
Federal Student Loans: $46,094.17
Grand total: $208,892.49
Living Paycheck to Paycheck
Our Lowes and Furniture Row bills are (were) the only credit card debt we had. We used both when we purchased our house in August of 2014 so that we could purchase some much needed appliances and furniture. Fortunately they both offered zero percent interest for a set amount of time, but still – $4,600 in credit card debt is a huge chunk of change to carry around.
Meanwhile, my husband and I both have a LOT of student loan debt. Despite both of us working while in college, we fell into the trap of taking out way more than we should have.
Rather than taking the smarter route and going to a community college first, I spent all four years at a private school that cost me about $36,000/year. My partner did go to a community college first, but was still persuaded to take out a lot of student loans to help support himself while in school.
Nearly $150,000 in student loan debt and together our jobs net us $33,000/year (after daycare is factored out…)
So how in the world have we managed to pay down over $10,000 in debt in two months?
Well, our first step was to take a look at our budget and figure out where the majority of our money was going. We were paying $1,600/month towards our debt but the overall total was only decreasing by $1,100. Once we figured out why and how that was happening, we were able to change things up to make a more significant dent in our debt.
How to Pay Down Debt Fast
Disclaimer: This post does contain some affiliate links, which means I may earn a small commission should you click through. This is no way impacts my recommendation of any products or services.
Pay Off Your Debt Based on Interest Rates
Some financial gurus recommend you snowball your money (pay off the smallest debts first, get a “high” from paying off a bill entirely, then roll that payment towards paying off the next smallest debt).
Here’s my problem with that:
Let’s say you owe one credit card $2,000 with 0% interest for three years (such was the case with my Furniture Row card) and another credit card is owed $4,000 with 24.9% interest (the usual rate for most Lowes purchases).
You have $300 to put towards your debt each month. If you put $170 towards the first debt and only $130 towards the second, it will take you a year to pay off that first card.
Meanwhile, in that year, you’ve put $1,560 towards that second card but have only paid it down by about $500 – that’s not even a third!!
So with the snowball method, you’ve put $3,600 towards your debt but at the end of one year, you will still owe over $3,500 (that will now take you another 14 months to pay off and cost you an additional $700 dollars).
Snowball method: Pay $300 for 26 months, $6,000 of debt = $7,800
So what if you reversed it and paid the minimum due on the zero interest and the rest towards the second card?
You’d be looking at $70 towards the first card, $230 towards the second.
In the first year, you would put $2,760 towards your second card, $2,070 of which would be towards the principal.
Paying based on interest rates: Pay $300 for 24 months, $6,000 of debt = $7,200
So not only would you save yourself nearly $600, but you’d also have an additional $300/month two months sooner than you would with the snowball method.
That’s $1,200 you can now throw towards another debt (like your mortgage!)
The Snowball Method
Now I will say that the snowball method has been proven to work for many people and it can be an effective way to motivate yourself to pay down those debts. But depending on your financial situation, you might be paying quite a high price for that motivation.
So for today, the first thing to do to get started towards paying down $10k like I did is to look at your budget and list out every debt you owe, the APR on it, and what you’re currently paying each month. Don’t have a budget? Read this quick and easy post to develop a budget TODAY!
Having a good grasp on your financial situation is the very first step to improving it.
Maximize Your Tax Return
When the new year begins, people are often really struggling with debt. You want to set a resolution to become debt free but you’re coming off of the holiday season with bags of presents that translate into slips of paper covered in financial regret.
It’s easy to see why you might look to tax return time with a glimmer of hope.
The problem, however, is that more often than not, tax returns are seen as a way to buy new stuff; the cheapest time to buy cars, for instance, is right before tax season, as dealers want to get rid of old stock and they know people are about to have pockets full of “discretionary” money.
I know a lot of people who get their tax returns and buy handbags, TVs, go gambling, buy an ostrich, or whatever other things suddenly become a “need” in their eyes. Now I’m not here to judge, I’m just sayin’…
Stop Seeing It As “Free Money”
That money isn’t just given to you by the government! It is money that you earned, one way or another, that the government was holding until your tax variable whosits decided you didn’t owe them anything.
If the government wasn’t taxing that money out of your check, would you just drop 15% of your paycheck each month on carnival games and gumballs?
