Any substantial debt payoff is going to require sacrifice. Sacrifice is giving up something you want now for something you want more. Sacrifices are personal and can’t really be compared across the board. For some people, going without TV (or even just cable) is a huge sacrifice. For others, like me, it’s no big deal. It’s not hard at all. For some people giving up sweets is no big deal (I even have a friend who doesn’t like chocolate). For me, giving up sweets, especially chocolate, is a HUGE deal (which is why I haven’t done it).
When we talk about taking extreme measures to pay off debt, we have to remember that extreme is a relative term. What is extreme for one person might be normal for another and vice versa. The ideas I want to mention are “extreme” as in they are a step beyond what the average person would be willing to do. Then again, who’s to say what’s “average” or “normal?”
So, definitions aside, here are 8 extreme measures people take to pay off debt.
Move
One of the biggest, if not the biggest, expense in people’s budgets is housing. Reducing your housing costs could free up a significant amount of money each month. If you’re renting, you can find a smaller place in a cheaper area. If you own, could you rent the home you already have and move to a smaller rental? For some folks, the numbers might not make any sense, but for others, the numbers are magical–it’s just the idea that seems so hard.
Sell your house
Selling your house isn’t a decision you can take as lightly as moving to a smaller place. If you own a home, you have more wrapped up in it than just your monthly mortgage payment. Selling would have some costs and could be quite a hassle, but the gain might be worth it. Even if you have no equity, you could get out from under a mortgage payment that leaves you no financial flexibility. There are lots of factors to consider. Does it make sense in your situation?
Sell a vehicle
Want to get a big chunk of money to throw at your debt? Consider selling your car or other vehicle, then buying something more economical. Or maybe your vehicle is part of your debt. Jessi was able to get rid of $18K of debt in one day by parting with her fancy Chevrolet Tahoe.
Have a no-spend year
Could you go without eating out, buying new clothes, or paying for entertainment for a year or until your debt is paid off? The feasibility of this depends on how big your debt is, your projected payoff date, and how extreme you want to be. As with our no-spend month, you would be able to set your own rules.
Rent part of your house
So maybe you want to stay put and not downsize. Could you rent out a room through Airbnb? If you’ve look around Airbnb, you know that you can find the whole gamut of accommodations. You have lots of freedom in what to offer and what to charge. If you have some extra space, it’s a real possibility. Some places are beginning to pass laws or local ordinances about Airbnb style rentals, so be sure to check if your area has rules to follow.
Move in with family
I’ve heard some great success stories of people saving money to pay off debt by living with family. 😉 Here is a thorough article about what you need to know before moving in with family to save money. They say measures get even more extreme when you add four kids into the mix.
Get a second job or create your own
While at first glance, the idea of a second job doesn’t seem too extreme, I believe it is beyond what the average person is willing to do. One job alone can be time consuming and draining, so most people don’t look beyond that. If the classic restaurant jobs on nights and weekends doesn’t suit your fancy, how about building your own business? How about an Etsy shop or starting a blog? You could be a freelance writer or a virtual assistant.
Live in a bus
Okay, it doesn’t have to be a bus. It could be anywhere unconventional. I know of some people who have lived in their vehicles for a time to avoid or pay off debt. Usually it’s single people, but Sarah’s family, including the four kiddos, has been living in a bus for nearly two years now. While their purpose is to save money, not pay off current debt (they are waiting for their house to be built), it is nonetheless extreme and impressive.
If “Extreme” isn’t your style…
If you prefer more of a practical, long-lasting approach, than the “extreme” style, try my book, Frugal Fresh Start. It will lead you through a logical, manageable plan to reduce your expenses and start managing your money. Freeing up money in your budget will allow you to put more money toward your debt or other financial goals without requiring extreme measures.
Of course you can still employ any of these extreme measures in conjunction with your Frugal Fresh Start, but the book is geared toward forming lasting frugal habits rather than short stints of extreme measures. It will not only leave you in a better place financially, but it will set you up for continued success as a manager of your financial resources.
Just do something
Whether you choose to take an extreme route or make more standard sacrifices to payoff your debt, the important thing is that you are doing something. The sooner you get out of debt, the sooner you can get your money working for you. You can do this!
How about you?
- What extreme measures have you taken to pay off debt (or reach another financial goal)?
- What other extreme ways have you heard of that you would or wouldn’t consider?
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I love Sarah’s story! And God bless her – she’s a saint in my book because I’m sure I’d pull my hair out living in a bus with just my husband not to mention our wild kiddos. 🙂 And I think your story of moving in with your in-laws is so inspiring because I know I couldn’t do that… I totally lack the will power. You rock! 🙂
I think an overall good suggestion is to watch the spending. Use websites/apps like mint.com or personalcapital to track the spending for each month and see where the money went. MOre often than not, people got deep into debt because they spend money wihtout evening realizing it.
What I did with my credit card debt was utilizing 0% APR balance transfer cards to pay little or no interest.
Another good way to “earn” money is by getting new credit cards with big sign-up bonuses. You could often get hundreds of dollars from a new credit card. Of course before doing that, one has to know what he/she is doing and have a good understanding of credit score and reports.
I’ve taken many of these steps to try to accelerate repayment of my law school loans–no TV, no cable, still use my law school laptop, took a job abroad that offered COLA and free housing for a few years, now rent out my guest rooms and haven’t taken a vacation since graduation. Wanted to take on a second job, but my primary job is usually a 70+ hr/wk gig so that wasn’t possible. With my loan payoff scheduled to take place in the last couple months I’ve been wondering if it was worth it… but very much looking forward to life after student loans.