Creative ways to reduce high interest debt
Debt is nothing new to most people; it’s something that most of us live with in our own lives. In fact, the Federal Reserve calculated American consumer debt at $14.56 trillion at the end of 2020, which includes mortgages, car payments, student loans, and credit card balances. But while it’s common to the average American, debt is not altogether a good thing, and can have effects on your financial wellness long into the future. For that reason, more and more people are initiating efforts to pay off their outstanding balances, in an attempt to become fully debt-free. If you are in that same boat, here are a few creative ways to reduce high interest debt:
Figure out what your skills are
This is probably the most creative option, so I wanted to put it first here. Figure out what your skills are. Why? Because you can then use your skills to make money. Do you love chickens? Start selling the eggs! Are you great with kids? Babysit! What about sewing? Make it into a business. Do you have a cricuit machine? You can create an Etsy shop. Do you love house hunting? Get licensed as a real estate agent. There are so many ways that you can make money off of your skills – you just first have to know what your skills are, and how you can then utilize them.
Sell your home
Okay, this is another pretty creative way. Usually, when people think about buying and selling, they think about having to spend more on a new house. This might or might not be true and honestly, even if you are spending more, it can still be a way to reduce high interest debt. For example, my friend just purchased a home for 400,000 more than her current home. Even though it is costing her more, she made 189,000 off of her other house sale. A lot of this went towards a 20% down payment, but she took the rest and kept cash, paid off her car, and paid off a credit card that was a high-interest debt. Now that she paid off those two debts, she is only paying $400 extra a month, but she’s also paying less in interest, which is super important, and she has a home that is a better fit for their family going forward. It is a win-win for her! But, you can do this even bigger. Instead of buying a larger home, you could always downsize and buy a cheaper or smaller home, which will help you 1) pay off high interest debt and 2) maybe even pay off your home payment in full (or mostly). Selling your home might sound like a crazy move. However, the housing market is bustling right now and you could make some serious dough! It’s a creative, tried and true way to be able to make your high interest situation look a lot better, if you do it the right way.
Reduce your clutter
Reducing clutter sounds like a weird way to reduce high interest debt, right? Well, what if I told you that you could sell a lot of it? Your valueables, especially! Chapes-JPL is the place to go if you have watches, jewelry, and more. They are Rolex Buyers in Atlanta GA and have been in the business for over 40 years, which is huge. They are the most knowledgable and most trustworthy place in Atlanta, when it comes to selling your valuables. They say, “hapes-JPL has one simple goal, to provide affordable asset loans on jewelry, gold, diamonds, watches, and other valuable assets, at a low rate and at fair value. We offer loans as low as $100 and as high as $5 Million at some of the best interest loan rates in the industry. Unlike typical pawn shops that lend at extremely high rates (and in public storefronts for the world to see), Chapes-JPL provides loans at low rate and in private financial offices.”
Create a plan to tackle your debt
If you are trying to tackle your debt and use creative ways to reduce high interest debt, you also need to make sure that you have a set plan to tackle your debt – creative or not. Create a budget and stick to it (more on this in a minute), figure out what debts you have to pay off, then figure out which ones you should tackle first. Some people like to create the plan to pay off the small debts first, which makes it feel like you are progressing more/faster. Other people like to pay off the largest and hardest to tackle debt first, and then pay off the smaller ones after that, since you can tackle those easier, without the largest payment. Either way, do what works best for you and your family, but it is absolutely essential to create a plan!
Fine-tune your budget
Last but not least, and I know – this isn’t very creative, fine-tune your budget. It’s an absolutely must to have a set budget while trying to pay off debt. Make sure you spend less on luxury items, and put what you would spend towards those luxuries toward your debt, to pay it off sooner. It is hard to do in the moment, but at the end of the day, it is very worth it!