For the 99.9% of us who aren’t Willy Wonka — of course you wouldn’t! Please stop thinking of it as free money and start realizing it should be allocated towards paying down your debt.
There’s no doubt that there’s a psychological high to getting a big windfall dumped in your lap, but if you truly have a good grasp on your financial situation, you know that “windfall” could translate into so much more.
By allocating my $5,500 tax refund towards my debt, I saved myself nearly $1,300 that I would have otherwise paid out in interest over the next year.
Was it tempting to spend that money on a vacation or some nifty new cleaning supplies? Yes absolutely. I totally believe in treating yourself once in a while, but I also know it’s better to front load your life and pay down debt now versus having it stick to you for decades.
How to Make the Most of Your Tax Return
If you’ve already received your tax refund, I want you to take a genuinely honest look at how you allocated that money. Did you spend it wisely? Or did you spend it in a way that’s going to cost you so much more in the long run? How can you do better next year?
Seriously make note of this and then I want you to hop over to FutureMe – a website in which you can write an e-mail and schedule it to be sent to your future self. Write a quick e-mail and motivate your future self to do better next year. Schedule it to be sent on January 2nd of next year so you don’t forget to do better!
If you haven’t yet received your tax refund, I want you to open up your list on debts and figure out how you can best allocate that money. Is there a bill you can pay off entirely? Or would it be better to divvy it up among a few of them? Figure out a plan and FOLLOW THROUGH with it! Budget your estimated tax return towards your debts, not towards a trip or new frivolous purchase.
Evaluate Your Tax Situation
And for those of you who don’t get returns (or worse – have to pay!) now is a good time to re-evaluate that situation. Chances are good that you have less being taken out in taxes with each paycheck than the rest of us. That’s great provided you’re spending it wisely. But if you don’t yet have a strong hold on your financial situation, then maybe you should talk to your employer about changing up your W-4. While I don’t necessarily advocate asking the government to save your money for you – there are ways to trick yourself into saving otherwise – it’s not a bad thing if you then allocate your return towards debt.
Develop Additional Income Streams
Or rather, that should say: “Develop Additional Income Streams And ONLY Use The Money To Pay Off Debt” but that’s a bit of a mouth…err…eye-full?
Anyway, as it sounds, developing additional income streams is key to getting your debt paid down faster, which I’ve already talked about, but it bears repeating.
I hope by now you’ve developed your own budget and I hope you’ve done so based only on your primary income. Please don’t ever use possible or imaginary money when it comes to planning out your financial future!
With that said, including only your primary income in your budget means that any extra money that comes your way can (and should) go directly towards your debt.
Consider this: for most people, one extra mortgage payment per year will pay their house off seven years sooner. That’s one extra payment for seven years of debt freedom. What are those seven years worth to you?
There are a lot of ways to earn some extra money (that don’t involve the removal of clothing or the selling of body parts). A part time job, though not necessarily glamorous, will generate reliable extra income that you can have direct deposited into an account that automatically makes a payment to a bill each month. It’s a great way to not even be tempted to spend that extra money.
Don’t have the time to work an additional job outside the home? That’s okay, neither did I!
My Favorite Ways to Make Extra Cash
If you can write, Textbroker.com should be your go-to site to generate extra money quickly and easily. You provide a short writing sample, they evaluate it and rate it 1-5 stars, and you earn money based on your star rating. I’m at 4 stars and I earn about 1.4 cents/word. It doesn’t seem like much, but if you enjoy writing and can do so quickly, it adds up fast. I’ve made close to $800 since the beginning of the year. That’s a tremendous amount of money for something I do over my lunch hour a couple days a week.
Do you like to talk instead of write? UserTesting.com has recently become one of my favorite ways to earn extra income. I keep the site open whenever I’m online and if I hear the “ping” telling me a job is available, I jump on it! 15 minutes later and I’m $10 richer!
Upwork.com is another site where you can apply for freelance jobs online. Writing, design, coding, virtual assistant work – all of these and so much more! You can pick up a variety of jobs fairly easily, with little hassle plus you are in charge of the price. The better you are, the higher you can charge, and there’s thousands of offers on the site all the time. I’ve made $150 from them so far this year and the majority of that is actually from companies approaching ME. It’s great!
