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Tag: debt reduction

  • 3 Craziest Debt Reduction Methods Ever

    Ever since the 2008 crash, people have been trying to figure out how to get back on top of the debt reduction game. Lots of folks ended up underwater on their mortgages. Many lost value in their 401K plans. And a sickening number of people are now realizing that the student loans that were supposed to have been well worth it are now reminders of a college IOU that is doing nothing for their careers.

    There may be programs to help deal with the mortgage issue, if you can get in on them. 401K plans will slowly rebuild, and the market has fully recovered. But student loan debt can not be discharged in bankruptcy. Student loans can take your tax refund that you were counting on to get that vehicle repaired.

    So folks are willing to try anything to get their debt paid down. Personal finance guru Dave Ramsey advocates the “debt snowball” debt reduction approach, working from your smallest debt to the largest, paying as much as you can afford to past your basic budget.

    Others say Ramsey has it backward. Pay the highest-interest stuff first. Both debt reduction arguments have merit, depending on your personality type.

    But there are others for whom the slow-and-steady approach is just too damn slow. For those people, we present this short list of some of the craziest lengths that some have gone to in the quest to get Sallie Mae off their backs.

    Sell Your Plasma

    This is pretty common debt reduction trick among college students and unemployed folks. Lots of blood bank outfits will give qualified donors as much as $100 for their first visit, and allow up to two visits per week after that. Some people pull in as much as $65 a week, maxing out their visits. That’s $260 a month to go toward paying down those loans.

    Tips from frequent donors include drinking lots of water, cutting back on sodas, drinking a spoonful of olive oil, and cutting back on fatty foods. These tips are said to speed up plasma donation times. A quick donation takes about 45 minutes. A slow one could be twice that long.

    Sell Your Body Parts

    The idea of selling parts or products of your body puts some people off. For others, it’s worth the run at it to get the debt paid down.

    Women can sell their eggs for as much as $8,000 each. Sperm donations can bring $100 per donation. And some states even allow you to sell your bone marrow for about $3000, which is as much as you would earn selling plasma in a year.

    Dumpster Diving

    Finding one man’s trash to convert into another man’s treasure and sell on Craigslist is one way to go with the dumpster diving, or curbside cruising, trash repurposing. Watching the Free sections on Craigslist can net some real finds. These may include furniture, pool supplies, clothes, and a host of other things. Many of these items need no processing at all before they can be posted right back on to Craigslist for a 100% profit.

    But some people go even further, knowing which restaurants and grocery stores to hit on certain days of the week in order to score produce and food that they feel is perfectly edible. They greatly reduce their grocery bills this way. And since a penny saved is a penny earned, they put the saved grocery money toward their debt reduction.

    The Perennial Plate Episode 84: Dumpster Diver from The Perennial Plate on Vimeo.

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  • Debt Reduction Tips For All Budgets

    Debt Reduction Tips For All Budgets

    Debt reduction can be a very daunting task, especially for younger people who have amassed credit card bills and student loans. Once your debt reaches five figures, it can be very tempting to push the biggest bills to the back of the pile and focus on everyday needs, but ignoring the numbers won’t make them go away (no matter how hard we try).

    Whether it’s a new graduate who is looking for solid employment or a family who has found themselves in a little too deep, there are some strategies out there that will help with organization and prioritization, two biggies when it comes time to dig oneself out. According to Credit.com, there are five steps you should go through before you do anything else:

    1. Evaluate

    Go to the bill holder and gather all your paperwork. Even if your first urge is to burn it, it will help to see exactly where you are with your finances. Make a spreadsheet, or use an old-fashioned calculator and pen and paper to list all of your debts. Track any auto loans, credit card bills, interest rates, and the monthly amounts you’re required to pay.

    2. Budget

    Write down the amount needed for monthly groceries, child care expenses, gas, rent, utilities, etc. Is it more than what you bring in for the month? That’s not good. There are usually ways to cut back, and you might be surprised at where you can find a little extra dough. You may be able to bundle your cable, internet, and phone through your service provider, or carpool to save on gas. Little things add up.

    3. Plan

    Found a way to save a little? Recalculate your expenses against what you’re bringing in, and the number that’s left can be used to hit some of that debt. Try to stay on track every month; it helps if you can gradually add to the amount you’re putting towards the debt. Hit the one with the highest payment/interest amount first.

    4. Negotiate

    No one wants to talk to a debt collector over the phone, but sometimes if you call and ask about payment plans, they’ll help you figure out a way to pay down what you owe so you don’t have to lay out a lump sum. You can also see about moving some of your credit card debt to a card with a lower interest rate; just make sure you don’t add to your debt and keep it off limits for spending.

    5. Follow Through With It!

    It’s difficult to stay on task when it comes to credit card debt, especially when emergencies come up or when an awesome pair of shoes go on sale, but just remind yourself that even if you don’t immediately see the results you want, they will come. Get the biggest debt paid off, then move on to the next one. Trying to tackle them simultaneously can be overwhelming and eat into your budget.

    According to consumer money expert Holly Perez, it’s also a good idea to check out other opportunities for income–such as freelance writing, which can be done from home–and set aside an emergency portion of your savings so that if you have to dip into it, there will still be a substantial amount left in case anything unforseen happens.

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