By Nancy Twigg
Does your family have credit card
bills or other debt that won’t seem to go away no matter how much extra you
pay each month? If so, it’s time to get vicious and tackle those bills like
you really mean it.
Before you start tackling your family’s debt, you need a game plan.
Paying an extra $5 on this bill, $10 on that bill and another $10 on some
other bill each month is not the smartest way to approach debt elimination.
In his book, Financial Peace Revisited (New York: Viking
Penguin, 2003) financial guru Dave Ramsey recommends what he calls the "debt
snowball." First, list all your family’s debts from smallest to biggest
based on the total amount owed on each debt. Then tackle the smallest debt
on your list with all your might using strategies such as the ones listed
below. When the smallest debt is paid off, put all the money you were paying
each month on that bill toward the next smallest debt on your list. Keep
working in this manner until you get all your bills paid off.
Okay, now that you’ve got a game plan for tackling your family’s bills,
let’s talk about some creative strategies for making a dent in those bills.
Some of these might sound a little crazy, but what’s crazy about wanting to
be debt-free? Make a commitment to do whatever it takes to get yourself and
your family free from burden of debt.
- Sell stuff like crazy – That treadmill you never use? Put an
ad in the paper and sell it. All that baby gear and those toys your kids
no longer use? Have a yard sale and get rid of them. Sell that jewelry
or stereo equipment you don’t need on eBay. Turn your extra stuff into
extra cash you can use to pay off debt.
- Get out the piggy bank – Pull out a piggy bank or old Mason
jar. Ask all family members to put all their loose change in it at the
end of each day. At the end of the month, deposit this money in your
checking account and put it toward the smallest debt on your list in
addition to your regular payment.
- Sacrifice – Getting out of debt will benefit the whole
family. Being free of debt means that you can have more money to spend
on fun stuff for everyone in the family. Ask everyone in the family to
give up one special thing for a certain period of time (trips to
McDonald’s, that cappuccino on the way to work, the Friday night movie
rental, etc). Then put the money you would have spent on those items
toward your debt.
- Become obsessed – Become a frugal living maniac. Read
everything you can get your hands on about frugality. Borrow books from
the library, surf the Internet for web sites dedicated to saving money.
If you are diligent, you will surely come across a few new ideas that
will save you some extra money. When you do, put the money that you
saved using those new ideas toward your smallest debt.
- Resort to drastic measures. – Brainstorm with your spouse
for drastic measures you could take to raise money to eliminate debt.
Consider options like: taking on an extra part-time job; renting out
your spare bedroom to a college student; selling your second car;
selling your home and buying something less expensive; etc. Some of
these suggestions may seem too drastic, but if you brainstorm long
enough, you can probably come up with something you are willing and able
to do. Don’t think in terms of working an extra job or being a one-car
family for the rest of your life. Think of it as a short-term sacrifice
that will help you attain the long-term goal of being free from debt.
Nancy Twigg is an author and speaker who loves inspiring others to
live simply. She is also the editor of
Counting the Cost, a free
email newsletter about simple and frugal living. Visit Nancy online at
www.countingthecost.com or at her newest site,