As I mentioned, I’ve gone over a few of these and then some in another post, but these are a few of my favorites. Just from working from home, I’ve managed to make nearly $3,000 this year.
My latest check from SurveySavvy!
Put Credit to Work For You!
If you knew me in college, you would have never thought I’d be someone you’d want to take financial advice from. When I turned 18 and was able to sign up for credit cards – WATCH OUT!
I remember sitting in my dorm room one night with a friend of mine and we were talking about money; she asked how I could sleep at night, knowing I had SO much credit card debt hanging over my head. I shrugged it off at the time, figuring I’d be in debt forever, have terrible credit, and who cares, right? At least I got that sweet PS2 so we could play DDR! (#collegelife amiright?)
In the years since then, I have paid for that silly gaming system many, many times over. Fortunately I’m happy to say I’m in a good place now with my credit and let me tell you – having good credit makes a world of difference in so many ways, especially when it comes to making credit work FOR you instead of AGAINST you.
Provided you’re like me now and not like 18 year old me, having a credit card can be a great thing. Personally, I have a Discover IT card because I’ll get DOUBLE all the cash back I earn in the first year but I definitely encourage you to shop around and find a card that best suits your needs. If you’re a hardcore Amazon shopper like I am, the Amazon.com Rewards Visa Card might be a better option for you (both offer a $50 sign-up bonus if you sign up via my referral link!)
Once you’ve got a great card that provides cash back, charge every bill that you can and then pay the card off IMMEDIATELY.
Do NOT adjust your budget. NO passing go. DON’T CHARGE ANYTHING YOU CANNOT PAY OFF THAT SAME MONTH!
Provided you use your card wisely, you’ll see a great amount of money back in your pocket.
Most cards are 1-2% back on everything, and then somewhere between 3% and 5% back on random specific things, like gas or groceries. Make sure it’s unlimited to some respect, even if it’s just the 1% back that’s unlimited.
All told, you might end up with as much as 10% or more back on expenses you would have had to pay anyway.
Between cycling balances on my card and cashback from purchases made through Rakuten, I have earned about $400 so far this year, which then went directly to paying down debt.
Insiders Tip with a rebate site like Rakuten : Use it whenever you can! Many stores now offer in-store pick-up. Save yourself time and money by shopping through Rakuten for your purchases as often as possible. This will also help eliminate impulse spending if you go nowhere in the store but the service counter. (Click here to read more on how I’ve earned thousands from Ebates!)
How to get started…
Go through your budget and highlight in yellow everything you can pay for using a cashback rewards card. Calculate what you would earn back in a month if you used a card to pay for said expenses.
Then have an honest conversation with yourself about whether or not you can limit yourself to ONLY using your credit card for things already in your budget. If you can, then I highly encourage you to apply for one (as I mentioned, I like Discover or Amazon, but again – find one that works for YOU!)
If you have any doubt about using your card wisely, please don’t do it. Don’t put yourself in a situation that might lead to more debt instead of less.
And if you’re already using a cashback card, I do hope you’re using what you earn to pay down other debts and not to pay down your card’s balance.
Identify Why You Buy!
Why do we take such great pleasure in buying things? Why does having “more” bring so many such comfort?
Maybe it provides a primal level of mental security, knowing you won’t go without. Or maybe, for some, it’s more of an ego-related feeling – “I’m wonderful and people will know that when they see I have these wonderful things!”
Perhaps it’s because you had nothing growing up and having “more” means staying away from those icky feelings from the past.
Here are some questions to help you pinpoint why you buy:
Do you feel the need to “keep up with the Joneses”?
Does your brand loyalty hurt your budget?
Are you distracting yourself from inner dissatisfaction with new, shiny play things?
Do you think brand name guarantees high quality?
Are you addicted to luxury?
If you cannot identify “why you buy” then you will be unable to say “no” when the desire for more arises. By allowing yourself to constantly want, want, want, you are forcing yourself out of the present and living for what might be, for what you might acquire.
That’s not to say you shouldn’t live for the future. As you know, I’m all about developing long-term plans in order to kick debt to curb. However, you should focus on what will be, not what could be.
As is the case with budgeting your life overall, a long view of your purchases can help with this – a new shirt at full price might be $50 now, but that same $50 taken off of a credit card balance with 22% interest can end up being $60 or more.
