Tuesday, June 30, 2015

6 Ways to Pay Off Debt (And Keep From Getting Into It Ever Again)

Yes, these really work. 

I have been amazed at the interest in my blogpost about keeping out of debt. We've been using some of these techniques so long that I forget others don't always know about them!

    I thought about this again after Financial Samurai' profile of people making more than $250,000 a year -- in some cases, $500,000 annually -- and just not making any progress.

    Oh, poor them.

Here are six ways I can practically guarantee will free up extra money -- and keep you from returning to this dilemma. (Because, like you, I hate to be in debt. Hate it, hate it, hate it.)

*Take care of yourself...but be practical about it. Don't run to the doctor for every little sniffle, especially now that antibiotics have lost much of their effectiveness, due to overuse. (So much for amoxycillin, the "pink stuff," which we trotted out repeatedly for Daughters #1 and #2.) What that means: the doctor is likely to say, "It's a virus...get some rest."
     Which you already knew, for $150 less. 
     Do eat healthy and exercise. Take herbal remedies that help. (There's a ton of advice on this out there on the Internet.) Just don't let it consume you. We're all going to have tired/sick/blue days -- it's just part of being human. And buying hundreds of dollars of vitamins isn't going to change that.

*Buy the highest quality you can. If you're thrift shopping for clothes, look for high-end brands in your size...and accept nothing less. (Or find them on Ebay.)  The only exceptions, in my mind, would be t-shirts and underwear -- because no matter how much you pay, they wear out, eventually. (Restock in late summer, when kids' school needs prompt sales.)
     Same goes for appliances, any kind of tools, vehicles -- whatever. Don't be afraid of 'used.' What that actually means is that someone else has already found out any problems -- and fixed them for you already. But:

*Buy for reliability.  If it's trendy now, that's great -- what about two, three or five years from now? If your lawn mower or refrigerator are still going strong, you've just saved money on purchasing them again. Consumer Reports is a good place to start, but a search on forums will tell you which products have this reputation. Our Subaru Outback, for example. It's run like a champ, needed only minimal maintenance -- and saved us big bucks in gas when I put 7000+ miles on its last summer. Looks great, and pays for itself -- my kind of car.
     Buy it to last.
     When I worked at Quilter's Newsletter, an artist friend there was deeply involved with a small Indian reservation up in the Dakotas. My friend would regularly collect winter coats and cold weather items for her Native American friends -- and the first year, I pretty much stripped our household of the girlies' outgrown coats, etc. A huge pile of winter gear went with my friend...with a warm feeling left behind for us.
     The next year, Friend was back, soliciting for more heavy coats, mittens, etc. "They have nothing," she said. I couldn't stand it. "What about everything we sent with you last year," I asked. "Oh, they have a tradition that you give away everything when the season ends," she said blithely.
      Live this way -- and you'll be paying extra every year. 

*If at all possible, never pay full price. And never, ever pay for nothing. Two words: car lease. What do you get out of it, after your payments are finished? Zippidy doo dah.
     Otherwise, if you 'desperately' need that new TV, laptop or whatever, can you wait... a day? A week? A month? Can you make do with what you've got -- or go without -- until you find a sale on a reliable model that's going to last? Can you stretch your money even further, by buying that sale item on a payment plan that charges 0% interest? (As long as you pay faithfully, that is. Don't commit to it, if you can't do it.)
     The answer is usually yes.

Now take the money you've saved from using these strategies, and pay off the debts. But don't forget to:

*Save. SOMETHING. This is one of the big ones -- if you've got extra set aside for those last-minute emergencies...or astounding bargains...or breakdowns -- you're going to be in much better shape, financially and emotionally. Even a little, saved faithfully, starts to add up. Will that twice-weekly Starbucks make up for being stranded on the highway, panicking because you don't have enough to pay for a new tire?

    I know the interest rates are crappy right now.
    I know that $5 here, $10 there doesn't seem like much, in the grand scheme of things.

   But it adds up. Bank away $5 a week...$20 a month...and you've got $240 in your savings account by the end of the year. That covers a doctor's visit, or a 'new' fridge (secondhand)...or a plumber's visit. And a lot of peace of mind. 
    If you're working a job with an employer match to contributions, take the maximum amount -- it's just like adding interest. You will be able to live without it. The Brick has deductions taken out each month for our medical account and his 401K -- we don't even notice it's not there.

    What you won't enjoy is paying interest and fees when you don't have the money to cover these expenses. And they will happen.
     Keep saving -- replace the money you need to use -- and you'll be amazed at your totals, after a year or two. I promise.


*Give to someone else. I don't understand how it works. But I know that giving to others will help stretch your own money in ways that are absolutely amazing.
     We call it a 'God thing:' that He just 'happens' to inspire someone to put out hunting gear or workboots at a garage sale -- or sell them via Craigslist at a steal, just when we need them. (If you live in a hunting family, gear is a need -- not a want.)
     My own feeling is that at least 10% of your money, time and energy should be given or volunteered away. Yes, the "t-word:" tithing. You have to decide on the amount for yourself. People, groups and our world desperately need our help -- and we have so much.
    Give some of it away. You won't regret it. 

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