Posts Tagged ‘debt payments’

Top 5 Tips for Clutter Control When Debt is Out-of-Control

Thursday, January 29th, 2009

Upon deciding to make a serious stab at debt reduction, one of the obvious areas for generating some cash for your first targeted debt payment is things lying around the house. “Stuff” in the home is great to liquidate because:

  • Reducing clutter helps to reduce stress and get organized.
  • After being sold, we quickly find other ways of being happy that replace any of the sentiments attached to the item.
  • They can generate more instant cash than anticipated, depending on the item.

But the question remains, how to best go about deciding to sell stuff? The basic approach should be the same as for the larger effort towards debt reduction and elimination: make a list of what you have, prioritize the items according to cash value if sold and their value to you, and decide on the best strategy for selling the items. Most importantly, set the cash aside in an envelope labeled “for debt payments only” and use it for nothing else.

Here’s the top five tips to clutter control for debt management and reduction:


1. When on the fence about getting rid of something because of its sentimental value, lean towards selling it. Being on the fence at the moment of truth already indicates that it is not one of your most important possessions. This is a clear indicator that you will benefit more from the cash, and even more so since you will apply it to aggressive debt reduction payments.

2. Don’t get bogged down in cluttered, messy, and disorganized rooms. The minute you enter the room in which you think there’s lots of stuff that you can sell, you can become instantly discouraged because the items cannot be easily located. Overcome this by grabbing everything that you would be willing to sell and sticking it in its own pile somewhere else. Quickly creating a dedicated “sales” pile means you don’t have to worry about getting the room cleaned up, and thus can keep focus on the task at hand.

3. There’s more that you’re willing to sell than at first glance. Brainstorm. Generating instant cash for debt reduction and elimination is vital, in part because it gets you closer to making a serious dent in your outstanding debt. Because of this, don’t just sell the things that are on the top of your mind, but take time and brainstorm for a complete list. It will be more efficient and thus save you time to liquidate your stuff systematically.

4. Do not buy new stuff to replace sold stuff. A common tendency is to buy things to replace the empty space created by recently-departed clutter. Resist this temptation completely – it will negate your debt reduction efforts. Besides, more empty space can be stylish and the point is to reduce your stress as well as make organizing your existing stuff easier.

5. Repeat your liquidation rounds every few months. In addition to selling off stuff on your initial pass-through and skipping buying new stuff to fill the space, revisit the issue as frequently as possible and continue to sell. As time passes since you first “clutter-controlled”, you will more easily think about things you don’t need as well as fear less the selling off of things that appear in the house yet in reality hold little or no real value for you.

Raj Patel writes for DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs.  DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.

Related Topics

10 Big-Ticket Clutter Items to Sell for Instant Cash

Tackling Clutter To Improve Your Health

Being a Home Office Warrior Makes Clutter Control Essential

Learn More

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Advice, Tips, and Techniques to Eliminate Debt: Steps Two and Onwards

Wednesday, January 14th, 2009
Steps Two – Onwards

After getting organized and creating your basic plan, follow it up with solid execution. These additional tips can help make the progress towards paying off debt go much faster. Choose and implement any of the following:

  • Automate your debt payments, making sure that you keep your total payments at least as high as the amount needed to execute your payment plan.  Automating it makes it less likely that you reduce your payments and fail to reduce your debt.
  • Avoid eating out – it costs a ton
  • Create a budget for all of your non-debt expenses. Trim out everything but the bare minimums and turn that savings into direct payments towards your debt pay down.
  • Use free or low-cost recreational and entertainment options only. They are limitless and everywhere.
  • Build up a cash reserve for emergencies equal to three months of basic expenses: housing, food, and transportation.
  • Create a short-list of arguing points why your interest rates should be lowered. Next use the list as a script and call each of your lenders, haggling with them to have your rates lowered. If you aren’t getting anywhere with the level one representative, ask to speak to a manager, and repeat the same points.
  • Transfer your balance to a new credit card with a zero percent rate, then cut up the new zero percent card and never use it, turning the credit card into a credit tool. Shop around and find a zero percent balance transfer option that has the longest zero percent period available. Note the end date of the zero percent period and make that your deadline to have that account cleared.
  • Stop adding any new funds to investment accounts, retirement or otherwise, and apply those funds instead towards debt pay down.
  • Make a checklist of everything to review during your time paying down debt, then use the list to check your progress on the first of every month. Compare your outstanding debt amount at that point to what it was on the first of the previous month. Adjust your plans to make sure that steady progress is actually a fact.
Raj Patel writes for DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs.  DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.