Being able to view a purchase in terms of how much it will cost later on versus the immediate need to fulfill a desire will help immensely in avoiding impulse purchases. Like the adage “nothing tastes as good as being skinny feels,” no unnecessary purchase can bring you the peace of mind and reduce your stress like obtaining financial freedom.
Likewise, living in the past isn’t always a bad thing either. Think about where you were a couple years ago and what your household income was. Now think about what your expenses were. Are you spending more because you make more?
If you are in debt, you should not be upping your lifestyle to fit your current salary!
I know so many people who made $40,000/year, got a raise or better job, and instead of putting that additional income towards debt, they have now somehow incurred $10,000 more in expenses (often without realizing it!)
So how do you break these habits and learn to be happy with less?
Well, one of my favorite things to do is to keep a gratitude journal. I recommend against notebooks, simply because the covers are often flimsy, and you want to be able to carry this around with you. Any time you’re feeling down or you’re tempted by an extravagant purchase, pull out your journal and write down five things you’re grateful for.
Doing this will make you happier overall. I guarantee it.
Another thing to help you on your road to satisfaction with less is to consider where less already makes you happy.
For example, less clutter can equal MORE money and that almost certainly helps improve your mood, no? From the humble beginnings of trying to clear out stuff when we moved a couple years ago, to now where I almost constantly have stuff up on Facebook garage sale/resale groups, I’m averaging around $500 per garage sale and nearly $100/month on Facebook. Since November 2015 alone, I’ve made nearly $750 from selling things we no longer need (and this includes kids clothes that I actually got for FREE!)
I recently read a great book called The Brain That Changes Itself and one part that really stuck with me was that the more you practice saying no, the easier it’ll become.
How to get started:
Practice saying NO. Not just to others, but to yourself. Not only will this go a long way in helping your financial state, but it’ll actually re-wire your brain and lead to a healthier, better life overall. How cool is that?
(Re)Define Your Budget!
It’s not enough to make broad goals like “I want to lose weight” or “I will be financially independent”. It’s great to use these as a part of your affirmations but as goals? No.
You must be specific, B-E specific!
You should create and define clear goals that will build towards that momentous success of living a better life on a budget.
Instead of “I will stop using my credit card and pay it off!” Come up with a plan to pay off that card in X number of months. Figure out exactly what’s causing you to use the card now and how you’re going to stop those behaviors.
If physically cutting up the card gives you anxiety, consider freezing it – literally. Put it in a bowl of water and stick it in the freezer. It won’t eliminate your access to it but it’ll certainly give you time to think about whether or not you really need it to make that purchase.
Once you’ve set your goals, take a look at your budget and figure out your plan of action. I recommend starting by immediately cutting your budget by 5%.
Impossible, you say?
When I started this journey in January, I was able to take our $2,500/month income and trim it up by an additional 8%. I too thought it impossible at first until I took the time to develop an action plan.
After evaluating your financial budget, take an honest look at how you’re spending your time. Just as small purchases add up – a $3 cup of coffee doesn’t seem so bad…until you realize a canister of coffee at home would only cost you $10 for at least two weeks of coffee… – so do the “time sucks.”
Sure, maybe you only spend an hour watching TV each night but what if in that hour you could be earning $20? That’s over $7,000/year (nearly $9,000 if that $7k is on an unpaid credit card with 22% APR!)
I’m not suggesting you use every minute of every day to work towards paying down your debt. You must take the time for self-care in more than one way and if that means watching a bit of TV, then go for it! The important part is making sure you’re not wasting hours now that you may not have later.
So there you have it!
In two months, I was able to pay down my debt by over $10,000 by:
Paying based on interest rates
Putting my tax return to use
Developing additional income streams
Making credit work for me instead of against me
Identifying and breaking the habits that lead to wanting more
Redefining the way I budget my life
Our debt, while still quite high, now looks like this:
Lowes Credit Card: $0
Furniture Row Credit Card: $0
Student Loans: 138,116.82
Difference of $10,588.67
I can’t say this has been an easy road, nor will it get any easier any time soon, but there is not a doubt in my mind that this is the best path towards a better, healthier, happier life.
I know this is a long post (and probably a bit overwhelming) but if you take it one step at a time, you too can pay down a significant amount of debt in a short amount of time!