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Advice, Tips, and Techniques to Eliminate Debt: Step One

Tuesday, January 13th, 2009

The idea of getting ready to reduce and eliminate debt is enough to put most of us on edge. Those nervous about the tasks involved to step out of the red often put to us the question: “What are the best tips and advice for getting out of debt?” In a two-part article, we answer it here.

Step One: Get Organized and Make a Simple Plan                                                                          
Getting organized and coming up with a simple strategy is the first and most important step. In it, you don’t just bring together all of the various bank statements, payment stubs, and notices of changes to debt terms lying around the house; you’re actually writing down concrete and straightforward things that need to get some debt control. Only with a written plan can you effectively measure your progress towards debt elimination. Still confused and not sure where to begin?                                                                                                                                                                                
Here’s the broken-down steps to “Step One”:                                                                                                                                                                     
1. Collect all documentation you can find regarding your debt. Don’t pour over it yet; just pile it all into one place.                                                                                                                                                         
2. Take the pile and organize it in groups, according to type of debt (i.e., auto, credit card, housing/mortgage, etc.)                                                                                                                                               
3. Read through it to get a basic understanding of what is owed and to whom. On a separate notepad, jot down important things such as: the principle, the current debt balances, interest rates, whether the rate is variable or fixed, mandatory timelines for payment, minimum payment amounts to avoid additional fees, and any debt prepayment penalties. Also jot down the phone number(s) of the contact(s) for the account. Don’t worry about finding all of information; do your best and don’t be afraid to call the contact phone numbers for each of your lenders to fill in the blanks.                                                                                                                                                                                                               
4. Snowball Method: Within the mandatory guidelines for repayment you can choose between one of two basic strategies: pay off the smaller balances first, or pay off the balances with the higher interest rates first. Paying off the balances with the highest interest rates makes the most financial sense to pay less interest in the interim, but motivation-wise you might feel increasingly confident as you wipe out credit cards to zero balances. In this second case, the snowball method will be optimal:  it entails paying the minimum monthly payment on each of your debts, except the one with the lowest balance, where you apply all of the remaining funds you can dedicate towards debt reduction.                                                                                                                                                                                                           
5. Check your progress every month. Tell a friend, family member, or loved one about your plan and monthly targets so that they can keep you on track, like a coach. Be explicit and clear as to what is owed. Providing your coach something in writing will add to the sense of commitment.                                                      
Tomorrow we discuss step two: various quick and simple options to speed up the debt pay down process.                                                                                                                                                                                
Raj Patel writes for DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs.  DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.

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Wrap-up: 9 Steps for Successful New Year Debt Resolution

Friday, January 9th, 2009

This is the last post in our series of 9 steps for setting a New Year Resolution to pay off debt.

Again this year, Reducing Debt is the top New Year’s goal, with up to 56% of Americans estimated to set a goal to get out of debt in 2009.  Wow.  That speaks loads about the economy and our mindset.  So remember that you’re not alone this year if you’ve committed to working down debt.

In our series of posts on setting a New Year Resolution to reduce debt, we’ve covered basic steps you can take to get out of debt.  We’ve discussed how you can set goals, come up with a plan, and enlist the support of others in paying off debt.

Ultimately, successful debt reduction depends on a lot more than just coming up with payment schedule.  You have to put all the pieces in place to have success.  Without support of your friends, for instance, you will have a hard time changing your habits.  Without getting everyone in your family aligned behind the goal, moving the needle will feel like herding cats.  And without a good tracking system, you’ll never get the feedback to know if you’re succeeding.

Surrounding yourself with good things, brings good results almost by definition.  Here are our top 9 steps for building out a successful New Year’s Resolution to pay off debt:

  1. Stop using your cards
  2. Get organized
  3. Set family priorities
  4. Get SMART.  Set SMART goals for debt reduction
  5. Make a plan
  6. Simplify for success
  7. Tell your goal to others
  8. Ask for support
  9. Track your progress

In closing, remember that 65% of people who profess to have a goal to reduce debt never put a plan into place.  Just by creating a plan to deal with your debt and starting to track your success, you’ll be significantly more likely to achieve lasting results on your goal.  We are proud to have created DebtGoal.com which incorporates all of these elements.

Hope you have a great 2009 and have success in your goal to reduce debt.

Scott Crawford is CEO of DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs.  DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.

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